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The case of Maritz Holdings Inc. v. Certain Underwriters at Lloyd's London, No. 4:18-CV-00825 SEP, 2020 WL 7023952 (E.D. Mo. Nov. 30, 2020), came about in this way. Maritz allegedly experienced cyber-security breaches. At this time of the year in particular, gift cards are on our minds. In the Maritz case, the cyber-security breaches endured by Maritz occurred because of gift cards.
Gift card information was allegedly stolen from Maritz. It claimed coverage under insurance policies issued by Lloyds of London. "Underwriters issued breach-response insurance coverage to Maritz[.]" Maritz, 2020 WL 7023952, at *1.
Underwriters filed a motion to dismiss directed to Maritz's claim that the Underwriters' refusal to pay was vexatious and so actionable under Missouri "bad-faith" or vexatious refusal statute. (Maritz also asked the Court to treat its motion as a motion for judgment on the pleadings. The Court said the same standard would apply to measure the motion.) In pertinent part, Underwriters argued that the vexatious-refusal-to-pay claim brought under the Statutes of Missouri should be dismissed because a choice-of-laws provision in the insurance policy required New York law to apply here, not Missouri law.
The Court disagreed with Underwriter and agreed with Maritz in this regard, that Missouri public policy mandates that Missouri law be applied when the protection of Missouri citizens is at stake:
Maritz argues that an insurer should not be allowed to achieve that same end via a choice-of-law provision that works to strip Missouri insureds of the protections afforded by the vexatious refusal statute. The Court agrees.
Maritz, 2020 WL 7023952, at *3.
After announcing the public policy of Missouri, the Court upheld Maritz's vexatious refusal claim and denied Underwriters' motion to dismiss.
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