Shook Obtains Summary Judgment for Insurance Companies

A Montana federal court ruled that three Liberty Mutual subsidiaries did not owe coverage to Aspen Way Enterprises, a franchisee of Aaron’s Inc., for two actions arguing that Aspen Way and other franchisees spied on customers through rental computers.

The Liberty Mutual subsidiaries—American Economy Insurance, American States Insurance and General Insurance—filed a declaratory judgment action against Aspen Way seeking a declaration that they were exempt from defending or indemnifying the company in two underlying lawsuits and reimbursement for money spent defending the suits already. The underlying lawsuits involved allegations that Aspen Way installed software on computers sold or rented to customers. The software, PC Rental Agent, allegedly enabled the company to remotely activate the computer cameras and access personal information.

The court granted summary judgment for the Liberty Mutual subsidiaries as well as an additional insurer, finding that the insurers were not bound to provide Aspen Way coverage in the spying lawsuits.

The decision was later affirmed by the U.S. Court of Appeals for the Ninth Circuit.

Am. Econ. Ins. Co. et al. v. Aspen Way Enter. Inc., No. 14-0009 (D. Mont. 2015).