Sedgwick Successfully Defends Insurer Against Hotly Contested $100 Million Suit
Sedgwick’s New York and Los Angeles offices teamed up to successfully defend our client, a major insurer, in a hotly contested $100 million insurance action filed in California state court. Larry Klein (NY), Scott Greenspan (NY) and Susan Sullivan (LA) led the team effort, Arthur Aizley (NY) examined three witnesses at trial (including both sides' SEC experts) and Jessika Moon (NY) argued a key motion at the trial and played a central role in witness preparation behind-the-scenes at trial. This was a fiercely contested case in which more than 65 depositions were taken, millions of pages of documents were produced, dozens of discovery motions were filed and ruled upon, and two summary judgment motions were filed. The trial spanned 24 days.
The plaintiff, a giant nursing home operator, sued our client for more than $100 million under a commercial umbrella policy it issued to plaintiff. The umbrella policy sat above a fully fronted, fully funded primary policy issued by a corporate affiliate of the umbrella carrier (also represented by Sedgwick). This fronted policy had a $32.5 million overall aggregate limit (fronted limit) and when the claims against the plaintiff exhausted the fronted limit, plaintiff then alleged that the umbrella policy must "drop down" below its attachment point of $1 million per claim/occurrence and provide first-dollar coverage for all future claims against the plaintiff. Sedgwick argued that the umbrella policy did not drop down and that, instead, its policy’s attachment point remained at $1 million per claim/occurrence – regardless of whether the fronted limit was exhausted. The court sided with Sedgwick and our client on all points and dismissed the plaintiff’s complaint. This win was a total victory for our client and saved it from what would have been an enormous judgment exceeding $100 million.