JURY FINDS AMERICAN RE-INSURANCE ACTED IN BAD FAITH AFTER SUMMARY JUDGMENT IS DENIED
On June 19, 2007, we reported on a decision of a district court that refused to imply a follow the fortunes provision into a reinsurance agreement. Based on that finding, American Re, the reinsurer, moved for summary judgment, contending that the contracts at issue unambiguously provided that it was only obligated to pay claims that fell within the scope of the facultative certificate and it was entitled to summary judgment because Plaintiff could not make that showing. The Court disagreed, finding that because the reinsurance agreement provided the reinsured the right to settle claims in some instances, a genuine issue of material fact existed as to whether the underlying claim was covered by the facultative certificate.
Two weeks after this decision, the case went to trial, and a jury found that American Re breached its duty of good faith and fair dealing in refusing to reimburse its reinsured for the amount paid to settle the claim at issue. American Motorists Ins. Co. v. American Re-Insurance Co., Case No. C 05-5202 CW (USDC N.D. Cal. Dec. 4, 2007).
This post written by Lynn Hawkins.
