Macy v. Carolina Cas. Ins. Co.
(2nd Cir. (Conn.) June 30, 2010)
This dispute hinged on the sordid corporate history of Community Research Associates, a homeland security consulting firm. The underlying dispute alleged that a merger with CRA Acquisitions left “legacy shareholders” without any interests in the new company. The “legacy shareholders” alleged the board of directors breached their fiduciary duty. The claim was settled for $3Million prompting the instant action against Carolina Casualty Insurance Company.
The District Court ruled that the “insured vs. insured” provision applied to bar coverage. The Second Circuit disagreed and held that it was unclear whether CRA was the same entity before and after the merger and remanded the matter back to the trial for further consideration. While the Second Circuit held the insured vs. insured provision was ambiguous it did not construe coverage against the insurer but instead held it was necessary to consider parole evidence.
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Brian Biggie and Rick Cohen