Court Opinion

ID: 9461053
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:04:41.573339+00
Date Added: 2024-06-11T17:36:52.191619
License: Public Domain

WILLIAM J. CAMPBELL, District Judge
(concurring in part and dissenting in part).
Consistent with the views expressed in Parts I and II of Judge Pell’s excellent opinion, I would remand this case to the district court for a determination of whether Leakakos’ reliance upon Northwestern’s conduct (in assuming Leaka-kos’ defense , in the state court action) prejudiced the insured to an extent sufficient to render Northwestern’s belated reservation of rights inoperative. With *234respect to the views expressed in Part III, however, I must respectfully dissent.
I cannot agree that Northwestern’s alleged letter of December 16, 1970 reserved the right to contest coverage on the basis of the specific policy exclusions subsequently identified in Northwestern’s letter of July 15, 1971. At best, the December 16 letter reserved to Northwestern the limited right to contest coverage if it could demonstrate that its ability to prepare and conduct an adequate defense had been prejudiced by the alleged delay between the “accident” and notification thereof by the insured.
The December 16 letter, set forth in full at footnote 7 of the majority opinion, was quite specific in this regard. It noted that the policy required written notice “be given this company as soon as possible”, and contended that the “[fjailure to report accidents to us promptly prejudices us seriously in the completion of our investigation and the handling of such claims.” Clearly, the possibility of such prejudice constituted the basis for and, in my view, the extent of Northwestern’s reservation of rights. Specifically, the letter provides that “[bjecawse of the delay in reporting the accident, we accept the notice subject to full reservation of all our rights under the policy”, and that “we shall proceed . upon the understanding that in so doing we do not waive our rights under the policy by reason of your failure to give us notice as soon as practicable .”. (Emphasis added).
This is not a case in which the insured belatedly notified the insurance carrier of some vague and unspecific claim. Were such the case, perhaps the insurance company would be warranted in unqualifiedly reserving all its rights, without identifying the specific grounds upon which coverage may ultimately be contested. But in the instant case, by December of 1970, the state court proceedings had already been commenced. Northwestern could quite easily have reviewed the allegations of the complaint and determined that the subject policy might not provide coverage with respect to the claim asserted therein against Leakakos. Since the insurance company, on December 16, 1970, knew or had reason to know the nature of the claim asserted in the complaint, its failure to reserve its rights on the basis of specifically identified policy exclusions should foreclose it from later asserting that such rights were reserved by operation of the unspecific reservation of rights language appearing in the alleged letter of December 16, 1970.