Definition of “humiliation” means no coverage under insurance policy for company

Charlotte Personal Injury Attorney Matthew R. Arnold of Arnold & Smith, PLLC answers the question “The insurance adjuster is saying I am partially negligent what does that mean?”


The owner of an Ohio dance franchise will have to defend against a lawsuit brought by angry customers on its own after its insurer successfully denied coverage under two insurance policies.

Auto owners insurance Charlotte Injury Lawyer North Carolina Wrongful Death AttorneyPeggy and Rick Lavinsky prepaid Christopher Cloud and his Fred Astaire Dance Studio a whopping $500,000 for ballroom dancing lessons, coaching, dance camps and other services. In December 2010, after Cloud abruptly closed the studio without providing notice to students, the Lavinskys sued, asserting claims under Ohio’s consumer protection laws and alleging fraud and negligent infliction of emotional distress.

In their lawsuit, the Lavinskys named Fred Astaire Dance System in Ohio, G & K Management Services, Inc., G & K’s president Guy Schiavone, and In Time LLC as defendants. G & K owned the Fred Astaire Dance System franchise. Cloud, who ran his own dance studio—In Time—became a Fred Astaire franchisee in 1990.

G & K and Schiavone were the named insureds under an insurance policy issued by Auto-Owners Insurance Company, and they were also “additional insureds” under an Auto-Owners policy issued to In Time.

When Auto-Owners told G & K that it would not defend the company against the Lavinskys’ claims, G & K brought an action against Auto-Owners seeking a declaration that the insurance company had a duty to defend G & K in the Lavinskys’ lawsuit.

The question in the case was whether the language of the policies covering G & K applied to the claims brought by the Lavinskys.

G & K argued that the definition of “personal injury” in the Auto-Owners policies included the term “humiliation,” and that the Lavinskys’ claims for negligent infliction of emotional distress triggered personal injury liability coverage because the claims involved “humiliation.”

An Ohio state court disagreed, ruling last year that Auto-Owners had no duty to defend G & K under the policy. G & K appealed, and a panel of judges on the United States 5th Circuit Court of Appeals recently revisited the term “humiliation” in the context of the Auto-Owners policy.

The 5th-Circuit panel distinguished a previous case that supported G & K’s contention that it was entitled to coverage under the Auto-Owner’s policy, writing that the term “humiliation” as used in a 2013 Ohio case—Granger v. Auto-Owners—referred to harm that was a result of negligent conduct.

The Auto-Owners policy covering G & K, by contrast, used the term “humiliation” as an “offense of humiliation, discrimination or sexual harassment and any related civil rights violations.” The policies in Granger and in the G & K cases used the term “humiliation” in different ways in their definitions of personal injury, according to Jeff Sistrunk, writing for Law360.

Judge William B. Hoffman dissented, writing that he would not have split as many hairs in defining the term “humiliation.” He wrote that the Lavinskys’ claims for negligent infliction of emotional distress fit into the Auto-Owners policies’ definition of personal injury. G & K should therefore have been entitled to coverage and entitled to a defense against the Lavinskys’ lawsuit—provided by Auto-Owners.

If you or someone you know has any questions regarding potential personal injury claims, feel free to contact the experienced personal injury attorneys at Arnold & Smith, PLLC in Charlotte, North Carolina for a free consultation. Call toll free at (955) 370-2828 or click here for additional resources.



About the Author

ARNOLD & SMITH LAW Matthew Arnold is a Managing Member of Arnold & Smith, PLLC, where he focuses on the areas of family law, divorce, child custody, child support, alimony and equitable distribution.

Mr. Arnold was raised in Charlotte, where he graduated from Providence Senior High School. He attended Belmont Abbey College, where he graduated cum laude, before attending law school at the University of North Carolina at Chapel Hill on a full academic scholarship.

In his free time, Mr. Arnold enjoys golfing and spending time with his wife and three children.






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