Woody Allen agreed Monday to a $5 million settlement in his lawsuit accusing American Apparel of using an image parodying him as a rabbi without his permission.
Both sides announced the settlement — to be paid by American Apparel’s insurance company — on the morning a trial was to start in federal court in Manhattan. American Apparel president Dov Charney told reporters it wasn’t his decision to settle. The company’s insurance company “controlled the defense” in the case, he said.
Allen had been seeking $10 million from the company for unauthorized use of his image. He argued that he maintains strict control over his image, which has been critical to his success.
Charney’s comment about the insurance company is absolutely accurate. Almost anytime an insurance company provides defense attorneys and potential settlement or judgment funds pursuant to the insurance policy, the insurance company is in charge of how the case proceeds – not the insured defendant. The company can settle whenever it feels that settlement is the best business decision for the insurance company, regardless of the insured defendant’s feelings on the matter.
