Valverde, Eagle and Korman Secure Appellate Decision

October 23, 2018 | Appeals | Insurance Coverage

The Appellate Division, First Department sided with our position in a contentious appeal over a hotly debated aspect of insurance law.

In Indian Harbor Ins. Co. v. Alma Tower, LLC, et. al., the lower court held that Indian Harbor must defend Alma and Vordonia as additional insureds and reimburse more than $160,000 in defense costs to our client, Crum & Forster, because the allegations of the complaint and facts known to Indian Harbor gave rise to the reasonable possibility that the claimant’s injury was proximately caused by S&S, Indian Harbor’s named insured.

In reaching this decision, we convinced the Court to reject Indian Harbor’s argument that that the Court of Appeals’ decision in Burlington Ins. Co. v. NYC Tr. Auth., 29 NY3d 313 (2017) required a determination of proximate cause against S&S before the duty to defend may be triggered. On appeal, the First Department affirmed the lower court’s order and held that the “reasonable possibility” that Indian Harbor’s named insured, S&S, proximately caused the injury was sufficient to trigger Indian Harbor’s duty to defend, and that the Court of Appeals’ decision in Burlington, and the First Department’s later decision in Hanover Ins. Co. v. Philadelphia Indem. Ins. Co., 159 AD3d 587 (1st Dep’t 2019), were not applicable because of the possibility of coverage. The court also affirmed the lower court’s order denying Indian Harbor’s cross-motion for a stay.

The appeal was argued by Frank Valverde.

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