LOS ANGELES (CNS) - Michael Ovitz can proceed to trial with his lawsuit alleging an insurance company breached a contract to partially compensate him for a nearly $13 million settlement with a journalist who accused him of hiring disgraced private investigator Anthony Pellicano to harass her, a judge ruled today.
Los Angeles Superior Court Judge Maureen Duffy-Lewis issued her ruling after hearing arguments from lawyers for Ovitz and Fireman's Fund Insurance Co., then taking the case under submission briefly before ruling.
Fireman's Fund did win dismissal of Ovitz's request for punitive damages as well as his claim the company wrongfully withheld policy benefits in bad faith.
Ovitz is a former talent agent who co-founded Creative Artists Agency in 1975 and was its chairman until 1995. Ovitz later served as president of The Walt Disney Co. from October 1995 to January 1997.
Journalist Anita Busch sued Ovitz in May 2004, alleging he hired Pellicano to intimidate her following a series of stories that Ovitz deemed negative. Ovitz acknowledged employing Pellicano to investigate Busch, but denied paying the investigator to menace her in 2002 and 2003, which resulted in her phone being tapped and someone putting a dead fish, a rose and a note that said “stop'' on her shattered car windshield.
Ovitz maintains in his suit filed in March 2018 that his two primary insurers paid their part of his compensation after the July 2018 settlement with Busch, but that Fireman's Fund has refused to pay their $7.75 million share.
But Fireman's Fund attorney Jodi Swick told the judge that intentional conduct was not covered by Ovitz's policy and that punitive damages are not insurable in California.
“Anita Busch never sued Ovitz for anything but intentional conduct, which is not covered,'' Swick said. “Ovitz wanted to avoid paying punitive damages.''
But in his court papers, Ovitz attorney Carl Alan Roth said Busch's suit asserted claims against his client based on the misconduct of Pellicano, who Ovitz allegedly negligently hired.
“The negligence claim against Ovitz was serious and could have resulted in a judgment of more than $30 million,'' Roth stated in his court papers.
“So, after weighing the considerable risks of such a judgment, Mr. Ovitz settled the case,'' Roth wrote. “When doing so, he took solace in his reasonable expectation of coverage from Fireman's under the policy for injuries caused by his unintentional acts.''
But Swick told Duffy-Lewis that Busch's suit never had any claims for negligence or negligent supervision.
In 2002, Ovitz was trying to sell his company, Artists Management Group LLC, Roth wrote in his court papers.
“Unfortunately, those efforts were challenged by a wide range of negative press and rumors regarding AMG,'' according to Roth's court papers.
Aware of Pellicano's reputation at the time as a respected and widely used conduit of information between and among Hollywood power brokers, Ovitz hired him to gather information on a group of relevant players, including reporters Ovitz suspected were being used to put out negative stories about him and his company, according to Roth's court papers.
Ovitz never anticipated or instructed Pellicano to intimidate, threaten or cause bodily harm to Busch or stop her from publishing a story, Roth stated.
“Mr. Ovitz simply wanted information,'' Roth stated in his court papers. “As the world has now come to know, Mr. Pellicano is a criminal. And like the rest of the world, Mr. Ovitz was shocked after learning via press accounts what happened to Ms. Busch.''
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