United States: The Sentinel Strike: The Hartford's Gift To New York Insurers In The War To Stop Policyholder Experts From Claiming Ambiguities Exist In Clear Policy Exclusions

Last Updated: August 28 2018
Article by Jason A. Morris

In this age of exponentially increasing technology, we can rely on one certainty in property casualty jurisprudence – that is, bold policyholder assertions supported by even bolder "expert" opinions. In BF Advance, LLC v. Sentinel Insurance Company, No. 16-cv-5931 (E.D.N.Y. Mar. 20, 2018), decided in New York federal court this past March, the policyholder argued that a CGL policy's Software Exclusion does not apply to injuries caused by software, and hired an insurance broker to bolster that curious view with his declaration that the subject language was indeed ambiguous. The Hartford affiliate Sentinel Insurance moved to strike, and the court agreed. Thus, the Sentinel strike was born. The Sentinel decision restores certainty regarding testimony of legal conclusions: if you are not the court, you cannot provide opinion testimony that contract language is ambiguous.

How LFOW Lost Its LOL

The Underlying Action was filed by Live Face on Web ("LFOW"), self-described "developer and owner of 'live person' computer software ('LFOW software'), which 'allows a company to display a video of a 'walking' and 'talking' personal host who introduces a website to an online visitor." In other words, LFOW made "hosts" like everyone's favorite cowboys and samurais from the popular HBO series Westworld, but instead of offering you a whiskey in a saloon, the host might point out a website's search feature or "contact us" section.

LFOW alleged that the policyholder BF Advance, LLC's ("BFA") website was linked to an infringing version of LFOW Software. LFOW specifically alleged "that in order for the spokesperson to appear on the website visitor's screen, it is 'necessary' that 'a copy of the infringing version of the LFOW Software...be distributed to website visitors in [the policyholder's] advertising."

BFA Is Not Sentinel's BFF

The policyholder noticed the Underlying Action to Sentinel and sought defense benefits under Sentinel's CGL Policy (which was renewed annually for a period of years and collectively referred to by the Court as the "Sentinel Policies"). Under the policies, Sentinel had a duty to defend "suits" seeking damages for "personal and advertising injury," subject to the policies' exclusions. Sentinel disclaimed coverage, citing, among at least three other exclusions, the Software Exclusion, which provided:


  1. Applicable to Business Liability Coverage
    This insurance does not apply to ...

p. Personal and Advertising Injury

"Personal and advertising injury": ...

(12) Arising out of:

(d) Computer code, software or programming used to enable:

(i) Your web site; or

(ii) The presentation or functionality of an "advertisement" or other content on your web site[.]

BFA filed suit a few months later, arguing that Sentinel was obligated to provide a defense and indemnification. After an agreed-upon truncated discovery period, the parties filed cross summary judgment motions. Six months after the stipulated discovery termination date, BFA filed a declaration from a previously-undisclosed expert, arguing that the above-quoted Software Exclusion was ambiguous.

Sentinel Strikes Back

Sentinel moved to strike the expert affidavit, and the court granted the motion on multiple grounds. In response to the policyholder's argument that it is a "matter of fact" not "law" that the Software Exclusion was ambiguous, the court did not mince words:

Indeed, only the court may decide if a contract term is ambiguous, and the court must make its determination as a matter of law without consideration of extrinsic evidence, such as the Stein Declaration. The court therefore finds that the Stein Declaration does not contain important testimony.

The court also rejected BFA's argument that the expert testimony was necessary because the ambiguity was not clear on the face of the pleadings, adopting Sentinel's argument that BFA "should have been, aware of defendant's position that the Software Exclusion precluded coverage as early as March 21, 2016, when defendant sent a position letter stating the same."

The Court Calls a Software a Software

Having stricken the policyholder expert, the court considered the Software Exclusion and found it "unambiguously applies to the Underlying Action, thus relieving defendant of the duty to defend." The court addressed the policyholder's argument that the lack of a policy definition for a term makes it ambiguous:

Plaintiffs ineffectively argue that the Software Exclusion is ambiguous because the Sentinel Policies do not define computer code, software, or programming....This fact alone, however, does not render the exclusion ambiguous....Because nothing in the Sentinel Policies themselves or the parties' papers suggests that the parties intended 'computer code, software or programming' to mean anything other than their ordinary terms, the court looks to the dictionary definitions of those words.

The court then used those definitions to analyze the applicability of the Software Exclusion, reaffirming New York's use of the "but-for" test for the phrase "arising out of" in policy exclusions. Using this test, the court found:

On its face, the Underlying Complaint alleges an injury that arises out of the use of software. The Underlying Complaint alleges an injury in the form of plaintiffs' "unlawful use, reproduction and/or distribution of the infringing version of the LFOW Software on [BFA's] website which constitutes infringement of LFOW's intellectual property rights, including ... LFOW's registered copyright materials(s)." ... Certainly, these allegations demonstrate that, but for plaintiffs' alleged "use," "reproduction," and/or "distribution" of the infringing LFOW Software, there would be no cause of action in the Underlying Complaint.

For good measure, the court also found that the Software Exclusion applied because the Underlying Action alleged that the offending software enabled the presentation of advertising

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions