The Duty To Defend

We have reached the post trial stage of the Depp vs. Heard matter. The judge has confirmed the verdict and its time for the appeal or other post trial motions. Ms. Heard has until July 24th to file her appeal and pay the appeal bond which is the amount of the judgment plus one year interest. It remains to be seen whether an appeal is actually filed.

Mr. Depp has offered to forgo payment of the judgement if she waives her appeal. This is a common offer to put a case to rest when there are potential errors that could lead to a retrial. While I haven’t seen anything so far that leads me to believe that there is a likelihood of the case being overturned that does not meant that an appeal will not be lodged. Ms. Heard has continued to emphatically state that she told the truth and that Mr. Depp is the abuser in the relationship even though the jury found differently. Her lawyers have also said she cannot pay the amount of the judgment.

In the last week, a new suit was filed by Heard’s homeowner’s insurance company which has been paying for her defense. Many homeowner’s policies carry a rider for libel/slander or other conduct that we don’t typically think of as falling under a homeowner’s policy. Early in my legal career I did a lot of work with insurance companies. I was hired to write opinions on whether certain conduct was covered under the policy. I was taught by my boss that my job was to always look for coverage to exist because if the company wrongfully denied coverage for a claim then the insurance company could also be subject to a suit for bad faith in addition to a breach of contract claim.

Under Oklahoma Law, insurers owe 2 different duties to their insureds - the duty to defend and the duty to pay. The duty to defend is much broader than the duty to pay. These duties are independent of one another and that is very important in the Depp v Heard claims. Clearly Ms. Heard had a rider for libel/slander on her homeowners policy that kicked in when Mr. Depp sued her. This triggered the duty to defend her in the suit.

The duty to defend requires that the insurance hires attorneys and defends any suit against their insured. The duty to defend is invaluable as most people do not have the ability to pay for attorney expenses when they are sued. However, in situations like Ms. Heard’s, this is done with a “reservation of rights” letter which states that the insurance company is reserving its right to later challenge its duty to pay and/or its duty to continue defending depending on the development of the facts.

Most insurance companies exclude coverage for “intentional acts.” The allegation that Ms. Heard made her comments against Mr. Depp with malice is an allegation of intentional conduct. When the jury found that the comments were made with malice, that was a trigger for the insurance company to challenge the continuation of its duty.

The insurance company has filed a declaratory judgment action against Ms. Heard. This kind of case asks the court to declare whether or not the company has a duty to pay the judgment and/or to continue to defend Ms. Heard. Insurance policies are contracts and interpreted based on its face of the contract. The argument asserted would be that the contract excludes coverage for intentional acts and the jury found that she acted intentionally. Therefore, the insurance company has no further duty to represent her or pay the claim.

If the insurance company wins, which I anticipate it will, then Ms .Heard will have to come up with another way to pay counsel to appeal and to pay the verdict. This case is far from over and will continue making law for a while to come.