Michael Ovitz’s insurance company says it’s not obligated to pay a larger share of his nearly $13 million settlement with journalist Anita Busch — in a suit that alleged he hired infamous fixer Anthony Pellicano to intimidate her following a series of critical articles — because her claims against him didn’t arise from an accident.
Ovitz has admitted he hired Pellicano to investigate Busch but denies directing the harassment, and agreed to a settlement in 2018 just days before trial was set to begin. Busch had alleged that Ovitz paid Pellicano to intimidate her in 2002 and 2003, which resulted in her phone being tapped and someone putting a dead fish, a rose and a note that said “stop” on the broken windshield of her car. (Ovitz’s anticipated trial defense included a claim that actor Steven Seagal was actually behind that.)
Pellicano in 2008 was sentenced to 15 years after being convicted of charges including racketeering and wiretapping. He was released in March 2019, and told The Hollywood Reporter he “got convicted of committing crimes I did not commit” and was “disappointed” that he didn’t get to face off with Busch in the civil suit.
After resolving the court battle with Busch, Ovitz launched a new one against his excess insurance company. While AIG and Chubb contributed their policy limits, Ovitz says Fireman’s Fund Insurance Company made a payment “well below its policy limits.”
According a Wednesday motion for summary judgment from Farmer’s, Ovitz agreed to pay Busch less than $13 million, of which AIG and Chubb each paid $1 million and Farmer’s paid $2 million all under a full reservation of rights. The insurer is arguing the court should toss Ovitz’s complaint because the alleged acts in Busch’s complaint aren’t insurable in California and “an excess insurer has no duty to accept even a reasonable settlement offer with respect to non-covered claims.”
Farmer’s maintains its coverage is triggered by an “occurrence” and that’s defined as an “accident.”
“Accordingly, there can only be coverage for Busch’s alleged bodily injury or property damage if that arose from accidental conduct, which did not happen here because all alleged acts were intentional,” states the filing. “Put differently, for Ovitz to face actual liability to Busch under her First Amended Complaint, a jury would have had to find Ovitz guilty of intentional and willful conduct. Such intentional conduct is not insurable as a matter of law.”
Further, the company says it was only obligated to indemnify claims that been covered by AIG and Chubb.
“As excess insurance, the Policy only provides indemnity for a claim that the underlying primary insurer (here, AIG and Chubb) determined is covered under the primary policy. This did not happen here,” states the filing. “AIG and Chubb, like Fireman’s Fund, made claim determinations (and contributed to Ovitz’s settlement) under a full reservation of rights, which does not equate to a favorable coverage determination.”
Fireman’s also says Ovitz waited 10 years before notifying it about Busch’s lawsuit and there’s no evidence it acted in bad faith.
“As to Ovitz, Fireman’s Fund made the correct claims determination,” states the filing, which is embedded below. “And, in good faith, Fireman’s Fund generously contributed $2 million to assist Ovitz with the resolution of Busch’s lawsuit — under a full reservation of rights. Even if this Court finds that Fireman’s Fund was mistaken, its decision was reasonable and based on a legitimate dispute, and therefore cannot expose Fireman’s Fund to bad faith liability.”
A hearing is currently set for Oct. 26.
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