Insurance Law Alert

June 2021

In This Issue
Florida Supreme Court Rules That Insurer Has Standing To Bring
Malpractice Suit Against Counsel Retained To Represent Insured
The Supreme Court of Florida ruled that an insurer has standing through a contractual
subrogation provision to maintain a malpractice action against counsel hired to represent theinsured where the insurer has a duty to defend. Arch Ins. Co. v. Kubicki Draper, LLP, 2021 WL
2232083 (Fla. June 3, 2021). (Click here for full article)

Small Minority Of Courts Allow COVID-19 Coverage Claims To Proceed
Notwithstanding Virus Exclusions“Skilled inhandling catastrophic
event liability issues andbad faith disputes, and acts
for an enviable client rosterof market-leading insurance
providers.”– Chambers USA
2021

The vast majority of courts have continued to dismiss policyholder suits seeking coverage forbusiness losses incurred during the COVID-19 pandemic and related government shutdowns.
However, a few courts have concluded that the allegations at issue sufficiently allege claims forcoverage. Seifert v. IMT Ins. Co., 2021 WL 2228158 (D. Minn. June 2, 2021); Atwells Realty
Corp. v. Scottsdale Ins. Co., 2021 WL 2396584 (R.I. Super. Ct. June 4, 2021). (Click here forfull article)

Minnesota Court Rejects Policyholder’s Contention That COVID-19 Is A
Covered “Pollution Condition” Under Policy
A Minnesota federal district court dismissed a healthcare provider’s COVID-19-related
coverage suit, finding that the COVID-19 virus is not a “pollution condition” under the policy.
Essentia Health v. ACE American Ins. Co., 2021 WL 2117241 (D. Minn. May 25, 2021).
(Click here for full article)

New Hampshire Court Rules That Pollution Exclusion Bars Coverage
For COVID-19-Related Claims, But That Microorganism Exclusion Is
Ambiguous
A New Hampshire trial court ruled that a pollution exclusion bars coverage for businessinterruption claims arising out of COVID-19-related state orders, but deemed a microorganism
exclusion ambiguous. Schleicher & Stebbins Hotels, LLC v. Starr Surplus Lines Ins. Cos., No.
217-2020-CV-00309 (N.H. Super. Ct. June 15, 2021). (Click here for full article)

New York Appellate Court Rules That Without “Cut Through” Clause,
Original Insured Cannot Bring Suit Directly Against Reinsurers
A New York appellate court affirmed a trial court’s dismissal of claims brought by an original
insured against reinsurers, ruling that the original insured was not entitled to bring direct
suit against the reinsurers because the reinsurance policies did not contain a “cut through”
provision allowing such claims. Wells Fargo Bank, N.A. v. Lloyd’s Syndicate AGM 2488, 144
N.Y.S.3d 590 (N.Y. App. Div. 1st Dep’t June 1, 2021). (Click here for full article)

Simpson Thacher & Bartlett LLP

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New York Court Rules That Insurance Policies Were Properly Assigned To
Successor Company
A New York trial court ruled that an assignment of insurance policies to a successor company
was valid notwithstanding an anti-assignment clause because the liabilities at issue occurredprior to the assignment. Certain Underwriters at Lloyd’s London v. AT&T, Corp., 2021 WL
2003166 (N.Y. Sup. Ct. May 19, 2021). (Click here for full article)

Florida Appellate Court Reverses Ruling Requiring Insurer To Indemnify
Civil Rights Judgment Against Officers
A Florida appellate court ruled that an insurer had no duty to indemnify an underlying civilrights judgment against police officers because the operative occurrence did not happen during
the relevant policy periods. Certain Underwriters at Lloyd’s, London Subscribing to Policy
No. J046137 v. Pierson, 2021 WL 2213291 (Fla. Dist. Ct. App. June 2, 2021). (Click here forfull article)

Eleventh Circuit Rules That “Invasion Of Privacy” Exclusion Bars
Coverage For TCPA Class Action Suit
Applying Florida law, the Eleventh Circuit ruled an “invasion of privacy” exclusion precludes
coverage for claims alleging violations of the Telephone Consumer Protection Act of 1991. Hornv. Liberty Ins. Underwriters, Inc., 2021 WL 2200959 (11th Cir. June 1, 2021). (Click here forfull article)

Fifth Circuit To Rule On Whether Data Breach Was A “Publication” That
Violates A Person’s Right Of Privacy Under Insurance Policy
The Fifth Circuit will rule on whether a credit card data breach constitutes a “publication” thatwould trigger an insurer’s duty to defend a $20 million lawsuit filed by a bank and credit card
processing company. Landry’s Inc. v. Ins. Co. of the State of Pa., No. 19-20430 (5th Cir. OralArg. June 10, 2021). (Click here for full article)

Where Insurer Is “Real Party-In-Interest,” Pro Rata Allocation Of
Asbestos Settlements Is Not Warranted, Says New York Court
A New York trial court declined to allocate underlying asbestos settlements on a pro rata basis,
finding that the insurer, as the “real party-in-interest” after the insured company dissolved, wasresponsible for indemnification of all settlements. Liberty Mutual Ins. Co. v. Jenkins Bros., No.
651980/2018 (N.Y. Sup. Ct. New York Cnty. June 16, 2021). (Click here for full article)

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Standing Alert:
Florida Supreme Court Rules That
Insurer Has Standing To Bring
Malpractice Suit Against Counsel
Retained To Represent Insured
Answering a certified question, the Supreme
Court of Florida ruled that an insurer has
standing through a contractual subrogation
provision to maintain a malpractice action
against counsel hired to represent the insured
where the insurer has a duty to defend. Arch
Ins. Co. v. Kubicki Draper, LLP, 2021 WL
2232083 (Fla. June 3, 2021).
Arch Insurance Company hired counsel todefend its insured in an underlying action.
After the suit settled for policy limits, Arch
sued the law firm for professional negligence,claiming that the law firm’s delay in assertinga statute of limitations defense resulted in
an unnecessarily large settlement. A Florida
trial court granted the law firm’s summary
judgment motion, finding that Arch lacked
standing to sue and that there was no privity
between Arch and the law firm. An appellate
court affirmed, stating: “where nothing
indicates that the law firm was in privity
with the insurer, or that the insurer was
an intended third-party beneficiary of therelationship between the law firm and theinsured, we are unwilling to expand the fieldof privity exceptions to apply to this case.” SeeFeb. 2019 Alert.

This month, the Supreme Court quashedthe appellate decision and ruled that Arch
had standing by virtue of the policy’s
subrogation provision. The provision statedthat Arch “shall be subrogated to all yourrights of recovery therefor against any
person, organization, or entity.” The court
held that this provision included claims forlegal malpractice against counsel retained
to defend the insured. In so ruling, thecourt rejected the law firm’s argument thatpublic policy prohibits assignment of legal
malpractice claims. The court noted thatwhile there is a public interest in preventing
fraudulent claim assignments, that concern
is not implicated here, where “the subrogatedclaim originates by contract from the insured
to the insurer, the same entity who hired thelawyer in the first instance.”
Because the court’s ruling was based on thesubrogation provision, it did not reach theissue of whether an insurer is a third-party
beneficiary of the attorney-client relationshipbetween the law firm and insured.

COVID-19 Alerts:
Small Minority Of Courts Allow
COVID-19 Coverage Claims To
Proceed Notwithstanding Virus
Exclusions
The vast majority of courts have continued todismiss policyholder suits seeking coveragefor business losses incurred during the
COVID-19 pandemic and related government
shutdowns. However, a few courts haveconcluded that the allegations at issue
sufficiently allege claims for coverage.
In Seifert v. IMT Ins. Co., 2021 WL 2228158(D. Minn. June 2, 2021), a Minnesota federal
district court declined to dismiss a salon’s
claim for coverage under a business income
policy provision. The policy covered loss ofbusiness income caused by “direct physicalloss of or damage to property.” The court
reasoned that physical loss “of” property is
distinct from physical loss “to” property andthat the former includes a property owner’s
temporary inability to occupy or use property
as intended. The court concluded that thesalon owner plausibly alleged coverage
under this provision because he claimed that
executive orders aimed to stop the spreadof COVID-19 forced his businesses to close.
However, the court dismissed the salon
owner’s civil authority coverage claims basedon the absence of allegations that any nearby
properties were damaged, as required by
the policy.
In addition, the court ruled that coverage
was not precluded by a virus exclusion,
which applied to damage caused by a3

“virus, bacterium or other microorganism,”“regardless of any other cause or event that
contributes concurrently or in any sequence
to the loss.” The court explained that thesalon owner alleged a “single cause of loss: theexecutive orders.” The court thus concluded
that “the policies’ virus exclusion is intended
to preclude coverage only when there has
been some direct or indirect contamination of
the business premises, not whenever a virus iscirculating in a community and a government
acts to curb its spread by means of executive
orders of general applicability.”

The applicability of a virus exclusion was also
at issue in Atwells Realty Corp. v. Scottsdale
Ins. Co., 2021 WL 2396584 (R.I. Super. Ct.
June 4, 2021). There, a Rhode Island trial
court declined to dismiss a civil authority
coverage claim, finding that issues of fact
existed as to whether the virus exclusion
barred coverage for that claim. The exclusion
applied to “loss or damage caused by or
resulting from any virus . . . that induces
or is capable of inducing physical distress,
illness or disease.” The court reasoned thatcivil authority coverage was not necessarily
precluded by the exclusion because theunderlying complaint alleged that the loss
was caused by executive orders, not thevirus itself, and because the complaint
did not allege the presence of the virus on
insured property.
These rulings stand in contrast to the weightof decisions issued in recent months holdingthat a virus exclusion precludes coveragefor business interruption and civil authority
claims arising out of COVID-19 executive
orders. See, e.g., Spring House Tavern,
Inc. v. American Fire & Cas. Co., 2021 WL
2473939 (E.D. Pa. June 16, 2021); Hartford
Fire Ins. Co. v. Moda, LLC, 2021 WL 2474216(Conn. Super. Ct. June 15, 2021); Soundview
Cinemas, Inc. v. Great American Ins. Grp.,

142 N.Y.S.3d 724 (N.Y. Sup. Ct. 2021). The
Seventh Circuit is poised to rule on this issue
in Mashallah Inc. v. West Bend Mutual Ins.
Co., No. 21-1507 (7th Cir. Oral Arg. June 2,2021).

Minnesota Court Rejects
Policyholder’s Contention That
COVID-19 Is A Covered “Pollution
Condition” Under Policy
A Minnesota federal district court dismisseda healthcare provider’s COVID-19-related
coverage suit, finding that the COVID-19 virus
is not a “pollution condition” under the policy.
Essentia Health v. ACE American Ins. Co.,
2021 WL 2117241 (D. Minn. May 25, 2021).
After state orders required Essentia tosuspend non-essential medical services, thecompany sought insurance coverage for the$59 million it allegedly lost in revenue. The
Premises Pollution Liability Policy covered
loss resulting from “[f]irst-party claims
arising out of . . . 1) a ‘pollution condition’on, at, under or migrating from a ‘covered
location’; [or] 2) an ‘indoor environmental
condition’ at a ‘covered location.’” Essentia
argued that COVID-19 is a pollution condition
because it is a “contaminant” or “irritant.”
ACE denied coverage and, in ensuing
litigation, moved to dismiss the complaint.
The court granted ACE’s motion, ruling thatthe virus was not a “pollution condition”
under the policy. The court noted that while“[i]t may be reasonable . . . to understandthe definition of ‘pollution condition’—inisolation—to encompass viruses,” that
“understanding becomes unreasonable” inlight of other policy provisions. In particular,
the court explained that the policy defined“indoor environmental condition” to include
viruses and bacteria, but specified thatcoverage for such losses was limited to
first-party remediation costs and did notencompass business interruption losses. The
court reasoned that inclusion of “virus” in theindoor environmental definition, but not thepollution condition definition, indicated theparties’ intent to limit coverage for virusrelated losses to first-party remediation costs.
The court declined to consider Essentia’s“reasonable expectation” or estoppel
arguments, noting that where, as here, policy
language is unambiguous, consideration of
extrinsic evidence is not warranted.

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New Hampshire Court Rules That
Pollution Exclusion Bars Coverage
For COVID-19-Related Claims, But
That Microorganism Exclusion Is
Ambiguous
A New Hampshire trial court ruled thata pollution exclusion bars coverage forbusiness interruption claims arising out of
COVID-19-related state orders, but deemeda microorganism exclusion ambiguous.
Schleicher & Stebbins Hotels, LLC v. Starr
Surplus Lines Ins. Cos., No. 217-2020-CV00309 (N.H. Super. Ct. June 15, 2021).
A group of hotels sought a declaration thatthey are entitled to insurance coverage forbusiness losses related to the spread of
COVID-19. Ruling on the parties’ crossmotions for summary judgment, the court
held that a pollution exclusion, defined
to include “bacteria, fungi, mold, mildew,
virus or hazardous substances,” precluded
coverage. The court rejected the hotels’assertion that the exclusion was ambiguous
as to claims arising out of COVID-19 because
the terms “escape,” “release,” “discharge”
and “dispersal” are terms of art that pertain
to environmental waste. The court explainedthat the plain text of the exclusion applies toviruses and that, in any event, COVID-19 is“dispersed” through coughing, talking andother behavior.
However, the court ruled that a microorganism
exclusion that applied to loss arising out ofor relating to “mold, mildew, fungus, sporesor other microorganisms” was ambiguous
as to whether it encompassed a virus. The
court also ruled that allegations of property
contamination by the COVID-19 virus satisfy
the policies’ “loss or damage” or “direct
physical loss of or damage to property”
requirements. In so ruling, the court rejected
the insurers’ contention that loss or damage
to property must be incapable of remediation
or result in dispossession. In concludingthat the spread of COVID-19 to insured
properties satisfied the requisite “distinct
and demonstrable change” standard under
New Hampshire law, the court reasoned that“property contaminated with SARS-CoV-2 is‘distinct’ from uncontaminated property” andthat infection of property is “‘demonstrable’
through a series of means, including
laboratory testing.”

Reinsurance Alert:
New York Appellate Court Rules
That Without “Cut Through”
Clause, Original Insured Cannot
Bring Suit Directly Against
Reinsurers
A New York appellate court affirmed a trial
court’s dismissal of claims brought by an
original insured against reinsurers. Wells
Fargo Bank, N.A. v. Lloyd’s Syndicate AGM
2488, 144 N.Y.S.3d 590 (N.Y. App. Div. 1st
Dep’t June 1, 2021). The appellate court heldthat the original insured was not entitledto bring direct suit against the reinsurers
because the reinsurance policies did notcontain a “cut through” provision allowing
such claims. The appellate court stated that“the motion court correctly decided thatplaintiff did not have standing because its
interpretation of the contract would lead toan absurd result and is contrary to the parties’
reasonable expectations.”
The decision in Wells Fargo reflects the wellestablished legal principle that a reinsurance
agreement is a contract of indemnity between
a ceding insurer and a reinsurer, and does
not create privity of contract between theoriginal insured and the reinsurer. Courts
have recognized an exception to this generalrule where the reinsurance contract includes
an express “cut through” provision granting
the original insured a direct right of action
against the reinsurer. However, case law inthis context indicates that specific and clear
wording is required in such clauses in order tobe valid and enforceable. See Jurupa Valley
Spectrum, LLC v. National Indem. Co., 555
F.3d 87 (2d Cir. 2009).

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Assignment Alert:
New York Court Rules That
Insurance Policies Were Properly
Assigned To Successor Company
A New York trial court ruled that anassignment of insurance policies to a
successor company was valid notwithstandingan anti-assignment clause because theliabilities at issue occurred prior to theassignment. Certain Underwriters at Lloyd’s
London v. AT&T, Corp., 2021 WL 2003166(N.Y. Sup. Ct. May 19, 2021).
In 1996, AT&T executed a Separation
and Distribution Agreement (“SDA”) that
divided the company into three separatebusinesses, one of which is currently known
as Nokia. When Nokia was sued in asbestosrelated lawsuits allegedly arising out of theoperations of AT&T, Nokia sought coverage
under policies issued to AT&T prior to thetransaction. Nokia argued that it was assigned
the right to coverage under those policies
in the SDA. The court agreed and granted
Nokia’s summary judgment motion.
The SDA assigned AT&T’s “assets” to Nokia,
defined to include “all rights under insurance
policies and all rights in the nature of
insurance, indemnification or contribution.”
The court ruled that this provision evidenced
the parties’ intention to give Nokia the rightto avail itself of coverage under the policies
for liabilities assumed from AT&T as part of
the transaction.
The court rejected the insurers’ contention
that an anti-assignment clause in thepolicies precluded assignment of the policies
without the insurers’ consent. Although
New York follows the majority rule that an
anti-assignment provision is not valid as totransfers that are made after the insuredagainst loss occurs, the insurers argued thatthe assignment was nonetheless invalid
because Nokia had not demonstrated that any
covered losses occurred prior to the SDA’s
assignment of insurance rights. Rejecting
this argument, the court emphasized that any
loss for which Nokia would seek coverage
necessarily preceded the assignment because
the policies only covered “occurrences” during
the policy periods, and all policies expired
prior to the SDA.

The court acknowledged that in someinstances, an anti-assignment clause may
bar pre-assignment claims, but concluded
that such circumstances were not presented
here. In particular, the court rejected theinsurers’ assertion that a post-loss assignment
would “unduly increase the risk borne by
the insurer[s]” because the insurers would
be responsible for the defense costs of both
AT&T and Nokia. The court stated that “[t]heprospect of incurring additional defense
costs . . . is not the kind of increase[d] riskthat compels enforcement of an otherwise
ineffective anti-assignment clause.”

Coverage Alert:
Florida Appellate Court Reverses
Ruling Requiring Insurer To
Indemnify Civil Rights Judgment
Against Officers
A Florida appellate court ruled that an insurer
had no duty to indemnify an underlying
civil rights judgment against police officers
because the operative occurrence did not
happen during the relevant policy periods.
Certain Underwriters at Lloyd’s, London
Subscribing to Policy No. J046137 v. Pierson,
2021 WL 2213291 (Fla. Dist. Ct. App. June2, 2021).
Two police officers were found liable
for misconduct in a suit brought by awrongfully incarcerated man. The officers
sued their insurers for failing to indemnify
the $7 million judgment. Although theofficers’ misconduct in obtaining a forced
confession occurred prior to the inceptionof the first policy period, the officers argued
that coverage was available pursuant to apolicy provision covering “damage direct
or consequential . . . on account of personal
injury . . . suffered or alleged to have been
suffered by any person(s) . . . arising out of
any occurrence . . . happening during theperiod of insurance.” A Florida trial court
agreed and ruled in the officers’ favor. The
trial court held that coverage under thepolicies was triggered because the claimant’s
damages (i.e., his wrongful incarceration)
extended into the policy periods, even though
the policies were not in effect when theofficers’ misconduct occurred.

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The appellate court reversed, ruling thatcoverage was not available because theofficers’ misconduct did not occur during thepolicy periods. The court stated: “the fact that[the claimant] suffered the consequences of
the Officers’ wrongful conduct throughout
his incarceration, including while the subject
policies were in effect, is irrelevant for
purposes of determining whether the Insurer
has a duty to indemnify.” The court also
deemed irrelevant the fact that the claimant
was ultimately exonerated during thepolicy period.
By contrast, in a case presenting different
policy language (“injury or damage
that . . . happens while this agreement isin effect” or “an event . . . which results inpersonal injury, bodily injury or property
damage sustained, during the policy period”),
the Fifth Circuit ruled that insurers were
obligated to defend a municipality in a civilrights suit arising out of coerced confessions
and fabricated evidence, notwithstandingthat the arrests and convictions occurred
before the relevant policies incepted. See June2019 Alert.

Right To
Privacy Alerts:
Eleventh Circuit Rules That
“Invasion Of Privacy” Exclusion
Bars Coverage For TCPA Class
Action Suit
Applying Florida law, the Eleventh Circuit
ruled an “invasion of privacy” exclusion
precludes coverage for claims alleging
violations of the Telephone Consumer
Protection Act of 1991 (“TCPA”). Horn v.
Liberty Ins. Underwriters, Inc., 2021 WL
2200959 (11th Cir. June 1, 2021).
A class of consumers sued iCan Benefit
Group, alleging that the company invaded
their privacy by sending unsolicited text
messages to their cellphones without theirconsent, in violation of the TCPA. Liberty
refused to defend the suit on the basis of apolicy exclusion that applied to loss “arisingout of . . . invasion of privacy.” Thereafter,
the underlying suit settled for approximately$60 million. The settlement amount was notallocated between “actual” versus “statutory”

damages, or between harms that arose frominvasion of privacy as opposed to nuisance,
annoyance or property damage.
A Florida federal district court granted
Liberty’s summary judgment motion, rulingthat the invasion of privacy exclusion barred
coverage for the entire underlying action.
Alternatively, the court ruled that even if only
some of the settled losses were precludedby the exclusion, iCan’s failure to allocate
the underlying settlement into covered anduncovered losses precluded recovery for any
covered loss. The Eleventh Circuit affirmed.

Plaintiffs argued that the exclusion was
ambiguous because (1) it listed several
common law tort causes of action, but not
statutory causes of action, such as the TCPA,
and (2) a different exclusion in the policy
listed several federal statutes, but not the
TCPA. The court rejected both assertions.
First, the court explained that “arising outof” is interpreted broadly under Florida law
to mean “originating from” or “having aconnection with.” As such, the court declined
to limit the exclusion to common law invasionof privacy tort claims. Second, the court
deemed the language in the other policy
exclusion irrelevant, stating that “neither
party has argued this other exclusion applies,”and “we are not persuaded by an argument
that, because one exclusion does not apply,
another applicable exclusion is somehow
rendered ambiguous.”
As discussed in our September 2017 Alert,
the Ninth Circuit similarly ruled that aninvasion of privacy exclusion barred coveragefor statutory TCPA claims. L.A. Lakers, Inc.
v. Fed. Ins. Co., 869 F.3d 795 (9th Cir. 2017).
In that case, the court ruled that “a TCPA
claim is, by its nature, an invasion of privacy
claim.” Here, the Eleventh Circuit declined
to address whether TCPA claims are per se7

invasion of privacy claims, and instead based
its ruling on “the broad qualifying language”
in the exclusion.

Fifth Circuit To Rule On Whether
Data Breach Was A “Publication”
That Violates A Person’s Right Of
Privacy Under Insurance Policy
The Fifth Circuit will rule on whether a credit
card data breach constitutes a “publication”
that would trigger an insurer’s duty to defend
a $20 million lawsuit filed by a bank andcredit card processing company. Landry’s Inc.
v. Ins. Co. of the State of Pa., No. 19-20430(5th Cir. Oral Arg. June 10, 2021).
The policyholder sought coverage forassessments imposed in connection with adata breach that compromised the personal
data of millions of credit card holders.
The insurer denied coverage, arguing that“personal and advertising injury” coverage
was unavailable because there was no“publication” of material that violates aperson’s right of privacy, as required by thepolicy.

A Texas federal district court agreed anddismissed the suit against the insurer.
Landry’s, Inc. v. Ins. Co. of the State of Pa.,
2019 WL 3080917 (S.D. Tex. May 23, 2019).
The court reasoned that the accessing ofdata by a hacker, without more, does notconstitute a “publication.” In addition, thecourt explained that the damages sought
were not “privacy” damages because thesuit against the policyholder was brought bya bank and processing company based on
the policyholder’s alleged failure to follow
industry cybersecurity standards, rather
than consumers whose personal data was
improperly obtained.

This month, the Fifth Circuit heard oral
argument relating to whether the hackers’ actof accessing the private consumer data was
a “publication.” We will keep you posted on
developments in this matter.

Allocation Alert:
Where Insurer Is “Real PartyIn-Interest,” Pro Rata Allocation
Of Asbestos Settlements Is Not
Warranted, Says New York Court
A New York trial court declined to allocate
underlying asbestos settlements on a pro rata
basis, finding that the insurer, as the “realparty-in-interest” after the insured company
dissolved, was responsible for indemnificationof all settlements. Liberty Mutual Ins. Co. v.
Jenkins Bros., No. 651980/2018 (N.Y. Sup.
Ct. New York Cnty. June 16, 2021).
Jenkins Bros., a company that manufactured
asbestos-containing products, filed forbankruptcy in 1989 and was dissolved in
2004. Thereafter, when underlying claimants
brought suit against Jenkins Bros., Liberty
Mutual was ordered to accept service on thecompany’s behalf and was declared the “realparty-in-interest.” Liberty initially funded
100% of the settlements it negotiated onbehalf of Jenkins Bros. However, in 2014,
Liberty took the position that it was not
responsible for indemnifying payments
allocated to “orphan share” periods—periods
in which Liberty’s policies did not cover theunderlying claims.
The court ruled that under the “unique facts
and circumstances of this case,” Liberty,
as the real party-in-interest, was obligatedto fund all settlements, including those
allocated to orphan share periods. The court
rejected Liberty’s assertion that it was thereal party-in-interest solely for the purposeof service of process, emphasizing that
Liberty’s prior conduct in negotiating all
settlements evidenced its understanding thatit “stood in the shoes of . . . Jenkins Bros.,in all relevant and meaningful ways.” Thecourt also observed that “pro rata allocation
is not appropriate where, as is the case here,
the allocation . . . is between the insurer andthe tort victims,” rather than the insurer andpolicyholder.

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Simpson Thacher has been an international leader in the practice of insurance and reinsurance law for
more than a quarter of a century. Our insurance litigation team practices worldwide.

Mary Beth Forshaw+1-212-455-2846
mforshaw@stblaw.com

Michael J. Garvey+1-212-455-7358
mgarvey@stblaw.com

Joshua Polster+1-212-455-2266
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Andrew T. Frankel+1-212-455-3073
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irethy@stblaw.com

Bryce L. Friedman+1-212-455-2235
bfriedman@stblaw.com

Susannah S. Geltman+1-212-455-2762
sgeltman@stblaw.com

This edition of the Insurance Law
Alert was prepared byBryce L. Friedman /+1-212-455-2235
bfriedman@stblaw.com and
Joshua Polster /+1-212-455-2266
joshua.polster@stblaw.com
with contributions by Karen Cestarikcestari@stblaw.com.

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