Eagle and Valverde Secure Significant Summary Judgment Victory for Firm Insurance Client

Alan Eagle (retired) and Frank Valverde recently secured an important summary judgment victory in a hotly contested declaratory judgment action in the Southern District of New York. The dispute was among multiple insurers and concerned insurance coverage for an underlying Labor Law action where a worker sustained grave injuries (quadriplegia) after falling from a ladder. Our winning summary judgment motion involved many cutting-edge issues, including with respect to late notice/prejudice, additional insured coverage, priority of coverage, the doctrine of circuity of the action, and estoppel and also involved issues concerning contractual indemnity, employer’s liability coverage, and real property.

In the 46-page decision (attached), the Court held that a 3.5-year delay in notice of the accident and suit to our client was untimely and resulted in a presumption of prejudice (and actual prejudice), preventing our client from asserting indemnity claims, moving for summary judgment, exploring settlement opportunities, and assigning independent counsel.

The Court also held that our adversary had to pay first towards a $21 million judgment under two policies with $16 million in coverage based upon contractual indemnity principles. Because another insurer paid the remaining $5 million, our client was not obligated to pay anything under its $1 million policy.

Finally, the Court held that our adversary was estopped from denying additional insured coverage to our client’s insured because defense and indemnity was provided without reservation for more than four years before our adversary disclaimed coverage. It could not perform a “volte face” after the litigation posture could no longer be changed. Click here to view the decision.