Roc Nation Wins Lawsuit Over Maroon 5 Manager’s Death


Feldstein died suddenly from a pulmonary embolism, with the Los Angeles Medical Examiner declaring his cause of death as natural. But HCC denied paying out Roc Nation’s claim and Roc Nation responded by suing in U.S. District Court Southern District of New York on Jan. 18, 2019, for wrongfully denying insurance coverage.

HCC argued in court papers that Roc Nation was precluded from any recovery because the company failed to cooperate with HCC’s investigation of the claim — a contention that Roc Nation denied. HCC also argued that the policy language required the insurance payment be reduced by all future profits that could have been traceable to Feldstein’s services. To this, Roc Nation’s legal team argued that the policy’s plain language outlines that it was entitled to recoup from HCC its full investment in CAM, minus any dividends it had received from CAM by the time Feldstein died.

Both sides debated over whether the meaning of “and/or,” writing “insured” rather than “insured person,” and whether misplaced words such as stating “Direct Ascertained Net Loss” rather than “Direct Net Ascertained loss” created other contractual meanings. HCC attorneys tried to convince the judge that term “generated” in the policy referred to revenue that Feldstein meant to set forth “to bring into existence.”

Ultimately, in a 52-page ruling issued Wednesday in U.S. District Court Southern District of New York, Judge Paul Engelmayer sided with Roc Nation finding it “complied with the overwhelming majority of HCC’s requests, and offered reasonable justifications when it failed to do so.” Engelmayer said he found Roc Nation submitted extensive information in response to HCC’s “unreasonably broad” requests and had “only drawn the line when the requests [were] overtly irrelevant or not reasonably-tailored. He also said that term “generated” referred to revenue that was generated and was not a “forward looking” meaning.

Engelmayer ruled that HCC must pay Roc Nation a $12,529,222 policy amount, minus any money generated by Feldstein while he was alive and performing services through December 22, 2017. Engelmayer, however, denied that any post-death revenue from artists formerly associated with Feldstein or CAM needed to taken into account.

“Cases against insurance companies are complex and fact intensive,” says Scott Zolke, a partner at Loeb & Loeb, not affiliated with the case. “It is incumbent upon the insurance company to say precisely what they’re covering, as opposed to using terms that can be interpreted a couple of different ways. And this was an instance where when you look at these terms that I want to say were conflicting, it clearly created an ambiguity, and that ambiguity is going to every time be interpreted against the insurance company and in favor of the insured.”

“It is of paramount importance to specifically and clearly say what you’re insuring…. It underscores the importance of actually reading what you’re signing. A typo leaves us with ambiguity and ambiguity leads to litigation…. If you don’t define precisely what you are insuring, then you’re leaving yourself subject to a differing view.”

Attorneys for Roc Nation and HCC did not respond to request for comment.

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