Not a Lexis+ subscriber? Try it out for free.
LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
NewLife Scis. LLC v. Landmark Am. Ins. Co., 2014 U.S. Dist. LEXIS 21469 (N.D. Cal. Feb. 18, 2014), [enhanced version available to lexis.com subscribers].
In NewLife Sciences, the district court held that the notice-prejudice rule was applicable to a policy that had a condition requiring claims to be reported “as soon as practicable, but in no event later than 30 days after the Policy Period.”
This insurance coverage dispute arose out of an underlying action brought by NewLife Sciences LLC against two individuals who, in turn, filed a cross-complaint against NewLife Sciences and two of its executives (collectively, “NewLife Sciences”) in June 2008. In November 2008, the claimants filed an amended cross-complaint alleging what the insureds believed to be an injury covered under their professional liability policy. NewLife Sciences tendered their defense of the amended cross-complaint a year later, in November 2009, to their insurer. The insurer declined to defend the underlying action because the claim was first reported to the insurer more than thirty days after the expiration of the relevant policy. In May 2012, a second amended cross-complaint was filed and, in December 2012, NewLife Sciences re-tendered the defense of the cross-complaint to the insurer and asked it to reconsider its coverage position. The insurer, however, denied coverage a second time on the same basis. NewLife Sciences, in turn, filed a lawsuit against the insurer alleging a breach of the insurance contract.
The insurer moved to dismiss, on the basis that its policy was a “claims made and reported” policy and, therefore, the notice prejudice rule did not apply. NewLife Sciences, on the other hand, argued that the policy was more accurately described as a “claims made policy,” and that the notice provision therefore could only serve as a basis to deny coverage if the insurer was prejudiced by the delayed notice.
The NewLife court denied the insurer’s motion to dismiss. In reaching its holding, the court found that the policy was more accurately described as a “claims made” policy because, inter alia, it stated on the declarations page that it was a “Claims Made” policy and the reporting provision was found outside of the insuring agreement. The court reached this conclusion without citation to any California case law. Notably, several cases, including the Central District of California’s ruling in Vision Quest Industries Inc. v. Travelers Casualty & Surety Co. of America, 2008 U.S. Dist. LEXIS 108691 (C.D. Cal. Mar. 25, 2008), [enhanced version available to lexis.com subscribers], have reached contrary rulings based on identical or nearly identical facts.
© TROUTMAN SANDERS LLP. ADVERTISING MATERIAL. These materials are to inform you of developments that may affect your business and are not to be considered legal advice, nor do they create a lawyer-client relationship. Information on previous case results does not guarantee a similar future result. Follow Troutman Sanders on Twitter.
For more information about LexisNexis products and solutions, connect with us through our corporate site