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A federal district court on Wednesday ruled against an insurer who sought to dismiss breach of contract and bad faith charges made by a media company in connection with the dissemination of the Hulk Hogan sex tapes.
The ruling by a U.S. District Court in Atlanta in Cox Enterprises Inc. v. Hiscox Insurance Co. stems from the 2012 publication by Gawker Media LLC of a one minute, 41 seconds edited sex tape that included former professional wrestler Terry Gene Bollea, whose ring name was Hulk Hogan.
In March 2016, a jury awarded the former wrestler $60 million for emotional distress and $55 million in economic damages in connection with the tape’s publication, forcing Gawker into bankruptcy.
Cox Radio and a current and a former employee of the company were named as defendants in that litigation. According to the complaint, the two men conspired to leak and sell information and excerpts from the footage and had anonymously sent a DVD containing some of the footage to Gawker’s editor.
Atlanta-based Cox filed suit against the unit of Hiscox Ltd. after the insurer refused to indemnify it for defense costs under its multimedia liability policy, which had a $500,000 self-insured retention.
Accepting the complaint’s allegations as true for the purpose of the dismissal attempt, Cox’s claim “arose from its employees’ dissemination of media content … Cox performed media activities during the policy period which resulted in a claim against Cox that arose from covered media. Thus, the Claim was covered under the Policy, and Cox states a claim for breach of contract because Hiscox has denied coverage,” the ruling said, in refusing to dismiss the breach of contract claim.
The court also refused to dismiss Cox’s bad faith claim against Hiscox, saying that construing the complaint’s factual allegations “in the light most favorable to Cox, the Court may draw the reasonable inference that Hiscox’s refusal to pay under the Policy was frivolous and unfounded.”
Cox’s attorney had no comment on the ruling. Hiscox’s attorneys did not respond to a request for comment.