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Eighth Circuit Holds Violation of Statutes Exclusion Precludes Coverage for Debt Collection Claims

August 26, 2021

In an August 25, 2021, opinion, the Eighth Circuit affirmed the District Court of North Dakota’s grant of summary judgment to the insurer, holding there was no insurance coverage under a CGL Policy for claims that a debt-collection law firm had wrongfully garnished wages.  The court held the claims of “bodily injury” were not caused by an “occurrence” because the law firm’s actions in garnishing wages and communicating with others about the garnishment were intentional.  It held that the Violation of Statutes exclusion precluded coverage for claims of “personal and advertising injury” because the FDCPA is a statute that “prohibits or limits the … communicating … of material or information.”  Finally, the Court held the Violation of Statutes exclusion applied not only to the express FDCPA claims, but also to the common-law claims, because the claims all arose out of the same conduct – conduct alleged to violate the FDCPA.  

This case was handled by ACKSP attorney Beth Jenson Prouty.  Beth, along with many of our insurance coverage attorneys, are licensed to practice in North Dakota federal and/or state courts and welcome your insurance coverage questions.