Second Circuit Remands $34 Million Jury Verdict Against Reinsurer Back to Lower Court to Address Which Claims Should Be Arbitrated

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AXA Versicherung AG v. New Hampshire Insurance Co.

(2nd Cir. [NY] October 14, 2009)


An action was filed against a reinsurer relating to two reinsurance contracts.  The plaintiff alleged that the reinsurer misrepresented or failed to disclose certain material facts in connection with the negotiation of these contracts and sued for intentional misrepresentation, negligent misrepresentation, material nondisclosure, and breach of the duty of utmost good faith.  After an arbitration proceeding was stayed, the matter was tried before a jury in the District Court for the Southern District of New York and the reinsurer was found liable for more than 34 million dollars, including punitive damages of 5.7 million.

On appeal to the Second Circuit Court, the reinsurer argued that the claims should have been arbitrated pursuant to the agreements because they sound in contract rather than fraud.  The Second Circuit held that the District Court failed to give this argument sufficient consideration and remanded the matter back to the lower court to address which allegations sound in contract as opposed to fraud and should have been arbitrated.


For a copy of the decision, click here


by Bryan Richmond and Jeffrey Kingsley