CapitolSpecialty provides liability insurance to 35 Club with respect todamages from “personal and advertising injury” arising out of theclub's business. (Courtesy photo)

An insurance company that issued a policy to a New Jersey adultentertainment club is asking a judge to decide whether it mustprovide coverage for a lawsuit accusing the club of onlinemisappropriation of women's images.

CapitolSpecialty Insurance filed suit on March 9 seekinga declaration that it need not provide coverage to thedefendant in the underlying case, Marrin v. 35 Club, whichwas filed in September 2017. That case is one of several filed inNew Jersey and elsewhere in recent months claiming that adultestablishments misappropriate images of models and actressesfor their websites, social media pages and other marketingefforts.

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Capitol Specialty, based in Appleton, Wisconsin, said in itscomplaint that it will provide representation for 35 Club in theunderlying case under a reservation of rights, including theright to seek declaratory relief concerning whether and to whatextent Capitol Specialty is required, if at all, to providecoverage under the policy terms.

Policy exclusions

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

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

Defense costs & indemnity payments

Capitol Specialty seeks a declaration of the parties' respectiverights, obligations and duties with respect to defense costs andindemnity payments made or to be made in connection with theunderlying case, including the obligations of 35 Club to payamounts attributable to noncovered claims. Capitol Specialty alsoseeks reasonable attorney fees and costs for the present case andany other relief the court deems proper.

The underlying suit against 35 Club, filed by 11 models andactresses, claims that the club's Facebook, Twitter and Instagrampages use images of the plaintiffs for commercial benefit withoutpermission and falsely suggest the plaintiffs are affiliated withthe club. The suit says the unauthorized use of the plaintiffs'likenesses was knowing and willful.

Other website & social network misappropriation of imagesuits

Other adult establishments in New Jersey have been named insuits accusing them of misappropriation of images in their websitesand social network pages, including Cheerleaders New JerseyGentlemen's Club in Gloucester City, which was sued in August 2017,and Bare Den Adult Cabaret in Newton, which was sued in October2017.

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Elsewhere, according to media accounts, adult establishmentshave been the subject of suits accusing them ofmisappropriating models' images in ads and marketing materials inBaldwin, New York, Houston, Tampa, Florida andin Edmonton, Alberta.

Charles Toutant is a litigation writer for the New JerseyLaw Journal.