Legally Blond Meets the Evil Empire

An all too common situation that policyholders face when their insurance carrier sues them in a declaratory judgment action.

Insurers have been filing declaratory judgment actions against policyholders for all of the wrong reasons for years. This legal procedure, once sanctioned by certain courts in certain instances, is now widely being used by insurers as a sword to ward off legitimate claims. Case in point, an insurer recently sued the beloved Hollywood star, Reese Witherspoon. See Maryland Casualty v Reese Witherspoon ComplaintMaryland Casualty Company, v. Reese Witherspoon, Case No. CV13-7847 (C.D. Cal. 2013).

The underlying facts in the Witherspoon Case set the stage for what transpired. A business was alleged to have improperly used Reese Witherspoon’s “name, photograph, image, identity and persona” in advertisements. Believing that she had been wronged, Reese Witherspoon sued the company that she believed was improperly benefiting from the use of her image and identity in their advertisements. That company counterclaimed against her. Reese Witherspoon, in turn, tendered the lawsuit to her insurance carrier, Maryland Casualty. (more…)