An insurance company that issued a policy to a New Jersey adult entertainment club is asking a judge to decide whether it must provide coverage for a lawsuit accusing the club of online misappropriation of women's images.

Capitol Specialty Insurance filed suit on March 9 seeking a declaration that it need not provide coverage to the defendant in the underlying case, Marrin v. 35 Club, which was filed in September 2017. That case is one of several filed in New Jersey and elsewhere in recent months claiming that adult establishments misappropriate images of models and actresses for their websites, social media pages and other marketing efforts.

Capitol Specialty, based in Appleton, Wisconsin, said in its complaint that it will provide representation for 35 Club in the underlying case under a reservation of rights, including the right to seek declaratory relief concerning whether and to what extent Capitol Specialty is required, if at all, to provide coverage under the policy terms.

Policy exclusions

Capitol Specialty provides liability insurance to 35 Club with respect to damages from “personal and advertising injury” arising out of the club's business, according to the document. The policy, the insurer claims, expressly excludes coverage for personal and advertising injury arising out of an electronic chatroom or bulletin board which the insured owns or over which it exercises control.

The policy also expressly excludes coverage for an injury caused by the insured or at its direction “with the knowledge that the act would violate the rights of another and would inflict personal and advertising injury,” or “any oral or written publication of material if done by or at the direction of the insured with knowledge of its falsity,” according to the suit.

Defense costs & indemnity payments

Capitol Specialty seeks a declaration of the parties' respective rights, obligations and duties with respect to defense costs and indemnity payments made or to be made in connection with the underlying case, including the obligations of 35 Club to pay amounts attributable to noncovered claims. Capitol Specialty also seeks reasonable attorney fees and costs for the present case and any other relief the court deems proper.

The underlying suit against 35 Club, filed by 11 models and actresses, claims that the club's Facebook, Twitter and Instagram pages use images of the plaintiffs for commercial benefit without permission and falsely suggest the plaintiffs are affiliated with the club. The suit says the unauthorized use of the plaintiffs' likenesses was knowing and willful.

Other website & social network misappropriation of image suits

Other adult establishments in New Jersey have been named in suits accusing them of misappropriation of images in their websites and social network pages, including Cheerleaders New Jersey Gentlemen's Club in Gloucester City, which was sued in August 2017, and Bare Den Adult Cabaret in Newton, which was sued in October 2017.

Elsewhere, according to media accounts, adult establishments have been the subject of suits accusing them of misappropriating models' images in ads and marketing materials in Baldwin, New York, Houston, Tampa, Florida and in Edmonton, Alberta.

Charles Toutant is a litigation writer for the New Jersey Law Journal.

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Insurance company balks at covering strip club in image-misappropriation suit

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