TM Sues Insurance Co.

Ticketmaster has filed suit against an insurance company for failing to cover TM’s legal defense in a separate lawsuit over delivery charges and processing fees associated with tickets purchased online.

Ticketmaster’s complaint, filed Dec. 3 in Los Angeles Superior Court, claims insurance carrier Illinois Union breached its duty to defend the ticketing giant throughout an ongoing class-action suit filed in 2003.

According to court documents, Illinois Union issued Ticketmaster a legal insurance policy for Oct. 2003 to Oct. 2004 with a limit liability of $10 million for each claim.

The policy allegedly stated that it would kick in during the period should TM become “legally obligated to pay damages and claims expenses” in relation to a “wrongful act” or “failure to perform professional services.”

The policy also provided that Illinois Union had the “right and duty to defend the insured in the defense of any covered claim brought against the insured even if the claim is groundless, false or fraudulent.”

However, when a group of people (Schlesinger et al) filed suit against Ticketmaster over processing fees and UPS charges in Oct. 2003, TM claims in its suit that it contacted Illinois Union and was promptly refused coverage for its legal fees, with the insurer contending the lawsuit against TM was based on profit TM was not legally entitled, the Los Angeles Times reported.

Fast forward to 2010 and the Schlesinger lawsuit continues to inch its way through the courts. Ticketmaster claims that because Illinois Union has “denied or failed to acknowledge coverage without any proper basis,” and “acted contrary to insurance industry customs, practices and standards,” TM has incurred more than $4 million in defense expenses for the Schlesinger case.
TM’s suit seeks declaratory relief, damages plus interest, attorneys fees and costs.