MGM sues Zurich over Las Vegas shooting defense costsPosted On: Jun. 25, 2019 3:17 PM CST
MGM Resorts International filed suit against Zurich American Insurance Co. in U.S. District Court in Las Vegas last week, charging the insurer has failed to comply with a defense cost payment agreement in connection with the 2017 Mandalay Bay shooting in which 58 people in a country music concert crowd were killed and hundreds others wounded.
On Oct. 1, 2017, gunman Stephen Paddock opened fire on the concert from his 32nd- floor hotel room in Las Vegas-based MGM Resorts’ Mandalay Bay Resort, killing the concert attendees and injuring others at the Route 91 Harvest Country Music Festival before killing himself. The incident was the deadliest mass shooting by a lone gunman in U.S. history.
According to the June 19 complaint in MGM Resorts International et al. v. Zurich American Insurance Co., more than 4,000 claimants are seeking compensation from MGM for their claims arising out of the event.
It said MGM has disputed any liability arising out of the event and is “vigorously defending itself” in all the cases in the underlying litigation.
Zurich sold a primary commercial general liability policy to MGM Resorts for the period of July 1, 2017, to July 1, 2018, that provided a $1 million limit for each occurrence, according to the complaint.
It said under the policy, MGM must pay for the defense of claims up to the limit of a single $500,000 self-insured retention, and Zurich subsequently must pay for all of MGM’s defense costs. Zurich is also obligated to pay for potential judgments and reasonable settlements in the underlying litigation, the complaint said.
The complaint charges Zurich “has not fulfilled all its obligations under the Zurich Policy and has failed to perform as it agreed to with MGM following the Event.”
“More specifically, Zurich has failed to pay for all reasonable Defense Costs, including substantial amounts due to retained attorneys, expert witnesses, consultants and other vendors that Zurich specifically approved.”
The complaint charges that Zurich’s bad faith failure to pay defense costs has “directly jeopardized” MGM’s defense.
It charges Zurich with breach of its duty to defend and seeks a declaratory judgment the insurer is “obligated to defend MGM completely until Zurich makes actual payment of its full limit of liability.”
It also charges Zurich with tortious breach of the implied covenant of good faith and fair dealing in violation of Nevada’s Unfair Claims Settlement Practices Act. It seeks damages, costs and attorneys fees, including punitive damages.
A Zurich spokesman and MGM’s attorney could not immediately be reached for comment.