Justia Insurance Law Opinion SummariesArticles Posted in U.S. Court of Appeals for the Second Circuit
Global Reinsurance Corp. of America v. Century Indemnity Co.
This appeal arises out of a dispute between Century and Global over the extent to which Global is obligated to reinsure Century pursuant to certain reinsurance certificates. The district court held that the dollar amount stated in the “Reinsurance Accepted” section of the certificates unambiguously caps the amount that Global can be obligated to pay Century for both “losses” and “expenses” combined. Century contends that Global is obligated to pay expenses in addition to the amount stated in the “Reinsurance Accepted” provision and that, at a minimum, the district court erred in concluding that the certificates were unambiguous. The court certified to the New York Court of Appeals the following question: Does the decision of the New York Court of Appeals in Excess Insurance Co. v. Factory Mutual Insurance Co., impose either a rule of construction, or a strong presumption, that a per occurrence liability cap in a reinsurance contract limits the total reinsurance available under the contract to the amount of the cap regardless of whether the underlying policy is understood to cover expenses such as, for instance, defense costs? View "Global Reinsurance Corp. of America v. Century Indemnity Co." on Justia Law
Infrassure, Ltd. v. First Mutual Transportation Assurance Co.
Parties to a facultative reinsurance certificate differ as to which of two arbitration provisions govern the resolution of a dispute that has arisen between them. First Mutual, the ceding company, sought to compel its reinsurer, Infrassure, to submit to arbitration governed by an endorsement. Infrassure filed suit seeking a declaratory judgment that the arbitration provision contained in the body of the form is controlling. First Mutual counterclaimed. The district court held that the form’s procedures governed, granted declaratory relief in favor of Infrassure, dismissed First Mutual’s counterclaims, and denied the request to compel arbitration. The court concluded that the contract is unambiguous and the arbitration clause in the body of the certificate controls. The court explained that its reading of the facultative certificate is easily confirmed by consulting other provisions. Accordingly, the court affirmed the judgment. View "Infrassure, Ltd. v. First Mutual Transportation Assurance Co." on Justia Law
Fireman’s Fund Ins. Co. v. Great Am. Ins. Co.
Fireman’s Fund, Great American, and MSI issued insurance policies that provided various coverages for a dry dock in Port Arthur, Texas owned by Signal. After the dry dock sank in 2009, Signal and Fireman’s Fund sought contributions from Great American and MSI for the loss of the dry dock and resulting environmental cleanup costs. The district court ruled that the Great American and MSI policies were void in light of Signal’s failure to disclose when it applied for those policies that the dry dock had significantly deteriorated and that repairs recommended by a number of consultants and engineers over several years had not been made. MSI and Signal settled and now Fireman's Fund contends that it may still pursue appeal of the issues relating to the policy issued to Signal by MSI based on the court's decision in Maryland Cas. Co. v. W.R. Grace & Co. The court held that the Great American policy was a marine insurance contract subject to the doctrine of uberrimae fidei and that Signal’s nondisclosure violated its duty under that doctrine, permitting Great American to void the policy. The court also held that MSI’s policy was governed by Mississippi law; that, under that law, Signal materially misrepresented the dry dock’s condition; and that MSI was entitled to void the policy on that basis. Accordingly, the court affirmed the district court's finding that the policies were void. View "Fireman’s Fund Ins. Co. v. Great Am. Ins. Co." on Justia Law
United States Fidelity and Guaranty Co. v. Fendi Adele S.R.L.
After Ashley Reed sold counterfeit Fendi goods to Burlington and others, Fendi filed suit against Ashley Reed. USF&G, Ashley Reed's insurer, filed suit against Fendi and Ashley Reed, seeking a declaration that it owed no duty under the Policies to indemnify Ashley Reed with respect to the first underlying action. Fendi asserted a counterclaim seeking indemnification for the judgment entered against Ashley Reed in the First Action. Burlington was given permission to intervene to seek indemnification under the Policies for the judgment entered against Ashley Reed in the second underlying action. The court agreed with the district court's holding that the basis of Ashley Reedʹs liability ʺwas the sale - not the advertising - of counterfeit Fendi products,ʺ and therefore there was no basis for indemnification under the Policies. Because the losses were not the result of an advertising injury, the court affirmed the judgment. View "United States Fidelity and Guaranty Co. v. Fendi Adele S.R.L." on Justia Law
Am. Psychiatric Ass’n v. Anthem Health Plans, Inc.
Plaintiffs, two individual psychiatrists and three professional associations of psychiatrists, filed suit against defendants, four health‐insurance companies, alleging that the health insurers’ reimbursement practices discriminate against patients with mental health and substance use disorders in violation of the Mental Health Parity and Addition Equity Act of 2008 (MHPAEA), 29 U.S.C. 1185(a), and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461. The court concluded that, because the psychiatrists are not among those expressly authorized to sue, they lack a cause of action under ERISA. The court also concluded that the association plaintiffs lack constitutional standing to pursue their respective ERISA and MHPAEA claims because their members lack standing. Accordingly, the court affirmed the judgment. View "Am. Psychiatric Ass’n v. Anthem Health Plans, Inc." on Justia Law