Scottsdale Insurance Challenges Cheesecake Factory Injury Coverage in Federal Court
On August 6, 2025, Scottsdale Insurance Company filed a complaint in the U.S. District Court for the District of Nevada (Case No. 2:25-cv-01452) seeking a judicial ruling that it has no duty to defend or indemnify All Type, LLC, or The Cheesecake Factory in two consolidated lawsuits stemming from an employee injury. The case centers on a June 24, 2023, incident where Amy Reyes, a bartender at The Cheesecake Factory’s Henderson, Nevada location (160 South Green Valley Parkway), suffered an electric shock while cleaning a refrigerator cooler. Reyes filed a lawsuit in Clark County District Court (Case No. A-24-895563-C) against All Type, alleging negligence, negligent hiring, supervision, and training, products liability, breach of warranty, negligent failure to warn, and third-party beneficiary claims. A second lawsuit by Corvel Corporation and The Cheesecake Factory (Case No. A-25-918394-C) seeks over $100,000 in workers’ compensation benefits paid to Reyes, plus damages for ongoing medical treatment and lost income. Both cases were consolidated on June 2, 2025.
Scottsdale’s Position
Scottsdale issued a commercial general liability policy (Policy No. CPS7665624) to All Type, effective October 5, 2022, to October 5, 2023, as part of a Master Services Agreement (MSA) dated November 9, 2022, between All Type and The Cheesecake Factory. The MSA required All Type to maintain liability insurance and name The Cheesecake Factory as an additional insured for maintenance work, including refrigeration services, at several Nevada locations. Scottsdale argues that its policy’s “Injury to Employee and Worker Exclusion” endorsement bars coverage for Reyes’ claims, as it excludes bodily injury to employees, workers, contractors, or subcontractors arising in the course of employment. Additionally, the “Additional Insured – Owners, Lessees or Contractors” endorsement limits coverage to contractually required liabilities, excluding professional services or injuries post-work completion. Scottsdale claims these provisions negate any obligation to cover the claims, as Reyes was injured during her employment. The insurer is defending All Type under a reservation of rights but seeks a court declaration that it owes no defense or indemnification and is entitled to reimbursement for defense costs, citing Nevada law and the Nevada Supreme Court’s decision in Nautilus Insurance Company v. Access Medical.
Implications and Context
The case highlights the complexities of insurance coverage disputes in workplace injury claims, particularly when subcontractors and additional insureds are involved. Scottsdale’s reliance on the employee injury exclusion aligns with industry practices to limit liability for workplace accidents, which are typically covered by workers’ compensation. However, the dispute could hinge on whether the court finds the exclusion applicable to Reyes’ specific claims or if The Cheesecake Factory’s status as an additional insured creates coverage obligations. The outcome may also clarify the scope of such exclusions under Nevada law.
This case follows other legal actions involving The Cheesecake Factory, including a $1.208 million class action settlement in 2025 for undisclosed wage ranges in Washington job postings (Lowe v. The Cheesecake Factory, Case No. 23-2-20277-5 SEA) and a $4.75 million FACTA settlement in 2022 for excessive credit card information on receipts. While these cases are unrelated, they reflect ongoing legal scrutiny of the restaurant chain. For updates on the Scottsdale case, check Insurance Business America or the federal court docket at www.pacer.gov.