Case Briefs

A five-year delay in providing an excess insurer notice of a twice-tried medical malpractice claim led the U.S. Court of Appeals for the Second Circuit to vindicate the excess insurer's denial of coverage. The insured's attempt to seek excuse for the delay based upon reliance on advice of counsel also fell on deaf ears at the Second Circuit. Huntington Hospital (“Huntington”) sued defendant New England Insurance Company (“New England”) for breach of contract after New England denied coverage for failure to provide the notice required by the contract. See Huntington Hospital v. New England Reinsurance Company, No. 07-cv-4961 (2d Cir. Feb. 3, 2009).

The medical malpractice giving rise to the claim occurred in 1983, and suit was filed against Huntington in 1985. The case first went to trial against Huntington in March 2000, but ended with a deadlocked jury. The second trial went forward the following month and resulted in a jury verdict in an amount greater than Huntington's primary insurance coverage. After review of the claim, New England denied coverage based upon Huntington's failure to provide timely notice leading to Huntington's lawsuit. The U.S. District Court for the Southern District of New York granted summary judgment in New England's favor, and Huntington appealed. The Second Circuit affirmed the district court's decision. The court noted that the terms of the excess policy in issue required Huntington to give New England notice “as soon as practicable” upon the occurrence of an event “reasonably likely to involve” the excess policy. A post-verdict notice five years after suit was filed did not satisfy the conditions precedent of the policy. The Second Circuit further rejected the argument that Huntington's late notice should be overlooked due to its alleged reliance on advice from counsel as to whether New England's excess policy might be implicated by the underlying claim. The court found that any such reliance on the part of Huntington could not justify its failure to provide New England with timely notice. As the court concluded, “The notice here was untimely as a matter of law, and Huntington's apparent reliance on deficient advice is not sufficient to justify its total failure to inform New England that the excess insurance policy might be invoked.