COUNTERCLAIMS ALLEGING FRAUD BY UNLICENSED INSURERS DISMISSED
A motion to dismiss counterclaims alleging that a property and casualty insurer and reinsurer (collectively, “Everest”) fraudulently conspired to engage in insurance business without the appropriate regulatory approval has been granted. In the primary action, Everest had asserted claims against a group of guarantors for breach of their guaranty obligations. Everest moved for partial summary judgment seeking an order that the guarantors were required to post security in an arbitration, which the court granted. The guarantors filed counterclaims for civil conspiracy, fraud, and negligent misrepresentations, among others. The conspiracy claim was predicated on a violation of state insurance licensing regulations, for which no private right of action existed. The misrepresentation claims asserted that Everest falsely stated that it was validly licensed to write a particular line of insurance, but the claims were barred by the statute of limitations. The court applied a choice-of-law analysis, determining that Colorado limitations periods applied to the parties’ transaction. The court also granted Everest’s motion to strike certain affirmative defenses, holding that the defenses had not been raised at the time of the motion for partial summary judgment, and so had been waived. Everest National Insurance Co. v. Sutton, Case No. 07-722 JAP (USDC D.N.J. Oct. 14, 2009).
This post written by Brian Perryman.
