Match Group, LLC v. Beazley Underwriting Limited

Background

Match Group, LLC brought an insurance-coverage lawsuit against Beazley Underwriting Limited and obtained judgment on its breach-of-contract claim. Match then moved for attorney’s fees and expenses. The motion was referred to Magistrate Judge Sarah L. Cave, who recommended denying the request. Match objected; Beazley did not object but responded to Match’s objection.

Legal standard

The district court reviewed the challenged portions of the magistrate judge’s report and recommendation anew, and reviewed the unchallenged portions for clear error. The court applied New York law because the parties’ briefs treated New York law as governing the fee issue.

Reasoning

Under New York law, an insured generally cannot recover the legal fees incurred in bringing an affirmative lawsuit against its insurer to establish rights under an insurance policy. An exception may apply when the insurer takes legal steps that place the insured in a defensive position, such as pursuing an action to escape its policy obligations.

The court rejected Match’s argument that Beazley had triggered this exception. First, Beazley’s appeal of the judgment was a continuation of the lawsuit Match had brought, not a new action placing Match on the defensive. The court also noted that the Second Circuit had not yet ruled on Beazley’s duty to defend, and stated that Match would not be entitled to fees for the appeal even if the Second Circuit affirmed the judgment and found such a duty.

Second, Beazley’s coverage-denial letter and later communications were routine coverage disclaimers and were not sufficient legal steps. Third, the June 2, 2022, email that Match characterized as an instruction to sue appeared instead to advise Match about a Beazley entity that could be sued in federal court. The court noted that Match had already sent Beazley a draft complaint. Finally, Beazley’s motion to dismiss was a defense to Match’s lawsuit, not the equivalent of filing a lawsuit itself.

Disposition

The court overruled Match’s objection and adopted the relevant portion of the report and recommendation in full, thereby denying Match’s request for attorney’s fees and costs. The Clerk of Court was directed to close the motion at Docket 57.