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Insurance Law

Sealed, Unserved Complaint Not Considered a Claim First Made During the Policy Period

In Braden P’ship, LP v. Twin City Fire Ins. Co., the Northern District of California found that, under a general partners liability policy, a sealed and unserved complaint was not “first-made” against insured partner during the policy period, as the policy provided that a claim is first made “on the date that a summons or similar document is first served upon [an insured].”

Braden P’ship arose out of a coverage dispute involving a general partners’ liability policy that was issued for the August 15, 2011 to June 1, 2012 policy period. The insured brought the coverage action against the carrier after the carrier denied coverage for a pending qui tam action that was filed against the insured by the Department of Justice. In its motion to dismiss, the carrier argued that, because the complaint in the qui tam action was sealed and remained unserved, it did not qualify as a claim first made during its policy period because the policy provided that a “[c]laim shall be deemed to have been first made against a[n] [insured] on the date that a summons or similar document is first served upon such [insured]. . . .” The court found that the policy language “unambiguously requires service of summons or a similar document to trigger coverage of a claim.” Consequently, the court held that the carrier’s coverage obligations were not triggered and granted the carrier’s motion.

Braden P’ship, LP v. Twin City Fire Ins. Co., Case No.14-cv-01689 (N.D. Cal. Apr. 3, 2015).

Originally published in California Insurance Law Review - 2015

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