A federal judge has ruled that an insurance company is not liable to cover any losses by a mortgage service accused of violating the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act because the alleged breaches fall with in exclusions written into the insurance policy.
A copy of the ruling in the case of Zurich American Insurance Company et al v. Ocwen Financial Corporation et al can be accessed by clicking here.
A pair of lawsuits which were consolidated into one suit against Ocwen Financial Corp. are the nexus for this ruling. The lawsuits allege Ocwen used an automated telephone dialing system to contact the cell phones of individuals without their consent. Ocwen requested that its insurance carrier, Zurich, provide defense and indemnification, which the company refused. Both parties then moved for summary judgment, which the judge granted in favor of the insurance company.
The general liability policy and the umbrella policy obtained by Ocwen do not provide coverage for the underlying action, ruled Judge Charles Kocoras of the District Court for the Northern District of Illinois, Eastern Division.
“In sum, we conclude that the policies do not provide coverage for the Underlying Action,” wrote Judge Kocoras. “We have liberally construed the policy to give reasonable effect to the provisions. However, after careful evaluation, we find that the Underlying Action fails to potentially trigger a duty to defend under the insurance agreements.”
