Wednesday, November 16, 2022

ViacomCBS' COVID-Related Suit Against Berkley Allowed to Proceed

A federal district court in Los Angeles has refused to dismiss COVID-19-related litigation filed by ViacomCBS Inc. (Paramount Global) against a W.R. Berkley unit in litigation that focused on two disrupted productions.

Goldie's Oldies.

Media and entertainment company ViacomCBS had sought cast coverage and extra expense coverage from Berkley unit Great Divide Insurance Co. in connection with losses it sustained involving Goldie's Oldies, a Nickelodeon International sitcom series filmed outside Manchester, England, and the 2020 Kids' Choice Awards, a live awards ceremony produced in Los Angeles, both of whose productions were shut down because of the pandemic in 2020, according to Thursday’s (Nov. 10) ruling by the U.S. District Court in Los Angeles in ViacomCBS Inc. v. Great Divide Insurance Co.

Great Divide has neither approved nor denied ViacomCBS’ Goldie’s Oldies claim, nor has it paid the 2020 KCA claim, and it has denied that costs incurred prior to its abandonment come within the policy’s extra expense coverage, the ruling said.

In September 2020, the insurer sent ViacomCBS a notice of nonrenewal.

ViacomCBS filed suit against the insurer claiming breach of contract and of the duty of good faith and fair dealing, and seeking declaratory relief with respect to coverage for its COVID-19-related claims on more than 100 productions. Great Divide filed a counterclaim against ViacomCBS regarding its obligations on coverage and the validity of its nonrenewal. 

The ruling said the parties have resolved more than 95 of the approximately 145 television production claims made under the policy, but disagreed on some of the larger claims as to which losses are covered and to what extent.

The court held that Great Divide must indemnify ViacomCBS under its due diligence clause for the costs it incurred in developing and implementing COVID-19 safety protocols for Goldie’s Oldies.

It said there is no dispute that ViacomCBS’ “efforts in developing and implementing COVID-19 safety protocols for the production of Goldie's Oldies were reasonably practicable efforts taken to avoid or diminish loss or circumstances likely to give rise to a loss or claim insured under the policy.”

Also, its “reliance on medical experts and government guidance to develop the protocols, as well as the implemented protocols themselves, were reasonably practical as matter of law for purposes of the Due Diligence clause,” the ruling said.

The court also ruled that ViacomCBS is entitled to a finding that Great Divide was not permitted to nonrenew the policy in 2020, and that its nonrenewal notice was invalid.

It held, however, that ViacomCBS was not entitled to preproduction costs incurred prior to abandoning the 2020 KCA production because it did not come within the policy’s “definition of loss” under the extra expense coverage provision.

Attorneys in the case did not respond to Business Insurance's requests for comment.

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