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Ninth Circuit:
Insurer Had No Duty to Defend Woman Sued by Sumner Redstone for Undue Influence
By a MetNews Staff Writer
A woman who was once the fiancé of the late media mogul Sumner Redstone was not entitled to be afforded a defense by her insurance company when he sued her, after their five-year relationship ended in 2015, for extracting money, real property and valuable items such as jewelry from him through psychological manipulation, the Ninth U.S. Circuit Court of Appeals held Friday.
Suing Travelers Commercial Insurance Company for breach of contract was Sydney Holland. She contended Travelers had a duty to defend her in a lawsuit brought by Redstone, who, until he resigned in 2016, was executive chairman of CBS and Viacom.
Redstone—who died last year at the age of 97—had sued Holland and another former companion of his in 2016 for a total of $150 million which, he claimed, he bestowed on them through “undue influence.”
His complaint alleged elder abuse, breach of fiduciary duty, constructive fraud, and intentional infliction of emotional distress. It averred, among other things, that Holland “would have the nurses administer Ativan to sedate him” and that sedation was involuntary.
Holland was served with the complaint on Nov. 1, 2016, and on Dec. 6, 2016, the insurer denied a duty to defend because the alleged “bodily injury” was “non-accidental,” and not covered by her policy.
On May 29, 2018, Redstone dismissed her from his action. She sued Travelers in the Los Angeles Superior Court, alleging it “has improperly failed and refused to defend or pay any of Holland’s outstanding defense costs.”
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—AP Pictured are Sumner Redstone, now deceased, and then-girlfriend Sydney Holland. |
The insurer removed the case to the U.S. District Court for the Central District of California, based on diversity. On March 30, 2020, District Court Judge Stephen V. Wilson granted summary judgment to Travelers on Holland’s breach of contract claim, saying:
“[T]he gravamen of the Redstone Complaint is Plaintiff’s participation in a willful, fraudulent scheme to acquire Redstone’s assets by taking control of his life….Because intentional conduct that causes the type of ‘personal injury’ or ‘bodily injury’ caused by Plaintiff is expressly excluded by the Policies, even if the potential for a covered negligence claim existed based on the factual allegations in Redstone’s Complaint, such a claim would be ‘inseparably intertwined’ with noncovered conduct and therefore did not trigger the duty to defend.”
The Ninth Circuit affirmed in a memorandum opinion signed by Judges William A. Fletcher, Andrew D. Hurwitz, and Paul J. Watford. They wrote:
“An insurer’s duty to defend in California is broad, but not limitless. To be relieved of its duty, the insurer must prove that no potential for coverage exists under the policy….Thus, Travelers had to show that ‘the facts alleged in the underlying suit can by no conceivable theory raise a single issue that could bring it within the policy coverage.’…
“Travelers made that showing here. None of the facts alleged in the Redstone complaint could conceivably trigger coverage under the relevant Travelers homeowners policies. The gravamen of the complaint is that Holland intentionally participated in a willful and fraudulent scheme to acquire Redstone’s considerable assets by taking ‘near total control’ of his life. The facts alleged support claims founded only upon intentional conduct, which is excluded from coverage under the policies. Holland relies on impleaded claims for false imprisonment or negligence, but even those claims could not give rise to the potential for coverage because they would be “inseparably intertwined” with the noncovered intentional conduct alleged in the complaint.”
The case is Holland v. Travelers Commercial Insurance Company, 20-55680.
Copyright 2021, Metropolitan News Company