LAS VEGAS, April 3, 2008 /PRNewswire/ -- Irell & Manella has won a partial summary judgment on behalf of leading national gaming operator Pinnacle Entertainment, Inc. in an insurance coverage case arising out of Hurricane Katrina; the case is pending before Judge Brian E. Sandoval of the U.S. District Court in Nevada.
The case is one of many high-profile insurance coverage suits stemming from Hurricane Katrina. In August 2005, Pinnacle's facility in Biloxi, Mississippi was extensively damaged by Katrina, sustaining property damage and business interruption loss.
Two of Pinnacle's insurers, Allianz Global Risks US Insurance Company and RSUI Indemnity Company (together providing more than $100 million of excess coverage), took the position that coverage for all storm surge damage falling within their policy layers was precluded by Flood exclusions contained within their policies.
After filing suit in August 2006 Irell & Manella moved for partial summary judgment on this issue in April 2007, with cross-motions subsequently filed by the insurers.
According to Pinnacle's CEO Dan Lee, "Pinnacle has always maintained that it has coverage for flood and other related damage caused by Hurricane Katrina. We specifically bought $400 million of coverage for Weather Catastrophe Occurrences like Katrina, including any resulting flood. We have been extremely disappointed that it has taken a lawsuit to convince our excess insurers of this fact."
After a two-hour oral argument on the motion, Judge Sandoval took the motion and cross-motions under submission. On March 26, he issued his ruling in Pinnacle's favor. A copy of his ruling is available.
According to Irell & Manella partner Marc Maister, who served as Pinnacle's lead counsel, the order granting Pinnacle partial summary judgment (and denying the insurers' cross-motions) was based on the language of the policies at issue and eliminates the insurers' primary coverage defense.
Mr. Maister said, "The judge's opinion is extremely well-reasoned, based on the specific policy language in question and applies long-standing rules of insurance policy interpretation. We are obviously very happy with the order."
The victory on the motion comes on the heels of a settlement with another of Pinnacle's excess insurers, Arch Specialty Insurance Company, who paid Pinnacle $36,750,000 on March 14, 2008, bringing its total insurance recovery thus far to $141,750,000. In addition to the contractual claim under the policies, Pinnacle is pursuing a bad faith claim against Allianz and RSUI.
Note: Irell & Manella LLP is a full service law firm with approximately 220 attorneys in offices in Los Angeles and Newport Beach, CA. Founded in 1941, Irell is nationally recognized for its tax, entertainment, intellectual property, corporate and litigation practices. The firm's clients include Fortune 500 corporations, universities, and leading-edge entrepreneurial companies in aviation, life sciences and medical devices, telecommunications, gaming, finance, technology and consumer electronics, and entertainment. The expertise of Irell & Manella's insurance department in matters involving business and property insurance is widely recognized. Business entities and individuals often retain Irell & Manella to identify and assist them in pursuing coverage under policies of property insurance, commercial general liability insurance, professional liability insurance, fidelity and crime insurance, directors and officers liability insurance, and umbrella and excess liability insurance, among others. Irell & Manella also assists clients in evaluating their insurance needs before losses occur or claims have been asserted. For more, visit http://www.irell.com/.
Contact: Jessica Pantukh, 310-203-7536, jpantukh@irell.com
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