Attorney Andrew T. Bodoh of Thomas H. Roberts & Associates, PC, a Virginia law firm specializing in litigation, has helped a Virginia nonprofit secure its rights under business-owners’ insurance policy, including its right to recover costs for defending an $85 Million lawsuit in Mississippi Federal Court. Mr. Bodoh defended in Federal Court the nonprofit from the claims brought by State Farm which filed suit attempting to escape its obligation to defend its insured in an $85 Million lawsuit.
“Every company should be concerned about lawsuits,” said Mr. Bodoh. “Even if the company is not liable, the costs of defending the suit may be enormous. Business-owners’ insurance helps protect the company by paying both the costs of the defending the suit as well as the all or part of the judgment, within limits. But who decides whether the insurance applies?”
In August 2013, State Farm Casualty Company asked the U.S. District Court for the Eastern District of Virginia to declare that it had no obligations to its insured, Franklin Center for Government and Public Integrity, with respect to an $85 Million lawsuit filed against Franklin Center in Mississippi. Mr. Bodoh defended Franklin Center and sought a declaration that the business-owners’ insurance purchased from State Farm applied.
Franklin Center for Government and Public Integrity, aka Watchdog.org, is a leader in the new wave of nonprofit journalism. It is a Virginia-based company that employs professional investigative journalists in 26 states to report on waste, fraud, and corruption in the public sector. Franklin Center distributes this news for free to the public, allowing local newspapers and citizens to republish the articles at no charge.
Mr. Bodoh explains the background of the case: “In April of 2013, in the midst of a contentious Virginia gubernatorial election, Franklin Center posted two articles about Democrat candidate Terry McAuliffe and his work with GreenTech Automotive, Inc. GreenTech Automotive, Inc. sued Franklin Center for defamation and interference with a contract, claiming damages of $85 Million.”
State Farm attempted to avoid paying the full costs of the litigation’s defense, claiming among other things that the policy excluded coverage for defamation when the insured was in the business of publishing.
Mr. Bodoh argued, however, that the policy was ambiguous. “When you buy a policy written by the insurance company, the insurance company has to make the scope of the coverage clear. Here, it was not clear if a nonprofit entity distributing news for free through the Internet was ‘in the business of publishing.’”
On Friday, April 4, 2014, the Court ruled in favor of Franklin Center as to the costs of the defense. The Court wrote, “[T]he traditional ‘business of publishing’ implies a commercial enterprise engaged in the production and sale of hard copy informational texts. Here, [Franklin Center] clearly does not engage in the traditional commercial publishing business.” The Court went on to say that “the application of this exclusion turns exclusively on the language used, not State Farm’s intentions or underlying objectives.”
Mr. Bodoh called the decision “a victory for nonprofit publishers, and a victory for Internet publishers.” He explains, “Unless the insurance companies do a better job of defining what it means to be in the business of publishing, nonprofit and internet publishers will be protected from the costs of defamation lawsuits, even when insurance companies attempt to exempt from coverage those ‘in the business of publishing.’ It is part of the coverage they purchase in their business-owners’ policy.”
For further information about your rights under an insurance policy, or if you are being sued for defamation, contact an experience litigation attorney.
The materials are prepared for information purposes only. The materials are not legal advice. You should not act upon the information without seeking the advice of an attorney. Nothing herein creates an attorney-client relationship.
Thomas H. Roberts, Esq.
Andrew T. Bodoh, Esq.
Thomas H. Roberts & Associates, P.C.
105 S 1st Street
Richmond, Virginia 23219
(804) 783-2105 fax
CASE RESULTS DEPEND UPON A VARIETY OF FACTORS UNIQUE TO EACH CASE. CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE UNDERTAKEN BY THE LAWYER
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