Settlement Discussions Result in Dismissal of Firm’s Wholesale Insurance Broker Client in Complex Insurance-Related Lawsuit

March 2013

Overview

Ron Mandel of Gray•Duffy’s Encino office successfully negotiated the dismissal of the firm’s client in a multi-party insurance coverage and insurance broker malpractice lawsuit.

Discussion

D.R. Horton, Inc. v. American & Foreign Insurance Company, et al.

In underlying construction defect litigation in Nevada, D.R. Horton, Inc., the developer of the construction project at issue, claimed additional insured status pursuant to certain insurance policies issued to its framing subcontractor. Although a Certificate of Insurance was issued by the retail broker indicating there was an additional insured, the carrier did not validate the additional insured status since internal procedures were not followed. Thus, when the carrier withdrew from the defense of D.R. Horton, subsequent lawsuits were filed against the applicable carriers and the retail broker who then cross-complained against the wholesale broker, the firm’s client. Ultimately, the retail broker agreed to pay $30,000 to resolve the broker-related issues, which included a dismissal of the firm’s wholesale broker client without any settlement payment being made on their behalf.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.