AFTER ORDER CONFUSED INSURANCE FOR REINSURANCE, COURT RE-ENTERS SUMMARY JUDGMENT BASED ON FAILURE TO NOTIFY INSURER OF CLAIM
On March 16, 2011, we reported on a summary judgment finding Lexington Insurance Company not responsible for a $28 million claim arising under a Lexington medical malpractice insurance policy issued to United Healthcare. While the decision was based on United’s failure to comply with notice provisions in the underlying policy and the resulting prejudice to Lexington, United sought reconsideration on the grounds that the court’s opinion erroneously described the policy as reinsurance, instead of insurance. United argued that an insured should be afforded more protection against the forfeiture of benefits than a reinsured. The court has now issued an amended opinion that corrects its description of the relationship between the parties, but stands by its original conclusions. The court refused to apply rules of contract interpretation that compel a court to construe an insurance policy in favor of an insured because “United is not an innocent consumer but rather a sophisticated insurance company who negotiated, and indeed drafted, the terms of their policy.” Lexington Insurance Co. v. United Health Group, Inc., Case No.09-10504 (USDC D. Mass. April 18, 2011).
This post written by Michael Wolgin.
