SECOND CIRCUIT FINDS NO DIRECT ACTION RIGHT AGAINST REINSURER
The Second Circuit handed down a summary order affirming the dismissal of Callon Petroleum’s complaint in a reinsurance dispute against National Indemnity. The court found that because the reinsurance agreement made clear that third parties had no rights under the agreement, Callon did not have a right of action against National Indemnity. Thus, this case did not qualify for New York state’s exception (in cases where the agreement contains a “cut through” provision) to the general rule that, as contracts of indemnity, reinsurance agreements give the original assured no right of action against the reinsurer. The court also affirmed the denial of Callon’s request to amend its complaint. Callon Petroleum Co. v. National Indemnity Co., No. 11-241 (2d Cir. July 3, 2012).
This post written by John Black.
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