SAN FRANCISCO — A federal judge yesterday told Kink.com’s insurer that it can’t avoid covering litigation costs over performers infected with HIV.
Atain Specialty Insurance Company sued Kink.com CEO Peter Acworth and Armory Studios LLC last year, claiming that he and his studio's property must cover his own legal bills and possible settlements in three suits filed by HIV-infected former performers Cameron Bay, Rod Daily and an unidentified John Doe.
The three plaintiffs all claim they were infected while working for Kink at Armory Studios properties, which are owned by Acworth.
Two of the performers infected — Bay and Daily — said that they were subjected to unprotected sex with members of the public. Doe said he was infected while performing in “Bound in Public.”
Atain attorney GailAnn Stargardter argued during a summary judgment hearing yesterday that the “physical and sexual abuse” exemption in the Armory insurance policy exempts Atain from paying off any court costs and claims.
Stargardtner contended that the Armory was complicit in requiring porn performers to perform without condoms and that her client is not required to defend Acworth or Armory in any lawsuit arising from a sexual act.
U.S. District Judge James Donato disagreed, ruling the insurance policy does not exclude coverage for litigation arising from any sexual act that occurs on the premises.
Donato said that whether the studio took adequate steps to protect actors is irrelevant, because the exclusion only covers sexual acts caused by an omission.
“The presence or absence of HIV safeguards did not cause them to have sex,” said Donato, according to Courthouse News, which covered the hearing at San Francisco federal court yesterday.
Donato said the injury was caused by alleged negligence, not the sexual act.
“How did anything the building owner do cause them to have sex?” Donato asked. “They were paid actors, paid to have sex. There’s no omission you can hang your hat on to deny coverage.”
Kink.com attorney Karen Tynan — one of the key leaders of the campaign to defeat the now-failed, porn-regulating Proposition 60 in California — told XBIZ on Friday that the ruling centered on the fact that Atain tried to use a "sexual abuse exclusion" that was intended for churches and schools.
“It was an attempt to avoid coverage after enjoying the premiums,” Tynan said. “We are pleased that the judge saw through the bad faith of the insurance company.”
The decision, however, will likely be telegraphed to insurers that closely weigh risks when calculating premiums for film productions.
Even though the case involves a specific insurance contract and unique facts, the decision could be precedential, observed industry attorney Larry Walters.
“Insurance policies tend to use the same definitions and exclusions,” Walters told XBIZ. “So one decision interpreting a specific policy could have broad implications for similar cases, and for the insurance industry in general.”
Tynan offered a number of tips for producers of adult content when it comes to insurance coverage, which is necessary for any business.
“The ‘takeaway’ for producers is this — insurance is important,” Tynan said. “Work closely with your broker to understand your general liability policy, have good safety practices on set, and keep documentation — emails, notes, written policies, etc.”
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