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Case Study

Order Reimburses Insurer Over $600,000 in Coverage Dispute

August 29, 2018
David G. Harris II

Goldberg Segalla partner David G. Harris II and associate Thomas J. Seery secured an order in Delaware court requiring an insured to reimburse our client, a major specialty lines insurer, over $600,000 plus prejudgment interest that the insurer had paid to defend the insured in litigation.

Our client agreed to defend its insured in an underlying class action under a reservation of rights while the insurer pursued a declaratory judgment action to determine whether it had a duty to defend or indemnify the insured. After our client prevailed in the declaratory judgment action and obtained a ruling in the insurer’s favor that it had no duty to defend or indemnify the insured, the insurer then filed a motion for supplementary relief seeking reimbursement of amounts paid to defend the insured in the underlying lawsuit up until the time of the court’s ruling that no duty to defend was owed. Applying Tennessee law, the court granted our client’s motion and ordered the insured to reimburse the insurer for defense costs in excess of $600,000, plus prejudgment interest.