In V&J Employment Services v. Liberty Mutual Insurance Company (2019AP2415), the District I Court of Appeals held that a company’s commercial insurance policy, including employee benefits liability coverage, did not provide for defense or indemnification against lawsuits involving wage claims.

Facts

A group of companies under the V&J brand faced several class-action lawsuits in New York alleging that V&J had improperly withheld tips from and failed to fully compensate and reimburse delivery drivers that they employed. V&J had previously purchased various commercial insurance policies with Liberty Mutual Fire Insurance Company, including employee benefits liability (EBL) coverage. V&J sued Liberty Mutual for failure to defend or indemnify the company under the terms of its EBL policy. The circuit court found that the terms of the policy issued to V&J were “unambiguous” in that they did not cover the wage and compensation claims alleged in the New York lawsuits. The court concluded that Liberty Mutual did not have a duty to defend or indemnify V&J in those cases. V&J appealed.

Discussion

The appellate court agreed with the circuit court’s finding that the New York lawsuits involved wage claims, not employee benefits, and that the alleged actions in New York were intentional, not negligent. Therefore, V&J’s insurance policy did not cover such claims. The appellate court upheld the circuit court’s grant of summary judgement dismissing all claims against Liberty Mutual.

This opinion was not recommended for publication in the official reports.