Appeals Court Upholds Ruling Against Armory Studios in Insurance Case

Appeals Court Upholds Ruling Against Armory Studios in Insurance Case

SAN FRANCISCO — The Ninth Circuit federal appellate court yesterday ruled against Armory Studios LLC and owner Peter Acworth in their lawsuit against their former insurance company, Atain Specialty, affirming a lower court’s opinion that the insurer does not have a duty to provide coverage for litigation costs and settlements over 2015 lawsuits concerning allegations of HIV transmissions at the iconic San Francisco Armory building.

At the time of the alleged transmissions, Armory Studios LLC and Acworth owned the iconic San Francisco location associated with the Kink.com brand.

In an unpublished opinion yesterday, a Ninth Circuit panel upheld a 2019 summary ruling against Armory Studios and Acworth by District Judge James Donato, ruling that “the insurer's exclusion provision precludes coverage of injury resulting from sexual acts,” legal news site Law360 reported.

The Physical-Sexual Abuse Exclusion

Armory Studios and Acworth were targeted in a series of lawsuits in 2015 by performers who claimed to have contracted HIV while shooting scenes for a company called Cybernet Entertainment. Armory Studios and Acworth alleged Cybernet was a tenant who had rented the Armory as a location. The performers alleged “unsafe work conditions” that ”didn't mandate the use of condoms and required actors to engage in sexual acts with visitors touring the premises.”

Judge Donato’s 2019 ruling, upheld yesterday by the appeals court, stated that Atain was not obligated to cover the defense costs incurred by Armory Studios and Acworth during the Cybernet cases, due to their policy’s “physical-sexual abuse” exclusion.

"Here, the exclusion applies because the state court complaints asserted that Armory and Acworth were liable for the plaintiffs' contraction of HIV while plaintiffs were engaging in sexual acts at the direction of Armory and Acworth, among others," the panel wrote.

The panel also cited the “omissions clause,” precluding lawsuits “arising out of any sexual act that resulted from the omission of the insured, which covers the complaint allegations that Armory and Acworth failed to discover dangerous conditions caused by their tenants and failed to ensure their tenants were following required procedures.”

Unclear Role of Kink.com

The underlying lawsuits by the performers had accused Armory “of various forms of negligence and premises liability, alleging the studio failed to inspect performers for open cuts and sores or implement universal measures to prevent contact with blood or other infectious materials,” Law360 reported.

During a video conference hearing in July, the news site continued, “Armory and Acworth argued the insurance policy's exclusion provision doesn't apply to tenants who rented out the commercial space to film porn.”

U.S. Circuit Judge Richard C. Tallman showed some skepticism about the argument that Acworth and Armory Studios were merely landlords and not, in their Kink.com capacity, involved in the content production by Cybernet Entertainment.

"If he in fact were directing these sexual acts and causing injury and ordering actors to not use [condoms],” the judge asked, “why doesn't that directly fall into the exclusions under the policy of sexual acts caused by insurer?"

Yesterday’s decision also affirmed Donato's ruling that the insurance company cannot recover $500,000 it spent settling one case, “because it never made an express offer to Armory that it could assume its own defense.”

The case is Atain Specialty Insurance Co. v. Armory Studios LLC et al., case number 19-15745 and 19-15820, in the U.S. Court of Appeals for the Ninth Circuit.

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Dirty Cinema Launches New Paysite 'MILFuckd'

Dirty Cinema has launched a new paysite, MILFuckd.com, on its network.

Braindance Unveils '6DOF' VR Tech

Interactive virtual reality platform Braindance has debuted its new Six Degrees of Freedom (6DOF) VR technology.

Kiiroo, Pineapple Support Launch 'Empower Hour' Series on FeelHubX YouTube Channel

Kiiroo and Pineapple Support have teamed up to launch the “Empower Hour” series on the FeelHubX YouTube channel.

Kansas Law Firm Deploys Religion, Bunk Science While Recruiting Plaintiffs Under AV Law

Kansas-based personal injury law firm Mann Wyatt Tanksley is promoting debunked scientific theories and leveraging religious affiliation against the industry while it seeks potential plaintiffs for lawsuits against adult companies under the state’s age verification law.

UK Tech Secretary Lists Age Verification Among OSA Priorities

Peter Kyle, the U.K.’s Secretary of State for Science, Innovation and Technology, on Wednesday made public a draft version of his priorities for implementing the Online Safety Act (OSA), including age verification.

AEBN Publishes Popular Seraches by Country for September, October

AEBN has released its list of popular searches from its straight and gay theaters in all 50 states and the District of Columbia.

Avery Jane Featured on 'Adult Time Podcast'

Avery Jane is the latest guest on the “Adult Time Podcast,” hosted by studio CCO Bree Mills.

FSC: Kansas Law Firm Threatens Adult Site Over Age Verification

The Free Speech Coalition (FSC) has been notified that Kansas law firm Mann Wyatt Tanksley has sent a letter threatening an adult website with a lawsuit for breaking the state's age verification law.

10th Circuit Rejects Final FSC Appeal in Utah AV Case

The United States Court of Appeals for the 10th Circuit on Monday rejected a motion by Free Speech Coalition (FSC) requesting that the full court rehear its appeal in Free Speech Coalition v. Anderson, the industry trade association’s challenge to Utah’s age verification law.

Trump Nominates Project 2025 Contributor, Section 230 Foe to Chair FCC

President-elect Donald Trump has nominated, as his pick to head the Federal Communications Commission, Brendan Carr — an author of Project 2025 who has called for gutting Section 230 protections.

Show More