Hanover Ordered to Pay Rock Singer $2 Million After Memphis Studio Fire Dispute

A federal appeals court has ruled that Hanover Insurance must pay $2 million to recording artist John Falls, lead singer of Egypt Central, after a decade-long battle over a Memphis recording studio fire. The case stems from a 2015 arson that damaged the iconic House of Blues studio, where Falls leased space. Falls had insured his equipment and business income separately under a Hanover policy, but the insurer denied most of his claim following revelations of fraud by the property owner, Christopher Brown.

Hanover initially paid Brown $2.2 million and offered Falls just $250,000. When it was later discovered that Brown had submitted forged receipts and had a pattern of fraudulent claims, Hanover sued to recover the payouts and tried to invalidate all related claims. Falls, who was not involved in the fraud, counter-sued and won a $2.7 million jury verdict. Hanover attempted to reverse the decision, changing its argument mid-litigation — a tactic the courts strongly criticized.

The U.S. 6th Circuit Court of Appeals upheld the district court’s ruling, noting Hanover’s late-stage argument shift amounted to ‘sandbagging.’ The court emphasized that Falls’s claim was valid under Tennessee law, which recognizes a tenant’s insurable interest in leased property. The opinion also confirmed that the insurer’s obligations to separate policyholders couldn’t be nullified by one party’s misconduct.

Brown was later convicted of insurance fraud and sentenced to more than two years in prison. The court found that Falls had suffered a real financial loss, independent of Brown’s wrongdoing, and was entitled to full coverage under his policy. This ruling underscores the importance of honoring legitimate claims even amid broader fraud investigations.