Summary
Claims-made insurance policy; definition of "claim" as a demand or assertion of a right to payment or remedy. News articles and internal insurer notations of a "claim" do not substitute for an actual claim made by the injured party during the policy period. The Fifth Circuit held that no timely claim was made against the insured, so the excess insurer had no duty to defend or indemnify, reversing the district court's "duck" test. Published opinion applying Mississippi law to interpret unambiguous policy terms.
Topics
Practice areas
Questions Presented
- Whether a claim was made against M&O during the policy period to trigger coverage under Evanston's claims-made excess policy.
- Whether Evanston is obligated to indemnify M&O's CEO for a settlement reached after the policy period.
Holdings
- The Jordans failed to demonstrate that they made any claim against M&O during the policy period. News articles quoting Meaghin Jordan expressing a desire to ban magnets did not constitute a claim, and no other demand was made until after the policy period.
- Because no coverage was triggered under the policy, Evanston has no duty to indemnify Zucker for the settlement.
Key quotations
“a 'claim' is an assertion by a third party that, in the opinion of that party, the insured may be liable to it for damages within the risk covered by a policy” (at 10)
“a demand for something due or believed to be due” (at 10)
“The assertion of an existing right; any right to payment or to an equitable remedy” (at 11)
“If it looks like a duck, swims like a duck, quacks like a duck, and is prepared for dinner like a duck, it's probably a duck” (at 7)
“Information received and recorded as a timely claim by the parties will be deemed a timely claim by the Court.” (at 7)
Factual background
Braylon Jordan, a toddler, swallowed small magnets manufactured by M&O, causing severe internal injuries requiring surgery and leaving him permanently disabled. News articles reported the incident in 2012. M&O forwarded some articles to its insurers, including Evanston, which opened an internal claim file. The Jordans did not send a demand letter until December 11, 2012, after the Evanston policy period (July 25, 2011 to July 25, 2012) had ended.
Procedural history
The Jordans sued M&O for product liability. Evanston denied coverage. The Jordans filed this declaratory action. The district court denied cross-motions for summary judgment, then after a jury verdict in favor of M&O, granted in part Evanston's motion for summary judgment, holding Evanston not obligated to indemnify but required to continue defense. Both parties appealed.