Chubb owes defense costs over Capital Gazette newspaper shooting

A Chubb Ltd. unit must reimburse the parent company of the Capital Gazette in Annapolis, Maryland, a reasonable amount of the costs of defending against two suits stemming from a 2018 shooting at the newspaper, an Illinois federal judge ruled Tuesday.

U.S. District Judge Matthew F. Kennelly said in Tribune Publishing Co. LLC et al. v. Ace American Insurance Co., that the insurer could not escape its defense obligations due to Tribune’s hiring of its own counsel. 

The insurer had also argued that it was not required to reimburse Tribune and Baltimore Sun Co. LLC because they failed to cooperate with its suggested defense against the June 2021 Maryland state court lawsuits.

The judge said it is undisputed that Ace agreed to defend the companies and that its failure to reimburse any of the defense costs constitutes a breach of contract.

“Although ACE disputes the reasonableness of the plaintiffs’ defense costs, it cites to no authority suggesting that this justifies its withholding of any payment whatsoever,” the judge wrote. 

In June 2018, a gunman shot and killed five workers and injured two others at the Capital Gazette, a subsidiary of Tribune and the Baltimore Sun.

The companies had a workers compensation and employers liability policy from Ace as well as a commercial general liability policy, each of which provided $1 million in coverage, court records say. Tribune and the Baltimore Sun paid $900,000 in workers compensation benefits related to the incident.

The victims of the shooting and their families filed two separate lawsuits in June 2021, alleging various tort claims. The plaintiffs said in their lawsuit that workers comp exclusivity laws were inapplicable to their claims since they were not employees of Tribune or the Baltimore Sun. The suits were later settled for an undisclosed amount, court records say.

Ace initially agreed to defend the companies under both the workers comp and general liability policies but reserved the right to later challenge its defense obligations.

Tribune and the Baltimore Sun sued in December 2022, accusing Ace of breaching the policies.

A Chubb spokesman declined to comment on the ruling.