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Insurance companies fail to show they were harmed by untimely notice

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The 7th Circuit Court of Appeals ruled a District Court judge from Evansville should not have excused two insurance companies from covering a $13.5 million award solely because the companies were notified of the award after the trial.

In National Union Fire Insurance Company of Pittsburgh, Pa. and Lexington Insurance Company v. Mead Johnson & Company LLC, et al., Nos. 12-3478 and 13-1526, the 7th Circuit Court of Appeals reversed a summary judgment in favor of the insurers and remanded for further proceedings.

The case originated from the U.S. District Court for the Southern District of Indiana, Evansville Division.

The 7th Circuit ruled that although Mead Johnson did not tell the insurance companies of the false advertisement lawsuit until after it lost at trial, the insurers have to show they were harmed in order to disclaim coverage.

National Union, the court held, did not explain how it could have garnered a better outcome if it has been notified earlier of the suit. The insurer would have employed the same law firm and attorneys that Mead chose.

Lexington could have presented evidence or argued that with earlier notification it could have convinced the jury to award the plaintiff, PBM Products LLC, less. However, the court noted, the insurers’ joint brief makes almost no mention of Lexington and, instead, assumes that, like National Union, it would have enlisted the same law firm and used the same litigation tactics that resulted in the $13.5 million judgment.  

The 7th Circuit asserted District Judge Richard Young, in finding the insurances companies were harmed, was misled by two decisions from the Indiana Court of Appeals. However, the Circuit Court noted the Indiana Supreme Court has held that if the insured has inflicted no cost on the insurance company by untimely notice, then the insurance company cannot reject the claim.

“To be consistent with Indiana law, the district judge should have said that the later the notice the harder it is for the insured to rebut the presumption that the insurer was harmed by being deprived of the opportunity to control the defense,” Judge Richard Posner wrote. “It’s because that’s a rough row for the insured to hoe that a trial is necessary to determine whether the lateness of the notice in this case was indeed harmless, as it appears to have been on the present, limited record.”

 

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  1. wow is this a bunch of bs! i know the facts!

  2. MCBA .... time for a new release about your entire membership (or is it just the alter ego) being "saddened and disappointed" in the failure to lynch a police officer protecting himself in the line of duty. But this time against Eric Holder and the Federal Bureau of Investigation: "WASHINGTON — Justice Department lawyers will recommend that no civil rights charges be brought against the police officer who fatally shot an unarmed teenager in Ferguson, Mo., after an F.B.I. investigation found no evidence to support charges, law enforcement officials said Wednesday." http://www.nytimes.com/2015/01/22/us/justice-department-ferguson-civil-rights-darren-wilson.html?ref=us&_r=0

  3. Dr wail asfour lives 3 hours from the hospital,where if he gets an emergency at least he needs three hours,while even if he is on call he should be in a location where it gives him max 10 minutes to be beside the patient,they get paid double on their on call days ,where look how they handle it,so if the death of the patient occurs on weekend and these doctors still repeat same pattern such issue should be raised,they should be closer to the patient.on other hand if all the death occured on the absence of the Dr and the nurses handle it,the nurses should get trained how to function appearntly they not that good,if the Dr lives 3 hours far from the hospital on his call days he should sleep in the hospital

  4. It's a capital offense...one for you Latin scholars..

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