SAN FRANCISCO – Two recent rulings from the U.S. District Court for the Northern District of California have dealt blows to efforts by Kink.com to have litigation costs covered by its insurers, meaning the company must now defend itself against claims from three performers who allege they contracted HIV while filming for Kink.

In a ruling issued December 15, U.S. District Judge James Donato granted a motion for summary judgment by Atain Specialty Insurance Company, finding that a physical-sexual abuse exclusion written into the insurance policy is “clear and unambiguous.”

“Because the language of the exclusion and its interpretation in the context of this case is clear and unambiguous, defendants’ arguments about their reasonable expectations and subsequent modifications to the exclusion are irrelevant,” Donato wrote in his order.

Donato also rejected the defendants’ arguments under what is known as the “concurrent cause doctrine,” a principle which holds that if damages or loss occur for which there is more than one cause, one of which is covered under an insurance policy while the other isn’t, the damages can still be covered by the insurer.

“There are not ‘two or more independent causes’ at issue here,” Donato wrote. “The alleged failures by Armory and Acworth are not ‘totally independent’ causes of plaintiffs’ injuries, i.e., their contraction of the HIV virus. Rather, the essential instrumentality and cause of the alleged injury was engagement in sexual acts, for which coverage is excluded.”

Because the judge found there “be no serious dispute that plaintiffs would not have contracted the virus but for their sexual activity during the shoots,” it follows that “it cannot seriously be debated that even the claims and causes of action against Armory and Acworth are ones that ‘arise out of… sexual behavior intended to lead to, or culminating in any sexual act.’”

“As such, the claims fall squarely under the Physical-Sexual Abuse Exclusion,” Donato concluded.

Kink didn’t fare much better in a similar motion decided by U.S. District Judge Yvonne Gonzalez Rogers in November.

Rogers found that State Compensation Insurance Fund (“State Fund”) also has no duty to defend Cybernet (Kink) because “either (i) plaintiffs’ claims are exclusively governed by California’s workers’ compensation system or (ii) the claims which allege Cybernet intentionally caused damages pursuant to the Policy are barred thereunder.”

While the court wasn’t persuaded by the State Fund’s argument the plaintiffs aren’t employees, noting the “San Francisco Superior Court specifically stated that the issue of whether plaintiffs were employees remained unresolved,” Rogers still found reason to grant the State Fund’s motion because Cybernet’s actions triggered a policy exclusion for “injury intentionally caused by employer.”

Referencing the California case Michaelian v. State Fund, Rogers noted that in “holding that the insurer had no duty to defend with regard to plaintiff’s intentional tort claims for assault and battery and intentional infliction of emotional distress,” the appellate court in Michaelian “relied primarily on an exclusion provision in the insurance policy for ‘bodily injury intentionally caused or aggravated’ by the employer.”

“Notably, the policy exclusion for intentional conduct at issue in Michaelian is identical to Policy Exclusion 5 at issue in this case,” Rogers wrote. Thus, on this ground, the Court finds that no potential for coverage exists with regard to injuries intentionally caused by Cybernet in light of the plain language of the Policy.”

The lawsuits underlying the litigation between Kink, its insurers and the State Fund involve three performers who allege they contracted HIV while shooting for Kink between May and August 2013. Cameron Adams, Joshua Rodgers and a John Doe plaintiff all filed lawsuits against Kink between June and July 2015.

The State Fund initially agreed to defend Kink “subject to a reservation of rights.” In September 2015, Kink demurred on the grounds that California’s workers’ compensation exclusive remedy provision barred the plaintiffs’ claims.

The State Court later overruled the demurrers, however, stating neither a Cal OSHA Appeals Board Decision nor the plaintiffs’ workers’ compensation claims had established the plaintiffs were “employees” of Kink. The court also noted that facts alleged in the plaintiffs’ complaints “support exceptions to the [workers’ compensation] exclusivity rule.”

Donato’s ruling concluded by directing Kink and Atain to “meet and confer to make an appropriate filing to determine the monetary amount that should be awarded to Atain for its reimbursement claim.”

Courthouse image © Robert Linder