Ruling for Tokio Marine affirmed in EPL case

Filing a discrimination charge with the U.S. Equal Employment Opportunity Commission qualifies as a claim for coverage purposes, says a federal appeals court, in ruling in a Tokio Marine Holdings Inc. unit’s favor in a dispute with a restaurant chain.

Marietta, Georgia-based PMTD Restaurants Ltd. had an employment practices liability insurance policy issued by Tokio Marine unit Houston Casualty Co. with a policy period between December 2016 and December 2017, according to Wednesday’s ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in PMTD Restaurants LLC v. Houston Casualty Co.

In July 2016, a PMTD employee filed a charge with the EEOC alleging unlawful racial discrimination. The EEOC’s investigation concluded it was unable to determine whether the conduct complaint was unlawful discrimination.

In December 2016, the employee filed a retaliation charge with the EEOC, but the agency was unable to conclude unlawful retaliatory conduct had occurred, the ruling said.

The employee sued PMTD charging unlawful race discrimination and retaliation in May 2017.

Shortly afterward, PMTD notified HCC of the underlying action and sought coverage under its policy, which HCC denied on the grounds the claim was made during an earlier policy report and not timely reported to the insurer.

PMTD obtained a verdict in its favor against the employee after a November 2020 trial.

It sued HCC in U.S. District Court in Atlanta, charging breach of contract, based on HCC’s coverage denial. The district court ruled in the insurer’s favor, and was affirmed by a three-judge appeals court panel.

“Applying the plain and unambiguous Policy language, we agree with the district court’s conclusion that the Discrimination Charge constituted a ‘claim’ under the policy,” the decision said.

As a result, all of the employee’s “claims are deemed to have been made or brought in July 2016,” before the policy period, it said, in affirming the lower court.

Attorneys in the case had no comment or did not respond to a request for comment.