Nationwide was not obliged to defend former restaurant homeowners – business insurance
A Nationwide Mutual Insurance Co. unit was under no obligation to defend a former restaurant owner in a lawsuit filed by former employees for a work-related practice exclusion in their coverage, a federal appeals court said Wednesday as it upheld a lower court ruling.
Douglas Joseph Guillon, who was the shareholder, director, and CEO of Crush Steakhouse and Bar in Ukiah, Calif. Until the closure, bought Crush business liability insurance from the Nationwide Unit AMCO Insurance Co. in 2015, according to the ruling by the 9th Court of Appeals in San Francisco in the Douglas Joseph Guillon v AMCO Insurance Co.
After learning of a lawsuit against Crush by three former employees, Mr. Guillon reached out to his insurance broker to seek coverage under his policy. AMCO denied the claim and Mr. Guillon hired an attorney at his own expense. The underlying lawsuit culminated in a lawsuit and judgment of more than $ 430,000.
A year later, Mr. Guillon filed a lawsuit against AMCO in the US District Court in San Francisco, accusing it of violating its policies. The court ruled in favor of the insurer and was upheld by a three-person appeal court.
The panel noted a provision in the policy to exclude employment-related practices that excluded coverage for allegations of "coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious persecution".
"The plain language of Crush's AMCO policy does not protect the claims made in the underlying lawsuit as any of the plaintiffs in the underlying lawsuits (subordinate plaintiffs) are excluded from allegations of discrimination, harassment and coercion" through the "simple" language of the exclusion, "says the judgment.
"Plaintiffs' battery claims – the only underlying claims that Guillon is now arguing AMCO may have had to defend under the policy – are excluded, along with the other claims, by the policy's (employment disclaimer) clause," reads the Decision by confirming the judgment of the lower court.
The lawyers on the case did not respond to requests for comment.