District Court Refuses to Dismiss FLSA Coverage Suit

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Vozzcom, Inc. v. XL Specialty Ins. Co. (S.D. Fla.
Apr. 19, 2010)

 A federal judge refused to
dismiss cable company Vozzcom’s coverage action against XL Specialty for
defense costs arising from an underling Fair Labor Standards Act action, finding
that XL failed to demonstrate that the claims were excluded by the policy.

Vozzcom’s action against XL
Specialty is the third in a series of cases brought by Vozzcom against its
insurers for coverage for claims under the FLSA. In Vozzcom II, the Eleventh Circuit held that the claims filed by
three employees were to be considered a single claim that fell within the
coverage afforded by a claims-made policy issued to Vozzcom by Beazley
Insurance Company, Inc.

Thereafter, Vozzcom tendered its defense to XL for two
new claims filed during XL’s policy period. XL denied coverage on the ground
that the claims were not “first made” during the policy period because they
related to the earlier claims filed during the Beazley policy period, which was
before the XL policy period began.

The court denied XL’s motion to
dismiss, holding that insufficient information existed to conclude that the new
claims related to the earlier claim. To this end, the court noted that the two
new claims may prove ineffective because they are not sufficiently similar to
the defined class in the class action. The court also rejected XL’s argument
that collateral estoppel barred
Vozzcom’s suit, noting that the evidence to establish collateral estoppel was
not apparent from the face of the complaint. Thus, considering the complaint in
a light most favorable to Vozzcom, the court refused to grant XL’s motion to

a copy of the decision, click here

Carrie Appler and Jeff Kingsley



case provided courtesy of Lexis.