Late Notice / IL N.D.

Failure of Professional Hockey Team to Give Notice of Player Lawsuit Bars Coverage for Default Judgement

An Illinois federal court, applying Illinois law, concluded that an insurer is not liable to provide coverage for a default judgment to an injured ex-Federal Hockey League player because the insurer was not given notice of the underlying lawsuit.

The underlying plaintiff, Kyler Moje (“Moje”), played minor-league hockey for the Danville Dashers, a team in the now-defunct Federal Hockey League (the “League”).  During a game in 2012, a player from the opposing team allegedly struck Moje in the face with a hockey stick, causing him to lose his vision in one eye.

Moje filed a lawsuit against the League and the manufacturer of the helmet he was wearing.  In February 2014, Moje served the League’s commissioner with the lawsuit.  Instead of contacting the League’s insurer, National Casualty Company (“National Casualty”), the commissioner hired a New York attorney, who did not respond to the lawsuit or file a notice of appearance.  There is evidence that the commissioner “believed the policy would provide coverage for the lawsuit,” but believed it was not worth contacting the insurer about the suit as it was his protocol to only file insurance claims when he considered the claim to involve “substantial losses.”

In June 2014, Moje obtained a default judgment against the League in the amount of $800,000.  After the judgment was upheld by the Seventh Circuit and National Casualty refused to pay, Moje sued the League and its insurers in Illinois federal court, claiming that National Casualty was liable for the $800,000 judgment.

In its ruling, the district court concluded that the commissioner’s failure to give National Casualty reasonable notice of the underlying lawsuit barred coverage and granted summary judgment in National Casualty’s favor.  The court explained that the plain language of the notice clause in the policy favors National Casualty.  The policy required the insured to provide notice to National Casualty “as soon as practicable.”  The court found that “as soon as practicable” means within a reasonable time.  The court further emphasized that the intent of the provision is to ensure the insurer an opportunity to do its own investigation and defend claims against its insured. 

In her ruling, Judge Gottschall states, “We will never know whether Moje would have been successful if his claim against the League had been litigated on its merits or whether the League’s insurance policy would have afforded coverage. We will never know because the League made the decision not to give reasonable notice to its insurer and instead hired a lawyer who never defended the suit and who was not licensed to practice before this court.”  As a result, the commissioner and the League knowingly breached the policy’s notice requirements.”  Thus, the court granted summary judgment in favor National Casualty.  Moje v. Fed. Hockey League, LLC,No. 15-CV-8929 (N.D. Ill. Mar. 28, 2019).