National Union Fire Ins. Co. v. Vicino Drywall (S.D. Florida, November 29, 2010)
On Monday, November 29, 2010, Judge Alan Gold of the U.S. District Court for the Southern District of Florida, issued an order dismissing a suit brought by an insurer that asked the court to declare the insurer has no duty to defend or indemnify defendant policyholder and two other companies in 17 lawsuits over allegedly defective Chinese drywall.
Plaintiff insurer issued three umbrella insurance policies, which provided excess coverage, to the defendants. Although the defendants had not sought payment or reimbursement from the insurer for defense costs in the underlying claims, plaintiff insurer argues that the controversy is ripe for consideration because of the number of suits against the defendants and the substantial judgments in other drywall cases; therefore, making it very likely that the excess coverage will be triggered.
The federal court concluded that the action did not qualify as a proper case or controversy because plaintiff insurer does not cite any case law which would authorize the court to exercise jurisdiction over the dispute based on judgments in separate actions against separate parties. Furthermore, at this juncture, the parties' liabilities "are merely contingent and may never materialize."
For a copy of the decision click here
Sarah Fang and Jeffrey Kingsley