... Primary and Following Form, Too.
Acosta, Inc. and Acosta Sales, LLC were provided D&O Coverage pursuant to a series of Insurance Policies, both Primary and Excess. National Union Fire Insurance Company's Policy was treated by the Courts in this case as Primary. The National Union Fire Policy contained a "prior litigation" Exclusion which excludes all Loss in connection with a Claim made against the Insured, here, both Acosta corporations. As published by the Florida Appellate Court, that Exclusion reads as follows:
(e) alleging, arising out of, based upon[,] or attributable to as of the Continuity Date [November 1, 2001], any pending or prior: (1) litigation; or (2) administrative or regulatory proceeding or investigation of which an Insured had notice, or alleging any Wrongful Act which is the same or Related Wrongful Act to that alleged in such pending or prior litigation or adminstrative or regulatory proceeding or investigation[.]
Acosta, Inc. v. National Union Fire Ins. Co., Download Acosta, Inc. v. National Union Fire Insurance Co. (Fla. 1st DCA Case No. 1D09.3215, Substituted Opinion on Denial of Rehearing) PUBLIC ACCESS also published as 39 So. 3d 565 (Fla. 1st DCA July 30, 2010)(Westlaw subscription required to access Southern Third via Westlaw; page numbers not provided at time of this post). [Bracketed material except for Continuity Date by the Court; Continuity Date added.]
The Trial Court entered Summary Judgment in favor of National Union Fire under its "prior litigation" Exclusion, based largely upon the following observation:
The policy issued by National Union is a claims made policy. These policies offer coverage for claims filed during the time when the policy is in effect[;] however[,] the exclusions protect the insurers from being "sandbagged" when the insured was aware of pending claims likely to be filed or as a result of prior litigation. [citation omitted].
Id. [Bracketed material again by the First District.]
This is a case of first impression in Florida. The First District affirmed the Trial Court's grant of Partial Summary Judgment to National Union and Summary Judgment to Arrowood in this case, based upon National Union's above-quoted prior litigation Exclusion:
The trial court determined that National Union and Arrowood properly denied coverage under a "prior litigation" exclusion due to the relationship between the underlying suit and a suit brought by Marketing Specialists Sales Co. ("Marketing Specialists") against Acosta in 2001 ("the turnover suit").
Id. The Arrowood D&O Policy was excess and "following form" to the National Union Fire D&O Policy here. Id. n.2. The First District affirmed entirely on the basis of the National Union Fire prior litigation Exclusion. Id.
"Relation of Primary Insurer With Excess Carriers and Reinsurers" is the subject of an entire Chapter in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" Ch. 6 (Second Edition Shepard's/McGraw-Hill; 2010 Supplement West Publishing Company).
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