INSURER THAT FILED JOINT COMPLAINT WITH FORMER AFFILIATE AGAINST REINSURER CANNOT SEVER ITS CLAIMS
Seaton Insurance Company and Stonewall Insurance Company jointly filed a lawsuit against Clearwater Insurance Company asserting breach of contract claims based on Clearwater’s alleged failure to comply with the terms of certain facultative reinsurance certificates issued to the insurers in the 1970s. Seaton moved to sever its claims from Stonewall’s or for a separate trial. Seaton argued that, at the time the lawsuit was filed, Seaton and Stonewall were commonly owned and managed but had since parted ways and, furthermore, that the insurers’ claims were being brought under different reinsurance certificates reinsuring entirely different underlying policies. The federal district court denied Seaton’s request, holding that severing the claims or permitting a separate trial would not simplify or streamline the proceedings. Seaton Insurance Co. v. Clearwater Insurance Co., Case No. 09-516 (USDC D.R.I. Feb. 2, 2012).
This post written by Ben Seessel.
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