By Brian Kabateck
For more than six weeks this past spring, all eyes seemed fixed on round-the-clock coverage of the disturbing Amber Heard-Johnny Depp defamation trial unfolding in a Virginia courtroom. The case centered on divorce, abuse, and libel, but the verdict had a ripple effect on other—perhaps surprising—issues.
In 2019, Depp filed a $50 million suit against Heard, alleging that she defamed him in a 2018 op-ed for The Washington Post entitled, “I spoke up against sexual violence — and faced our culture’s wrath. That has to change.” In the article, writing as a “public figure representing domestic abuse,” Heard aligned herself with the #MeToo movement. She recounted facing professional and personal fallout from coming forward to talk about her experiences of sexual harassment and assault as a young woman and abuse within her marriage.
Depp, who was married to Heard for 15 months from 2015-16, was not named in the article. However, he contends it was “catastrophic” for his career, costing him tens of millions in canceled contracts, lost film roles, and damaging his reputation—and that Heard’s claims of domestic abuse were false.
Depp’s legal team called Heard’s accusations a “hoax,” prompting her to file a $100 million countersuit for defamation.
Amid the media circus, plus troubling intimate details (physical and sexual violence, drugs and alcohol, emotional abuse) and contradictory accounts of what happened within the Depp-Heard marriage, the public also marveled at the blockbuster sums of money involved in the movie stars’ competing suits. Many were surprised to learn that Heard’s insurance covered her defense.
In early June, the jury returned a $10 million judgment in Depp’s favor. Although both parties were found liable for defamation in their respective suits against each other, Depp ultimately won three claims against Heard, while she won only one against him.
In addition, according to testimony in the trial, Heard had already incurred at least $6 million in attorney fees. In a statement, Heard’s attorney said Heard could not afford to pay the damages Depp won.
But Heard’s legal and financial woes did not stop there. In July, one of her insurers, New York Marine and General Insurance Co., filed suit in the U.S. District Court in California, claiming it does not need to pay $1 million on her general liability policy.
New York Marine contends that the jury’s findings “establish that the willful acts of Heard cause Heard’s liability”—and the policy does not cover willful acts. The Virginia court, it says, asked the jury to determine if Heard’s comments were false, intentionally defamatory, and made with actual malice. The jury’s verdict confirms they were, New York Marine argues, thereby releasing the insurer from obligation.
Although New York Marine initially honored its duty to provide defense, it stopped paying when the law firm withdrew from the case months before the trial began. Now New York Marine wants the California court to rule that the insurer does not need to indemnify Heard for the damages she owes Depp.
Homeowner’s insurance often covers the insured individual’s defense in libel suits. Why? Homeowner’s policies typically provide first-party coverage (when the insured’s property is damaged) and third-party coverage (when a claim is brought against the insured), also known as liability insurance. This coverage has two parts: the duty to defend (arises as soon as a claim is filed against the insured) and the duty to indemnify (triggered by a judgment).
However, most insurance companies also have exclusionary clauses for “intentional or expected” damages, and these terms may be buried deep in the fine print. Unfortunately, some firms abuse the exclusionary provisions to avoid paying out. Various courts and jurisdictions may interpret the policy language differently.
Although the policy is not public information, Travelers Insurance, which also covered Heard under a homeowner’s policy, appears to recognize the broader scope of its duty. Travelers has also pursued New York Marine to pay its share, saying New York Marine “intentionally violated its duty to its mutual insured and to Travelers.”
Policyholders must understand the details of their insurance coverage. But you should also know that every California contract contains an implied covenant of good faith and fair dealing—insurance policies included. If you’re involved in a defamation suit or other liability case, and your insurance company is acting in bad faith, the experienced attorneys at Kabatek LLP can help.