Zurich units not obligated to provide cover in TCPA case

Zurich Insurance Group units are not obligated to defend or indemnify a financial services firm charged with violating the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act based on exclusions in the insurers’ commercial general liability and umbrella policies, says a federal court in Thursday’s ruling.

West Palm Beach, Florida-based Ocwen Financial Corp. was accused by two plaintiffs, whose litigation has been consolidated, of violating these laws in its phone calls seeking repayment of loans, according to Thursday’s ruling by the U.S. District Court in Chicago in Zurich American Insurance Co. Ocwen Financial Corp.

In one of the cases, the plaintiff charges the stress created by the phone calls contributed to her miscarriage.

Zurich American Insurance Co. and American Guarantee and Liability Insurance company, units of Schaumburg, Illinois-based Zurich Insurance, had issued six general liability policies and four umbrella policies to Ocwen between September 2010 and September 2016, according to the ruling.

After they refused to provide coverage, the insurers filed suit seeking a declaratory judgment they had no duty to defend or indemnify Ocwen in the underlying lawsuit.

The court agreed with Zurich that exclusions in its policies precluded coverage. These included an exclusion that applies to “bodily injury, property damage and personal and advertising damage resulting directly or indirectly from the TCPA” and other federal statutes.

The ruling says a count in one of the lawsuits articulates that the plaintiff’s privacy “was invaded by Ocwen’s debt collection efforts, stemming from its utilization of prerecorded and artificial telephone calls, and calls to (the plaintiff’s) personal cell phone.

“We find that the prerecorded and artificial calls fall squarely within the TCPA, and ...the calls to (the plaintiff’s) personal cell phone fall within the Fair Debt Collection Practices Act,” said the decision, in ruling in the insurers’ favor.

In March, the U.S. Court of Appeals for the District of Columbia Circuit issued a ruling Friday that narrows a 2015 Federal Communications Commission regulation that had expanded the TCPA’s scope.