May 22, 2014
London Fischer’s insurance and reinsurance team, which offers a broad range of services for insurers in relation to coverage claims and disputes, including declaratory judgment actions and arbitrations, has had a number of recent successes in these areas.
Through the efforts of partners Perry Kreidman and Spiro Bantis and associate Tom Miller on behalf of our client, an excess insurer, we successfully joined forces with other primary and excess insurers in obtaining pre-answer dismissal of a declaratory judgment complaint brought by one of the largest global private equity firms. The insured requested coverage for claims relating to the multi-billion dollar collapse of a subsidiary who, before the economic downturn, invested heavily in mortgage-backed securities. The insureds’ D.J. complaint sought $150 million in potential insurance coverage from its sixteen insurers for claims alleging misrepresentation and mismanagement of its defunct and insolvent offshore mortgage-backed investment fund. In close collaboration with the insurer defense group, we represented one of sixteen excess insurers in a successful motion to dismiss the complaint. The Court agreed that the allegations of alleged corporate, financial, and management misconduct by various insureds were expressly barred by the broad and extensive “Professional Services” exclusion in the policies. The Court rejected the insureds’ effort to narrowly limit the exclusion to more traditional legal and accounting malpractice type professional claims, finding that the lengthy exclusionary endorsement explicitly encompassed the full range of corporate activities pled against the insureds.
In a case involving excess workers compensation coverage for a municipality, we prevailed in an arbitration on behalf of the excess insurer / reinsurer. The municipality had handled and paid the underlying workers compensation claim for more than 10 years, but doing so without advising the insurer about the ongoing developments in the case or seeking its participation and consent to the payment of substantial disability benefits to the employee. The arbitrator accepted the insurer’s defense that it was not required to reimburse the benefits incurred by the municipality, which had made no effort to apprise the insurer of the status of the case and was in material breach of its contractual obligations under its policy.
In a reinsurance dispute involving multiple asbestos losses, the reinsurer represented by London Fischer was granted summary judgment based on the defense that it was not liable for defense costs in excess of the limits of its reinsurance agreement. Having already reimbursed the reinsured up to the full limits of its coverage in relation to the asbestos losses, our client successfully persuaded the court that its limits could not be exceeded by any additional losses or defense costs. In essence, the court upheld the insurer’s defense based upon the well known Bellefonte principle under which a reinsurer’s limit of liability is fully enforced so that it does not have to pay any amounts for loss, defense costs, or otherwise above those limits.