Kanye West reportedly once said that his greatest pain in life is that he will never get to see himself perform live. Now that he’s going into litigation against an insurance company, he may need to update that ranking.
Earlier this week, Kanye West’s touring company – Very Good Touring, Inc. –filed a lawsuit against various Lloyd’s of London syndicates (for all intents and purposes, an insurance company) over a denied insurance claim arising from West’s cancelled 2016 Saint Pablo Tour. As has become common in the high-stakes entertainment industry, the touring company took out a policy with Lloyd’s to cover any losses they might incur because of a covered non-appearance or cancellation of tour events. With so much money riding on the availability of a few irreplaceable talents, it behooves the touring companies (or movie producers, or any company investing millions of dollars in a venture entirely dependent on the performance of a specific entertainer) to take out insurance policies to manage their risk. Very Good Touring bought one such policy to cover losses they might suffer if any of the tour dates in the first leg of West’s Saint Pablo Tour were cancelled.
After the first leg of the tour went forward with few interruptions (except for two October 2016 events that were rescheduled after West’s wife, realty television star Kim Kardashian, was robbed in Paris), problems quickly arose during the second leg. On November 19, 2016, West was unable to finish a show in Sacramento and, according to the complaint, his “behavior was strained, confused and erratic”, and ticket holders were given full refunds. When West’s medical condition failed to improve, the rest of the tour was quickly cancelled and West was hospitalized at UCLA Neuropsychiatric Hospital Center, where he stayed for 8 days before being released under full time care and supervision (which, according to the complaint, continues today). Very Good Touring tendered a claim to Lloyd’s and sought to recoup just under $10 million in losses as a result of the tour cancellation caused by West’s ailment. Lloyd’s has so far refused to pay the claim.
The lawsuit alleges claims for breach of contract and breach of the implied covenant of good faith and fair dealing (also known in common parlance as ‘bad faith’). The lawsuit was filed in California, and California law will govern the dispute unless one of the parties convinces the court to apply a different jurisdiction’s laws for some reason. Under California law, Very Good Touring will have the initial burden of showing that the claimed loss falls within the insuring agreement – that is, the promise to pay benefits – in the policy sold by Lloyd’s. If they satisfy that burden, Lloyd’s can get out of paying the claim if they can prove one of the exclusions to coverage listed in the policy applies. Factual disputes will be determined by a jury, and the court will interpret any language in the insurance policy that the parties dispute.
The filed complaint does not articulate why Lloyd’s is refusing to pay the claim, so it is difficult to handicap how the case will unfold, but a few potential outcomes are possible. If Very Good Touring is able to show that the claim is covered, the court would award the benefits due under the policy. If they are able to show that not only was the claim covered, but that Lloyd’s acted in bad faith in denying the claim (for example, by showing that Lloyd’s had no good faith reason to believe the claim should not have been covered), Very Good Touring could recover additional damages, such as their attorneys’ fees they incur fighting this case. And if they go even further and show that Lloyd’s acted with ‘malice, oppression or fraud’ (which generally means that the carrier was intentionally trying to harm Very Good Touring or acting in conscious disregard of its obligations), then the touring company could win punitive damages designed to punish the insurance company. But, of course, if Lloyd’s is able to show that the claim is not covered under the policy, Very Good Touring will get nothing. And there’s also a decent chance that West will use the ordeal as inspiration for a song and maybe release even a diss track about the insurance company. Stay tuned.