The Federal Hockey League and not our client, the league’s insurance carrier, is liable for the $800,000 default judgment awarded a former player who sued the FHL and, ultimately, its insurer after an opponent permanently blinded him with a hockey-stick blade in February 2012, a federal judge ruled March 29, 2019.
Northern Illinois U.S. District Judge Joan B. Gottschall’s dismissal of the claim against the insurer, in which the player sought payment of the judgment won in his suit against the league, amounted to a victory for Goldberg Segalla partner Jonathan L. Schwartz and associate Bradley R. Ryba. Defending the insurance carrier in the claim, Jonathan and Bradley–members of the firm’s Global Insurance Services practice group–deposed several witnesses, including the FHL’s commissioner at the time of the altercation, and ultimately filed the motion for summary judgment that persuaded the judge to dismiss the claim. Though the insurer covered the FHL through a commercial general liability policy, it shouldn’t have to pay the $800,000, the defense argued, because the FHL hadn’t given it reasonable notice of the player’s injuries or his lawsuit against the league. The judge agreed, saying that waiting to notify the league’s insurer was unreasonable and prejudicial and violated a provision in the insurance policy requiring notice “as soon as practicable.”
Figuring prominently in the judge’s decision was the former FHL commissioner’s testimony, in which he conceded not immediately notifying the insurer because he didn’t think much of the player’s claim. Instead, he hired an attorney, he testified–one who wasn’t licensed in the proper court and didn’t respond to the suit. And when the commissioner finally did inform the insurer what had happened, it was too late; a default judgment had been entered, nullifying the carrier’s obligation to cover the claim.
The ruling brought to a close a claim that had roiled for almost four years, one rooted in an altercation between two hockey players that occurred during an early 2012 game between the Danville Dashers of Illinois and the now-defunct Akwesasne Warriors. In that game, one player jabbed another under the helmet with the blade of a hockey stick, an illegal move that permanently blinded the other player. Though FHL players ply their skills largely in obscurity, what happened that night thrust the minor-league hockey organization into the public consciousness. The injured player sued and the FHL allowed an $800,000 default judgment to be entered. Then the league finally notified its insurer, and the carrier retained counsel to try to vacate the judgment. Both the district court and appellate court sustained the judgment, however. And the player sued our client, seeking coverage.
Last month’s dismissal of the claim, a ruling reported by Law360, adds to the body of case law recognizing that failure to strictly comply with a notice condition in a policy can preclude coverage, Bradley says, and emphasizes that an insurer can satisfy the prejudice requirement when a default precludes the insurer from defending a lawsuit and a default judgment is later entered.