National Hockey League v. TIG Insurance Company
| Decision Date | 24 June 2022 |
| Docket Number | Index No. 653421/2020 |
| Citation | 76 Misc.3d 427,172 N.Y.S.3d 342 |
| Parties | NATIONAL HOCKEY LEAGUE, et al., Plaintiffs, v. TIG INSURANCE COMPANY f/k/a Transamerica Insurance Company et al., Defendants. |
| Court | New York Supreme Court |
76 Misc.3d 427
172 N.Y.S.3d 342
NATIONAL HOCKEY LEAGUE, et al., Plaintiffs,
v.
TIG INSURANCE COMPANY f/k/a Transamerica Insurance Company et al., Defendants.
Index No. 653421/2020
Supreme Court, New York County, New York.
Decided on June 24, 2022
Plaintiffs, National Hockey League, NHL Board of Governors, NHL Enterprises, Inc. — Skadden, Arps, Slate, Meagher & Flom LLP (by Peter D. Luneau, Shaud G. Tavakoli ).
Defendants, Chubb Insurance Company of Canada, Federal Insurance Company, Vigilant Insurance Company — White and Williams LLP (by Michael O. Kassak, John Hacker). Defendant, TIG Insurance Company f/k/a Transamerica Insurance Company — KENNEDYS CMK LL (by Heather E. Simpson, Mark F. Hamilton ). Defendant, Aviva Insurance Company of Canada, as successor to Commercial Union Assurance Co., LTD. — Abrams, Gorelick, Friedman & Jacobson LLP (by Glenn Jacobson ). Defendant, Zurich Insurance Company Ltd. — Coughlin Midlige & Garland LLP (by Jourdan Dozier ).
Melissa A. Crane, J.
This action concerns insurance coverage for various underlying personal injury lawsuits and other proceedings that former National Hockey League players brought alleging that they sustained concussion-related injuries during their careers (collectively, Concussion Litigation). The insurer-defendants at issue on this motion provided the NHL plaintiffs with 31 primary commercial general liability policies (Policies) spanning from 1982-2013. Generally, each of those policies provided the
insured with coverage for a limited period of one year. NHL was uninsured for most of the years prior to the issuance of those policies.
In Motion Seq. No. 04, plaintiffs National Hockey League, NHL Board of Governors, and NHL Enterprises, Inc. (collectively, NHL) move for partial summary judgment declaring that: (1) the insurers has a contractual duty to defend the underlying Concussion Litigation; (2) the insurers’ duties to defend require payment of all reasonable defense costs incurred in NHL's defense of the Concussion Litigation; and (3) the insurers cannot allocate or recover any defense costs from NHL. In the alternative, NHL seeks (4) a declaration that allocation of defense costs must exclude NHL from paying, even for the years it was self-insured. NHL directs this motion against defendants Chubb Insurance Company of Canada, Federal Insurance Company, Vigilant Insurance Company, National Union Fire Insurance Company of Pittsburgh, Pa., American Home Assurance Company, and TIG Insurance Company (collectively, defendants) only. NHL does not move against defendants Zurich Ins. Co. Ltd. or Aviva Ins. Co. of Canada.
The Underlying Concussion Litigation Matters
Beginning in November 2013, over 150 named plaintiffs filed multiple concussion-related lawsuits against NHL. In August 2014, the Judicial Panel on Multidistrict Litigation transferred those lawsuits to Federal Court under the caption In re: National Hockey League Players’ Concussion Injury Litigation (MDL). The operative complaint in the MDL was a putative class action on behalf of all retired NHL players. In the MDL, the players alleged that they sustained concussive injuries during their time as players for the NHL.
Specifically, the players alleged, on behalf of all retired NHL players, that they sustained concussive and sub-concussive injuries that occurred and continued to occur throughout their careers in the NHL and afterward. The NHL operated since 1917 and obtained coverage in approximately 1974. Ultimately, the Federal Court denied the players’ motion for class certification in the MDL and the NHL settled the MDL cases, seven related concussion cases in California State court, and certain unfiled claims for approximately $18.5 million.
The Policies
The defendants issued 31 primary comprehensive general liability policies spanning from October 31, 1982 to January 1,
2014. The policies each contain a duty to defend and a duty to indemnify for occurrences of bodily injury within the policy periods.
The Chubb policies generally state:
"We will pay damages the insured becomes legally obligated to pay by reason of liability imposed by law or assumed under any contract or agreement because of:
bodily injury ... caused by an occurrence ... to which this insurance applies.
This insurance applies:
1. to bodily injury ... which occurs during the policy period[.]
We will defend any claim or suit against the insured seeking such damages.
....
We will defend claims or suits against the insured seeking damages to which this insurance applies even if the allegations of the suit are groundless, false or fraudulent.
....
SUIT means a civil proceeding in which damages because of bodily injury ... to which this insurance applies are alleged ..." (Doc 108).
The AIG policies generally state:
"We will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury ... to which this insurance applies. We will have the right and duty to defend any suit seeking those damages even if the allegations of the suit are groundless, false or fraudulent.
....
This insurance applies to bodily injury ... only if
(1) The bodily injury ... is caused by an occurrence that takes place in the coverage territory and (2) The bodily injury ... occurs during the policy period.
....
Suit means a civil proceeding in which damages because of bodily injury ... to which this insurance applies are alleged ..." (Doc 166).
The TIG policy states:
"We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" ... to which this insurance applies.... This insurance applies only to "bodily injury" ... which occurs during the policy period.
The "bodily injury" ... must be caused by an "occurrence." ... We will have the right and duty to defend any "suit" seeking those damages.
....
"Suit" means a civil proceeding in which damages because of "bodily injury" ... to which this insurance applies are alleged ..." (Doc 104).
Defense Costs
In late 2013, NHL provided notice of the Concussion Litigation to the defendants, who agreed, under reservations of rights, to front the defense costs. NHL had already
retained, at that time, independent law firms that NHL selected for itself. Under their reservations of rights, the defendants made payments towards parts of the defense costs for the Concussion Litigation. Those payments amounted to almost $20 million between 2017 and 2020. NHL seeks to recover the unpaid portions of its defense costs in this action.
In Motion Seq. No. 04, NHL argues that the defendants have a duty to pay its reasonable defense costs for the entire Concussion Litigation lawsuits. NHL also seeks a declaration that the defendants may not allocate any defense costs to NHL for NHL's self-insured years.
The defendants respond that summary judgment is not appropriate because NHL did not trigger the defendants’ obligations to reimburse costs. Specifically, they argue that plaintiff was required to tender the defense of the underlying cases to the defendants, but NHL instead elected to retain independent counsel and control its own defense. Defendants assert that discovery is necessary to "further explore whether NHL, from the outset, intended to maintain complete, unilateral control over the defense of the Concussion Litigation" (Doc 186 at 9-10 [Def's Opp]).
Relatedly, defendants argue that there was a conflict of interest between them and NHL, and that the issue of defense costs must be analyzed under equitable principles pursuant to the independent counsel doctrine (id. at 8-9 ["The doctrine thus transforms the insurer's contractual duty to defend (with the concomitant right to control) into an equitable duty to pay for the defense (without a right to control)"]).
Defendants also contend that allocation to NHL is necessary because NHL was uninsured for almost 60 of the more than 95 years at issue in the Concussion Litigation, and that allocation of defense costs should proceed pro rata, on a time-on-risk basis, that includes NHL's uninsured periods.
Discussion
To obtain summary judgment, the movant must make a prima facie showing of entitlement to judgment as a matter of law by submitting sufficient "evidentiary proof in admissible form" to demonstrate the absence of material issues of fact ( Winegrad v. New York Univ. Med. Ctr. , 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ). The court views the evidence in the light most favorable to the non-moving party and draws all reasonable inferences in that party's favor (see Flomenbaum v. New York Univ. , 71 A.D.3d 80, 91, 890 N.Y.S.2d 493 [1st Dept. 2009] ). The burden shifts to the...
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