Court Says Umbrella Insurer Has No Duty to Settle When Primary Insurer Controls Defense
August 2011 | Category: Recent SuccessesKevin Fox v. Will County State’s Atty. (N.D. Ill. 2011)
BatesCarey LLP's client issued an excess policy to an insured county, which was sued, along with two sheriff deputies, for civil rights violations by a man falsely accused of murder. The primary insurer paid for the county's and deputies' defense, which resulted in an uncovered multi-million dollar punitive damage award. The insured's assignee argued that the excess insurer had failed in bad faith to accept a settlement offer and was required to pay the punitive damage award. BatesCarey LLP argued that the excess insurer did not control the defense and thus could not have breached any duty to settle. An Illinois federal court adopted BatesCarey LLP's reasoning on summary judgment and held that the excess insurer was not obligated to pay the punitive damage award.
Court Agrees that “Follow the Fortunes” Does Not Require Payment of Additional Expenses
May 2011 | Category: Recent SuccessesPacific Emp. Ins. Co. v. GLOBAL Reinsurance Corp. (E.D. Pa. 2011)
BatesCarey LLP obtained judgment for its reinsurer client by convincing a federal court that the "follow the fortunes" doctrine did not require the reinsurer to pay expenses in addition to the limits of liability on a facultative certificate. By moving for judgment on the pleadings, BatesCarey LLP foreclosed the cedent from taking any discovery and obtained victory immediately after the cedent filed its responsive pleading.
Court Agrees that “Follow the Fortunes” Does Not Expand Coverage of Reins Contract
October 2010 | Category: Recent SuccessesArrowood Surplus Liurancenes Ins. Co. v. Westport (D. Conn. 2010) (January 2010), aff’d (2d Cir. 2010)
The cedent sought reinsurance for $6.7 million for claims that arose from occurences taking place after the termination of the reinsurance contract. The cedent argued that the "follow the fortunes" doctrine bound the reinsurer to pay any claims under a reinsurance policy, regardless of the reinsurance contract limitations. The district and appellate courts, however, fully agreed with BatesCarey LLP's argument that the client reinsurer had only agreed to cover risks insured by the cedent during the time limits of the reinsurance contract.
