Insurance Law

Dist. Ct. did not err in finding that plaintiff-insurance company owed entire $3.15 million in attorney fees awarded in underlying lawsuit challenging defendant-insured’s proxy statement used to seek shareholder approval of proposed merger with another company, where plaintiff’s insurance policy contained clause covering as part of defendant’s “loss” not only what insured paid its own lawyers in underlying litigation, but also what shareholders paid to their attorneys. Record showed that court had awarded fees in terms of $630,000 lodestar that was multiplied by five to reflect risk of nonpayment, as well as good result for shareholders. While plaintiff conceded that policy covered lodestar figure, it further asserted that multiplier was not covered, where policy provided that loss would not include “multiplied portion of multiplied damages.” Ct., though, found that entire fee award was covered where nothing in policy defined “damages” in instant exclusion to include attorney fees. Moreover, context of instant exclusion did not pertain to fee awards, but rather pertained to category of losses that insurers exclude on grounds of moral hazard.

In interpleader proceeding filed by insurance company to determine ownership of life insurance proceedings that were contested by wife of deceased insured, as well as by assignee of creditor, who had obtained certain rights to policy from insured, Dist. Ct. did not err in granting summary judgment motion filed by assignee. Dist. Ct. could properly find that assignment of policy from insured to creditor was valid, and that wife was precluded from making claims to said proceeds. Ct. rejected wife’s contention that instant assignment to creditor was without consideration, where wife presented no facts to dispute language in assignment that assignment was made for “valuable consideration.” Moreover, Dist. Ct. did not err in denying wife’s Rule 59(e) motion to modify summary judgment order, where wife’s arguments in support of said motion could have been made while summary judgment motion was under consideration. Also, Dist. Ct. not abuse its discretion in denying wife’s motion to reconsider summary judgment order, even though wife presented new evidence to cast doubt as to whether creditor had supplied any consideration for instant assignment, since reasonable person could still conclude that Dist. Ct.’s entry of summary judgment in favor of assignee was correct.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in action by plaintiffs-insureds seeking declaration that policy issued by defendant for underinsured-motorist coverage precluded defendant for deducting $200,000 that plaintiffs had received from at-fault third-party’s insurance company from $1 million in under-insured motorist proceeds provided in defendant’s policy, where plaintiff’s total losses exceeded $2.2 million. While plaintiff’s argued that instant $200,000 should have been applied to their total losses before determining any deduction from instant $1 million cap, language of instant policy required that $200,000 be deducted from $1 million cap on applicable under-insured motorist coverage.