SECOND CIRCUIT REVERSES IN FAVOR OF AIG ON FRAUD CLAIMS, FINDING AXA IGNORED “STORM WARNINGS”
The Second Circuit Court reversed a $34.3 million judgment rendered after a jury verdict against AIG on fraudulent inducement claims asserted by AXA arising from reinsurance facilities the parties entered into in or about 1998. While the Court agreed with a district court ruling that AXA’s claims sounded in fraud and not contract, and thus were properly not referable to arbitration, it nonetheless held as a matter of law that AXA failed to prove the claims were timely brought under the two-year discovery prong of the statute of limitations for fraud. The Court found that AXA was on notice of the alleged fraud as early as 1998, when it signed wordings which the Court found clearly indicated the manner in which AIG intended to operate the reinsurance facilities. AXA, despite the “storm warnings” of the wordings, and other indications of AIG’s intentions from 1998 through 2000, failed to bring suit until 2005. Because it found the claims were time-barred, the Court reversed the entry of judgment, and remanded with instructions to enter judgment in favor of AIG. AXA Versicherung AG v. New Hampshire Ins. Co., No. 08-2521 (2d Cir. Aug. 23 2010).
This post written by John Pitblado.
