Reinsurance Focus

Transport Insurance Company appealed the denial of a motion for a new trial in which a jury found that Transport’s breach of contract and declaratory judgment claims against reinsurers TIG and Seaton were time-barred. Transport asserted on appeal that the trial court’s jury instruction on accrual was erroneous and, further, that the trial court erred in not instructing the jury on equitable estoppel. The California trial court employed the following jury instruction on accrual, which, at Transport’s request, it derived from Second Circuit authority: the claim for breach of reinsurance contract accrued “either when [the reinsurer] definitively denied the claim; or when a reasonable period passed after submission of the final proofs of loss.” Transport argued on appeal that this instruction was contrary to California precedent, which would hold that a cause of action could not accrue before a claim is denied. The appellate court rejected this argument based on the “invited error doctrine” after determining that Transport had advocated for the very standard on accrual that it claimed was error. The appellate court also held that the trial court did not err in failing to instruct the jury on equitable estoppel because there was no evidence in the record indicating that Transport relied on either reinsurer’s conduct in failing to timely bring suit. Transport Ins. Co. v. TIG Ins. Co., No. A 122573 (Cal. Ct. App. Jan. 13, 2012).

This post written by Ben Seessel.

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