Opinion ID: 76601
Heading Depth: 4
Heading Rank: 3

Heading: April 2001 Letter

Text: 35 We finally consider Mimi Anderson's April 19, 2001 letter to the Hendersons' attorney. In Anderson's letter, MSC abandoned the two reasons given by Atwood for denying coverage. 6 Rather, Anderson based the denial of coverage on (1) the known loss rule, (2) the fact that the claims asserted by the Hendersons' Neighbors did not qualify as an occurrence under the policy, and (3) the misstatement about involvement in prior litigation in the application. With regard to this letter, we agree with the district court that MSC properly investigated the Hendersons' claim before denying coverage. 36 Prior to writing her letter, Anderson submitted the Hendersons' claim to outside counsel for further investigation and review. She also reviewed all of the previously discussed information and correspondence. In particular, with regard to MSC's denial based on the misstatement about prior litigation in the application, Anderson conducted a proper investigation. Anderson, unlike Atwood, was able to consider the Hendersons' version of the facts regarding the misstatement in the application. The Hendersons' version of the facts regarding the misstatement was in their lawyer's letter of February 22, 2001, which Anderson was able to review. Anderson was under no further obligation to interview the Hendersons to again receive their version of the facts. We agree with the district court with regard to the April 2001 letter, and conclude that there is not an issue of material fact as to whether Anderson recklessly investigated the Hendersons' claim. 7