Axis Reinsurance Co.
v. Geostar Corp. (N.D. Michigan
May 25, 2010)
Reinsurer was ordered to
advance defense costs in a claim involving investor lawsuits over an allegedly
fraudulent investment scheme involving thoroughbred horse breeding. Policyholder has exhausted its primary
carrier and sought to obtain coverage of defense costs from its excess insurer. Specifically, the order held that even though the
excess insurer didn't have to defend the policyholder in the horse breeding
scheme, it still had to advance defense costs for matters covered by the policy
as they accrued. Subsequently, the
policyholder asked the re-insurer to pay $3.2 million in defense costs.
The order required the re-insurer to advance the
defense cost but the re-insurer balked and disputed the meaning of
"undertaking" in the directors and officers liability policy at
issue. Reinsurer requested clarification
of the order and argued that the language of the policy barred coverage but the
judge rejected its argument. Reinsurer then filed the instant appeal.
For a copy of the appeal click here
Jeffrey Kingsley and Sarah Fang
https://www.goldbergsegalla.com/attorneys/Kingsley.html
https://www.goldbergsegalla.com/attorneys/Fang.html