BRATZ/BARBIE: MGA to sue insurance companies

Judge Stephen Larson issues order allowing MGA to pursue damages against two insurers in Bratz case.
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Reuters has reported that the order establishes that both insurers, Evanston and Crum & Forster, had a duty to defend the firm in its litigation against Mattel over the Bratz dolls.

Since 2004, MGA has spent close to $100 million defending itself against litigation brought by Mattel over ownership of the brand.

The firm will now seek to recover all legal fees and costs, consequential damages to its business, and punitive damages occasioned by the failure to defend by the insurers.

MGA attorney Michael Bidart, commented: "This is a significant development which will open the way for recovery of all past and future damages suffered by MGA."

When Mattel sued MGA the firm tendered to four consecutive insurance companies to defend the claim. All four insurance companies - Hartford, Evanston, Crum & Forster and Lexington - denied a defence.

Forced to defend itself, MGA filed suit against the four insurers in April last year. The lawsuit alleged a bad faith failure to defend the firm and protect it from the effects of the litigation.

In May 2008, only one of the insurers, Lexington insurance, agreed to defend MGA under a reservation of rights.

Subsequently, both Hartford and Crum & Forster entered into confidential settlements with MGA for past obligations. Evanston, however, continued to deny any defence obligation, which led to the Motion for Summary Judgment.

With the failure to defend issue now resolved in its favour, MGA will seek the earliest available trial date to recover damages.


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