Circuit panel rules against Amber Heard in insurance dispute

A 9th U.S. Circuit Court of Appeals panel ruled on Monday in favor of an insurance provider that actress Amber Heard claimed had breached its duty to her by failing to defend her against defamation claims filed by her ex-husband, actor Johnny Depp.

The dispute arose in part from Heard retaining Virginia law firm Cameron McEvoy PLLC before notifying the insurance provider, New York Marine and General Insurance Co., of the lawsuit. New York Marine and General Insurance Company v. Heard, 23-3399, 23-3585 (9th Cir. Nov. 25, 2024) (unpublished).

"New York Marine did not breach its duty to defend Heard," ruled the panel. "New York Marine agreed to 'provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent.' New York Marine fulfilled that duty by continuing the appointment of Cameron McEvoy."

The panel included 9th Circuit Judges Andrew D. Hurwitz and Roopali H. Desai, as well as 2nd Circuit Judge Barrington D. Parker sitting by designation.

Musick Peeler & Garrett LLP partners Cheryl A. Orr and Lawrence A. Tabb represent New York Marine. Tabb declined to comment without first consulting his client on Monday.

Heard is represented by Christopher T. Pasich and Kirk A. Pasich of McGuireWoods LLP in Los Angeles. They did not respond to phoned or emailed requests for comment on Monday.

Depp sued Heard for defamation in Virginia state court in 2019 over comments she made in a Washington Post opinion column that he had domestically abused her, according to Monday's ruling.

Heard held a policy with New York Marine providing that it would indemnify her against legal action for up to $1 million.

Despite this, the ruling said, Heard retained Cameron McEvoy to defend her against Depp's lawsuit, waiting some six months to notify New York Marine of the action.

"New York Marine agreed to defend her subject to a general reservation of rights, which stated that 'to the extent California law does not permit an insurer to indemnify the insured, no indemnity can be provided.' New York Marine continued the appointment of Cameron McEvoy PLLC as her counsel," Monday's decision read.

Heard then claimed New York Marine's reservation of rights created a conflict of interest, retaining separate counsel whose costs were partially covered by Travelers Insurance Company, prompting Cameron McEvoy to withdraw.

"New York Marine agreed to reimburse Travelers for some of the amounts it had paid toward Heard's new defense counsel," the ruling read. "New York Marine contends it paid Travelers over $600,000 for its share of the defense. A judgment was entered against Heard in the defamation case, which was later settled. Travelers paid the entire amount of the settlement."

New York Marine subsequently sued Heard for a declaration that it had fulfilled its duty, prompting her counterclaim for breach of duty and implied good faith and fair dealing.

In a Nov. 7 hearing, the appellate panel questioned her attorney, Christopher Pasich, as to what damages Heard suffered if there was never a point in the case where she wasn't represented by counsel.

"The problem is that Ms. Heard is entitled to a defense between both," Pasich answered. "Ms. Heard is entitled to a defense from Travelers, Ms. Heard is entitled to a defense from New York Marine, and just because she got a defense from Travelers, which wasn't a complete defense of everything that she had paid in the case, it doesn't obviate New York Marine's obligations under California law to provide a defense."

In Monday's ruling the panel affirmed that there had been no conflict of interest between New York Marine and Heard.

"Cameron McEvoy's attorneys litigated the defamation case in Virginia, were members of the Virginia bar, and were bound by Virginia's, and not California's, ethics rules," the ruling said. "Unlike California, Virginia's ethics rules provide that a lawyer appointed by an insurer owes a duty only to the insured, not to the carrier."

The panel further dismissed the claim for breach of an implied covenant of good faith and fair dealing, noting that it would require Heard to allege that due benefits under the policy were withheld without proper cause.

"New York Marine fulfilled its duty to defend under the policy, and Heard no longer claims that New York Marine failed to indemnify her," the panel ruled. "Heard has therefore failed to plausibly allege facts establishing the withholding of a benefit due under the policy. The district court thus correctly dismissed Heard's breach of an implied covenant claim."