Animal Welfare Groups Mauled by Insurance Coverage Dispute

Settlements usually put an end to legal conflict, but when the victors of litigation cannot collect the settlement another conflict arises. A recent settlement between animal welfare groups and Ringling Bros. and Barnum & Bailey Circus has started a new three-ring circus of litigation.

The Fund for Animals, based in Gaithersburg, Md., and the Humane Society of the U.S. had accused the “greatest show on earth” of abusing elephants. Their case, however, fell apart when lawyers for the circus raised serious doubts about the credibility of a key witness. It was then revealed that the welfare groups’lead counsel had made payments to the witness, which also contributed to the welfare groups’failure in litigation.

After 14 years of litigation, the two animal welfare groups agreed to pay the legal fees of Feld Entertainment, which owns the Ringling Bros. and Barnum & Bailey Circus. The tab owed to Feld for the countless briefs, depositions, and court appearances in the case came to $15.7 million.

Now, however, the welfare groupsare locked in a legal dispute with their insurers, which are denying coverage for the settlement. Insurers National Union Fire Insurance Co. and Travelers say they notified the groups in 2010 that they would not pay the claim. An administrator for National Union stated that, “There is no coverage for this claim, based on the insureds failure to provide notice during the policy period.

As a result, the Humane Society is suing National Union in the United States District Court for the District of Maryland. The Society’s CEO seems unfazed by the denial of coverage, claiming that it is “a standard posture” in the insurance industry. He says he has a commitment from one insurer to pay most of what the Society owes. According to court filings, the Fund for Animals is engaged in mediation talks with the Travelers and Charter Oak insurance companies.

The case is a cautionary tale for anyone contemplating litigation, whether the claim involves endangered species or a commercial dispute. In addition to the risk of losing the case in court or settling on unfavorable terms, there is the risk that an new problem — an insurance coverage dispute — lays waiting in the wings.

Whether you go to trial, settle, or opt for alternate dispute resolution (such as mediation or arbitration), it is essential that you be represented by a seasoned attorney who can negotiate for appropriate compensation and protect your rights. The attorneys at Longman & Van Grack skillfully practice in all areas of civil law suits and commercial litigation. Contact us at (301) 291-5027 for civil litigation representation today.