Court Sanctions Zurich and law firms in September 11 coverage case
In a 35 page opinion, a district court judge has entered an Order imposing $1.25 million in sanctions, jointly and severally, upon Zurich American Insurance Company and two law firms, Wiley Rein and Coughlin Duffy, for concealing a 62 page insurance policy that was relevant to insurance coverage for the World Trace Center Towers in the September 11th insurance coverage cases. Although the policy was created after the insurance binders at issue, the court found that “it shows Zurich's knowledge and intent, and how Zurich's customary forms gave meaning to the terms of the policy binder.” A portion of the sanctions, in the amount of $750,000, were imposed pursuant to Fed. R. Civ. Pro. 11, while the remaining $500,000 was imposed as a discovery sanction pursuant to Rule 37, awarding $250,000 in attorneys' fees to each of two Plaintiffs in the actions “to defray the costs they unreasonably incurred in the wasted discovery proceedings.” The result was a total sanctions award of $1.25 million. In re September 11th Liability Insurance Coverage Cases, Case No. 03-332 (USDC SD NY June 18, 2007).
