Anticipated Decision in Heinz Rescission Litigation Upholds Ruling Voiding $25 Million Insurance Policy Due to Misrepresentations in the Application

In a much anticipated decision, the Third Circuit Court of Appeals upheld the rescission of H.J. Heinz Company’s $25 million production contamination insurance policy because Heinz made material misrepresentations concerning previous product contamination claims when it applied for the policy. H.J. Heinz Company v. Starr Surplus Lines Insurance Company, No. 16-1447 (3d Cir. Jan. 11, 2017).

The fact that Heinz’s application misrepresented its history of prior contaminations losses was clear. The insurer’s application asked Heinz to disclose past complaints, recommendations, fines or penalties by …

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Pennsylvania Federal Court Sets Standards for Burden of Proof in Rescission Matter

The ongoing coverage litigation between H.J. Heinz Company and Starr Surplus Lines Insurance Company in the U.S. District Court for the Western District of Pennsylvania has yielded another important decision that is instructive in rescission matters.  As a follow up to our previous report on October 22, 2015 on the court’s order that Starr must produce information from its underwriting files involving other policyholders, the court has now set guidelines for the burden of proof and jury instructions in the $25 million coverage dispute set …

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Pennsylvania Federal Judge Orders an Insurer to Produce Information from Underwriting Files Involving Other Policyholders in a Rescission Dispute

Discovery disputes in insurance coverage litigation frequently concern whether an insurer must produce information about policies issued to other policyholders or other claims against the insurer involving similar policies or circumstances. Policyholders often seek such discovery to compare the insurer’s position in the disputed claim with positions it may have taken in other claims or under other policies. Insurers typically resist such discovery as being irrelevant to issues involving the particular policy or claim at issue in the litigation. A recent decision by the U.S. …

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