Insurer Refuses $5M Demand in Motocross Injury Dispute

A tragic accident at the 2022 AMA Amateur National Motocross Championship in Hurricane Mills, Tennessee, has sparked litigation and insurance coverage disputes involving a permanently injured child. The event, held at Loretta Lynn’s Ranch and produced by MX Sports Inc., was sanctioned by the American Motorcyclist Association (AMA). During the weeklong event, a child identified as S.R.F. was swimming in a nearby creek when another attendee jumped from a cliff and landed on her, resulting in a catastrophic spinal cord injury that left her permanently paralyzed.

In August 2023, the child’s parents, James and Kristin Faulkner, filed suit against MX Sports in Tennessee federal court. The complaint accuses the event organizer of negligence, gross negligence, and recklessness, alleging that MX Sports was aware of the cliff-jumping activity and failed to adequately prevent or discourage it, despite its own rules prohibiting such conduct.

The Insurance Dispute

In response to MX Sports’ demand for additional coverage, New York Marine and General Insurance Co. filed a declaratory judgment action in the U.S. District Court for the Southern District of Ohio. New York Marine offered to pay the $1 million per occurrence limit under MX Sports' commercial general liability (CGL) policy, but this offer was not accepted. To date, the insurer has only covered defense costs while defending MX Sports under a reservation of rights.

In addition to the Ohio federal case, MX Sports has also filed a competing declaratory judgment action against New York Marine in state circuit court in Humphreys County, Tennessee. That case remains pending and raises overlapping issues related to coverage and policy interpretation.

According to the complaint filed Monday, New York Marine asserted that MX Sports was not entitled to coverage under the AMA policy because the event in question was not properly reported or sanctioned under its terms. The insurer emphasized that coverage is only triggered for officially recognized “events and activities,” and that the 2022 championship did not meet those criteria. Furthermore, the child’s injury occurred during an ancillary activity—cliff jumping on private property not part of the official competition—which further disqualified it from coverage under the AMA policy.

The insurer underscored that even if the AMA policy applied, a key anti-stacking provision prevents MX Sports from recovering more than one policy’s per-occurrence limit. As the complaint states, “New York Marine is not required to pay combined limits of $6 million in any event. The MX Sports policy and AMA policy cannot cover the same loss. Rather, only the policy with the largest each occurrence limit would apply, assuming coverage otherwise exists under both policies.”

The Settlement Offer and Ongoing Litigation

While defending MX Sports under a reservation of rights, New York Marine agreed to pay the $1 million limit under the CGL policy to resolve the Faulkner lawsuit. However, MX Sports has pushed for the insurer to also tender the $5 million limit available under the AMA’s group policy. New York Marine refused in an April 3 letter, stating that the AMA policy was inapplicable and that the event organizer never procured or reported the championship event under that policy.

MX Sports has not publicly responded to the insurer’s recent filing, and no counsel information was available at the time of publication. A spokesperson for New York Marine declined to comment on the litigation.

The Legal Arguments Ahead

The case highlights key legal issues surrounding overlapping insurance coverage and policy exclusions. Central to New York Marine’s position is that MX Sports failed to ensure the 2022 event was officially recognized under the AMA policy’s terms. The complaint argues that even if the event were covered, the incident itself arose outside the competitive area and from unsanctioned activity—placing it beyond the policy’s scope.

Moreover, the insurer’s reliance on an anti-stacking clause is intended to preempt any effort by MX Sports to claim both policies' full per-occurrence limits. If accepted by the court, this argument could limit the insurer’s obligation to just the $1 million already paid.

Law Firms Involved

New York Marine is represented by Lewis Brisbois Bisgaard & Smith LLP and Stewart Smith, with Aimee E. Muller and William F. Stewart serving as lead counsel. MX Sports’ legal representation has not been publicly identified.

What’s Next?

The coverage dispute is likely to hinge on whether the 2022 championship was formally sanctioned and reported under the AMA policy and whether the injury occurred within the scope of a covered event. As the declaratory action moves forward, the court will determine whether MX Sports can compel its insurer to contribute an additional $5 million or whether the $1 million payout represents the full extent of coverage.

The case is New York Marine and General Insurance Co. v. MX Sports Inc., case number 1:25-cv-00274, in the U.S. District Court for the Southern District of Ohio.