In what may be a preview of some Claims resulting from the BP Oil Spill Catastrophe, a Federal Court in Washington State has denied a Motion for Summary Judgment on an Affirmative Defense based on a Concealment and Misrepresentation provision in the Insurance Policy at issue, in Goodman v. New Hampshire Insurance Co., Download Goodman v. New Hampshire Insurance Co. (W.D. Wash. Case No. 2.2009.1493, Order Filed July 22, 2010) FREE ACCESS also published as 2010 WL 2871186 (W.D. Wash. July 22, 2010)(Westlaw subscription required to access Westlaw).
"This case arises from a diesel fuel leak aboard plaintiff's yacht, the Conundrum, which is insured by defendant New Hampshire Insurance Company ("New Hampshire")." A leaking starboard (right-hand side) fuel tank triggered the yacht's "automatic bilge pumps which pumped the diesel fuel overboard into the water." Goodman v. New Hampshire Insurance Co., 2010 WL 2871186 at *1.
The plaintiff-Insured paid cleanup costs for the oil spill. He then sought Coverage for all his repair losses including the costs of replacing both fuel tanks, and rebuilding and replacing the boat's superstructure, cockpit, and deck, from New Hampshire. "When defendant declined to pay the amount requested to reimburse plaintiff for his loss, plaintiff filed this action for breach of contract, bad faith, and violation of the Washington Consumer Protection Act." Id.
As a matter of alleged fact, New Hampshire contended "that the invoices submitted by plaintiff include work on the boat that was not directly related to repairing the fuel tank and fuel leak damage, as well as items that are expressly excluded from coverage under the policy." Id.
The New Hampshire Insurance Policy contains a Paragraph numbered 10 under "GENERAL CONDITIONS AND EXCLUSIONS," which reads in full as follows:
10. CONCEALMENT OR MISREPRESENTATION: Any relevant coverage[s] shall be voided if you intentionally conceal or misrepresent any material fact or circumstance relating to this insurance, or your insurance application, whether before or after a loss.
Id. at *3. {Boldface in original.] New Hampshire raised this provision in an Affirmative Defense that all relevant coverages were voided "by plaintiff's 'intentional concealment and/or misrepresentation.'" Id.
On the record of this case and in the eyes of the Court, there were genuine issues of material fact which prevented Summary Judgment for the Plaintiff-Insured on this Affirmative Defense. "Whether he [the plaintiff-Insured] intentionally misrepresented any claimed amounts is a question of fact for the jury. Plaintiff's motion for summary judgment on this affirmative defense is accordingly DENIED." Id. at *4. [Emphasis added.]
It is reasonable to anticipate that there will be more than one Claim to Coverage resulting from the BP Oil Spill Catastrophe which may involve alleged 'concealment or misrepresentation of any claimed amounts,' as well. The Goodman v. New Hampshire Insurance Company decision may offer a preview, for some cases, of what is to come in that regard.
Dennis Wall is Co-Author of the leading book on Insurance Coverage for Catastrophe Claims, "CATClaims: Insurance Coverage for Natural and Man-Made Disasters" (West Publishing Company 2008; 2010 Supplement in process). Mr. Wall will speak on a panel at the American Conference Institute's Bad Faith Litigation Conference in Orlando, Florida on November 30, 2010 on "Dealing With Catastrophic Disasters: How to Properly Investigate and Handle Overwhelming Claims".
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Posted by: California Casualty | August 13, 2010 at 01:30 PM