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Law360 (October 28, 2020, 4:40 PM EDT) -- The Hartford Financial Services Group Inc. is urging a California federal court to drop it from a waxing salon's COVID-19-related loss suit, arguing it was just the holding company of the insurer that issued the policy and therefore has no legal liability toward the salon whatsoever.
Hartford said Tuesday that it was Sentinel Insurance Co. that issued the policy to Franklin EWC Inc. and it was not a party involved in the insurance contract. Hartford said it is not an insurer entity itself, but rather owns carriers that write policies.
"Sentinel alone insured Franklin EWC, and only Sentinel could have breached the agreement," Hartford said in the motion. "HFSG cannot breach obligations it does not have."
Franklin EWC operates a European Wax Center in Fresno, California, with over 30 employees, according to court records. The salon said it was forced to close and lay off its staff in March due to state-mandated closures. The salon later sued Sentinel and Hartford, seeking business interruption coverage after the insurers denied payment.
Last month, a California magistrate judge said Sentinel has no duty to cover the salon's pandemic loss because a virus exclusion bars coverage, but allowed the salon to amend its complaint. The judge sided with Hartford's position that claims against it should be dropped because Hartford was never a party to the policy.
On Tuesday, Hartford argued that the salon's amended complaint offered nothing convincing regarding why it included Hartford in the suit, since it has no contract with the salon.
"The very first page of the policy makes clear that the 'writing company' is 'Sentinel Insurance Company Ltd.' and the declarations page likewise lists the insurer as 'Sentinel,'" Hartford said.
The salon has alleged it was "informed" that Hartford wrote and approved the parts of the policy at issue, according to Tuesday's motion. Franklin EWC has argued that Hartford is responsible for coverage duty because the policy language referenced the term "The Hartford" throughout.
However, Hartford said, "'The Hartford' is not a legal entity, but a brand name used by multiple, distinct entities, including Sentinel. HFSG's Form 10-K explains that the term 'The Hartford' is a name that generally refers to it and its subsidiaries."
The company said that the California state insurance regulator's website only lists its subsidiaries that do business in California, not Hartford Financial Services Group itself.
Hartford also asserted that the court does not have personal jurisdiction over it, as it's not based in California and does not have any relation to California in connection with this coverage dispute.
"As the [Franklin EWC amended complaint] asserts, HFSG is a Delaware corporation with a principal place of business in Hartford, Connecticut," it said. "HFSG has no significant business operations in California."
Counsel for the parties did not immediately respond to requests for comment Wednesday.
Franklin EWC is represented by Nanci Eiko Nishimura, James Gerard Beebe Dallal, Anya N. Thepot, Brian Danitz and Andrew F. Kirtley of Cotchett Pitre & McCarthy LLP.
Hartford and Sentinel are represented by Sarah D. Gordon, Cody Austin DeCamp and Anthony John Anscombe of Steptoe & Johnson LLP.
The case is Franklin EWC Inc. v. Hartford Financial Services Group et al., case number 3:20-cv-04434, in the U.S. District Court for the Northern District of California.
--Editing by Daniel King.
For a reprint of this article, please contact reprints@law360.com.
