The Law

Legal Spotlight

A look at the latest decisions impacting the industry.
By: | October 3, 2017 • 4 min read

Invasion of Privacy Exclusion Holds Firm

In November 2012, David Emanuel brought a class action lawsuit against the Los Angeles Lakers basketball team.

Emanuel, who had attended a Lakers game the month before, felt duped after responding to an overhead message displayed on the scoreboard. The message invited game attendees to send a text to a specific phone number with the hopes of seeing their message on the screen.

Emanuel sent a text and received an automated message in return. In the subsequent lawsuit, he alleged that the Lakers sent the response message using an automatic dialing system, which, he said, violated the Telephone Consumer Protection Act and cost him and others in text and data charge fees. They sued for $1,500 and damages.

In 2013, a California district judge dismissed the case, stating that by sending the initial text, Emanuel implicitly consented to receiving a confirmation message. The team settled with Emanuel in 2014 during his appeal.

The Lakers were insured under a ForFront Portfolio insurance policy held by Federal Insurance Co. Federal denied coverage of the suit, because the insurer claimed the TCPA fell under a policy exclusion for invasion of privacy.

The Lakers sued Federal for bad faith refusal to defend or indemnify them. A district judge ruled to dismiss the allegation, agreeing with the insurer that the policy’s invasion of privacy exclusion included the TCPA. The Lakers appealed. A divided panel affirmed the judge’s ruling.

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“The panel held that because a Telephone Consumer Protection Act claim is inherently an invasion of privacy claim, Federal Insurance Company correctly concluded that the underlying Telephone Consumer Protection Act claims fell under the Policy’s broad exclusionary clause,” read the court’s decision.

Scorecard: The Los Angeles Lakers are not entitled to coverage for class allegations that the team sent unwanted text messages to fans.

Takeaway: Insurance policies that exclude privacy-related claims should clarify whether TCPA claims fall within the exclusion.

Cyberattack Costs Insurer Millions

Nationwide Mutual Insurance Co. and its unit Allied Property & Casualty suffered a massive data breach on Oct. 3, 2012. Sensitive information of more than 1 million people was stolen from its databases.

The breach affected both existing and potential customers in 32 states and the District of Columbia. Social Security numbers, driver’s license numbers and Nationwide-assigned creditworthiness scores were made available by the hackers.

Shortly after the breach, the insurer notified the customers that their information was compromised. Nationwide offered free credit monitoring and a $1 million identity theft insurance coverage with no deductible to those affected.

In the August 2017 hearing, state attorneys general from each state alleged that the breach stemmed from a security lapse. Nationwide conceded that there was a “criminal data breach,” yet denied any liability for the exposed information. The company said it took the proper and immediate steps to contain the attack.

The two parties reached a settlement of $5.5 million, to be divided amongst the states and the District of Columbia. The settlement relieves Nationwide from most legal and civil liabilities but not from criminal, antitrust, securities or tax liabilities. A spokesperson for Nationwide said that the company’s security remains compliant with data security laws.

In the end, the settlement did not include allegations of data security law violations. “Protecting consumer data is something that we take seriously,” Nationwide said. The company said it will continue to strengthen cyber-security.

Scorecard: The data breach cost Nationwide $5.5 million, which will be given to those whose information was exposed.

Takeaway: Cybersecurity programs should regularly be updated and reviewed for any potential security risks, even when a program follows security laws.

WC Death Benefits Granted to Widower

A grocery store worker was in her office when she suffered cardiac arrest. A store manager heard her fall and rushed to her aid, but it was too late. Her husband filed for workers’ compensation death benefits, claiming his wife’s death was due in part to the stress of her job.

Probable cause of death was ruled to be cardiac arrhythmia, stemming from arteriosclerotic heart disease, likely worsened by obesity.

The emergency responders’ report stated that coworkers heard the deceased saying “her job was stressing her out,” and that she complained of chest pain shortly before collapsing.

The Workers’ Compensation Board granted the husband workers’ comp death benefits on Oct. 15, 2015. The employer and its carrier appealed.

In the 2017 court hearing, the employer alleged that the cardiac event was due to underlying heart disease. There was no way to prove that job stress caused her heart to stop.

New York workers’ comp law states that barring substantial evidence to the contrary, “an unwitnessed or unexplained death [that] occurs during the course of a decedent’s employment, Workers’ Compensation Law provides a presumption … that the death arose out of the decedent’s employment.”

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Because there was no formal autopsy performed on the deceased, the husband used the medical report as proof his wife’s cardiac arrest was related to the stress of her job. The court ruled the deceased’s work-related stress was a “significant contributing factor,” and her husband should receive death benefits.

Scorecard: The workers’ compensation carrier will pay death benefits to the deceased employee’s husband.

Takeaway: When injury or illness occurs on the job, employers must be diligent in reporting the incident and recording each step taken.

Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

Maila Aganon is the personification of the American dream. The vice president of treasury and risk for Caesars Entertainment Corp. immigrated from the Philippines and worked her way to the top.
By: | October 12, 2017 • 4 min read


R&I: What was your first job?

I actually had three first jobs at the same time at the age of 16. I worked as a cashier in a fast-food restaurant, a bank teller and a debt collector for an immigration law firm.

R&I: Who is your mentor and why?

I have a few. The first one would be the first risk manager I reported to. He taught me the technical part of the job, risk financing, captives and insurance. I am also privileged to be mentored by Lori Goltermann (CEO of U.S. Retail for Aon Risk Solutions).  From her I learned to be resilient and optimize life/work balance. Then of course I also have a circle of ladies at work who I lean in to!

R&I: How did you come to work in this industry?

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I was once a bank teller and had a client who was an insurance agent. He would come in every day to make deposits. One day, he offered me a job. He said, “How would you like to have your own desk, your own phone and your own computer?” And I said, “When do I start?” I worked for this personal lines insurance company for six years.

R&I: Did you take to it immediately?

Yes, I did sales, claims and insurance accounting. I left for a couple years and that is when AAA came calling, which was my first introduction to risk management. I didn’t know there was such a thing as commercial insurance. They called me and the pitch was “how would you like to run a captive insurance company?”

R&I: What have you accomplished that you are proudest of?

It is not so much the job but I say that I am the true product of the American Dream. I came to the U.S. when I was 16. I worked three jobs because I didn’t want to go to high school (She’d already graduated high school in the Philippines.) I spoke very little English, and due to hard work, grit and a great smile I’m now here working with all of you!

R&I: What is your favorite book or movie?

In movies, it is a toss-up between Gone with the Wind and Big Daddy.

R&I: What is your favorite drink?

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I like anything sweet. If you liquify a dessert that’s my perfect drink.

R&I: What is the most unusual/interesting place you have ever visited?

This is easy because I just got back from Barcelona on a side trip. I visited the Montserrat Monastery, which is a thousand-year old monastery. It was raining and foggy. I hiked for three hours and I didn’t see a single soul. It was a very peaceful place.

R&I: What is the riskiest activity you ever engaged in?

This is going back to working at a fast food chain when I was young. I worked in a very undesirable location in San Francisco. At 16 I used to negotiate with gang members so they wouldn’t rob me during my shift. I had to give them chicken so they wouldn’t rob me.

Maila Aganon, VP, Treasury and Risk, Caesars Entertainment Corp.

R&I: If the world has a modern hero, who is it and why? 

I can’t say me. They have to be my kids Kyle and Hailey. They can make me laugh and cry within a half-minute of each other. Kyle is 10, a perfect Mama’s boy. Hailey is seven going on 18.

R&I: What about this work do you find the most fulfilling or rewarding?

I think the most fulfilling part is how you build relationships with people and then after a while they become your friends.

R&I: What is the risk management community doing right?

Risk managers do a great job of networking. They are number one. Which is not a surprise because the pillar of our work is building a relationship with underwriters, clients and brokers.

R&I: What could the risk management community be doing a better job of? 

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I am experiencing that right now; talent.  We need to a better job in attracting and retaining talent. Nobody knows about what we do. You tell someone ‘I’m as risk manager’ and they give you a blank look. What does that mean?

We’re great marketers and we should use this skill set in attracting talent. We should engage our universities, our communities, even our yoga groups and talk to them about the exciting world of risk. It is an exciting career because there is nothing like it.

R&I: What emerging commercial risk most concerns you? 

It would have to be the increasing cyber risk and the interdependency of systems.

R&I: What does your family think you do? 

I took my seven year old daughter once to an insurance event that had live music, dancing and drinks. She thinks that whenever I go to an insurance meeting, I’m heading to a party.




Katie Siegel is an associate editor at Risk & Insurance®. She can be reached at [email protected]