The producers of “House of Cards” have lost an insurance lawsuit over more than $29 million in production costs resulting from Kevin Spacey’s firing in 2017.
Producer Media Rights Capital argued that the loss should have been covered by Spacey’s performer insurance, which should have paid if Spacey was unable to perform due to illness. The producer’s lawyer claimed that Spacey suffered from a sex addiction.
After a five-week trial in Santa Monica, a jury ruled Tuesday that Spacey’s alleged illness was not the primary reason for him leaving the show, and therefore his insurance company had no liability. The Firefighters Fund claimed that MRC actually dropped Spacey because of the bad publicity.
“The Firefighters Fund’s intent in issuing this coverage is to cover exactly the costs that the insurance is supposed to cover,” said attorney Leon Gladstone, who is representing the insurance company. “The jury upheld that intent and determined that MRC’s business decision to sever ties with Spacey was not covered.”
Spacey was fired shortly after reports of sexual misconduct during the #MeToo movement emerged in late 2017. His character was canceled in season 6 of the show, and two episodes had to be canceled. The final season ended with only 8 episodes instead of 13. Spacey went to the Meadows, a sex addiction treatment facility in Arizona, for treatment.
Spacey testified at trial that he was diagnosed with sexually compulsive behavior, but said he did not believe the diagnosis was correct.
MRC won a $31 million arbitration award against Spacey in 2021 after an arbitrator found that Spacey violated the company’s sexual harassment policy. The company subsequently filed suit against Lloyd’s of London and the Firefighters’ Fund on the theory that it should pay its costs under the Cast Insurance policy. Mr. Lloyds was quickly dismissed from the case.
In order to proceed with the claim against the Firefighters Fund, the MRC required proof of the diagnosis, but Spacey refused to provide medical records. So MRC struck a deal with Spacey to reduce his arbitration award from $31 million to $1 million in exchange for cooperating with the insurance lawsuit.
In the settlement, Spacey agreed to pay $1 million, equal to 10% of his after-tax income, spread over several years.
