Lady Gaga recently had to back out of the remaining dates on her Born This Way Ball tour thanks to a bum hip.
As concert promoters discuss with insurers who will be responsible for picking up the cost of a cancellation that is estimated at $25 million, a legal dispute has erupted over the withdrawal of the pop singer from a concert in Indonesia on an earlier leg of the tour.
Gaga (real name: Stefani Germanotta) was scheduled to perform in Jakarta on June 3, 2012, but various Islamic or other groups began mounting a protest. She backed out, and now Live Nation LGTours says it has suffered substantial damage.
Live Nation, Mermaid Touring and The Atom Factory are now suing a Lloyds of London syndicate for allegedly not living up to the terms of a "Terrorism Policy," accusing the defendant of "despicable conduct that subjected Plaintiffs to cruel and unjust hardship in conscious disregard of the Plaintiffs rights... with the intent to vex, injure or annoy the Plaintiffs, such as to constitute oppression, fraud or malice..."
Insurance disputes aren't usually this searing.
In advance of the scheduled Lady Gaga concert in Indonesia, many local papers covered the threats.
For example, the Jakarta Globe reported on May 17, 2012 that the "hardline Islamic Defenders Front (FPI) said it would dispatch 30,000 of its members to prevent Gaga from entering Jakarta."
The Australian reported that a spokesperson for the group posted a picture on Facebook of a man in a turban and sunglasses, holding a $50 ticket to the concert. The caption read, "We have gotten Lady Gaga tickets. Not to watch but for us to enter... Our target is to stop the concert."
Local police were also reported that it couldn't guarantee the security for Lady Gaga.
According to the lawsuit filed in California federal court, the concert was canceled in order "to prevent bodily injury and property damage and to protect the lives and safety of Lady Gaga, all members of the Born This Way Tour, and the public."
Afterwards, Live Nation attempted to collect on its "Terrorism Insurance" policy, which the plaintiff says they paid a substantial premium to obtain. The language of the policy stated indemnification for the "ascertained net loss" for cancellations due to "the sole and direct result of Terrorism and/or Sabotage or Threat."
The lawsuit says that Beasley Syndicate 623 at Lloyds of London denied coverage "based on language and purported conditions that are not contained in The Terrorism Policies."
The plaintiff is seeking at least $75,000 of Ascertained Net Loss for breach of contract and breach of the implied covenant of good faith and fair dealing. In addition, punitive damages are being sought.
A representative at Beasley Syndicate wasn't immediately available for comment.