Arrowood Indemnity Co. v. King, 699 F.3d 735

Appellants Pendleton King, Daphne King and Pendleton King Jr. appeal a district court ruling that three Royal insurance policies do not cover a third-party ATV accident injuring Conor McEntee.
The accident occurred on a private road within the Kings’ residential development, while Junior allegedly operated the Kings’ ATV towing Conor by rope.
Policies at issue: (1) Royal Indemnity homeowner’s policy (RIC), (2) Royal Insurance umbrella policy (RICA), and (3) National Surety excess policy; all followed form to the homeowner’s policy in relevant respect.
Royal sought declaratory relief that the homeowner’s and umbrella policies did not cover the accident; McEntees sued the Kings in state court for negligent supervision and entrustment.
The district court held no coverage under the homeowner’s policy because the accident site, not the entrustment location, determines coverage and it was not an insured location; the umbrella policy required listing the ATV on the declarations page, which was not done.
Connecticut Supreme Court answers certified questions in Arrowood IV (2012), guiding accrual of negligent entrustment to the site of the accident and the meaning of insured location, affecting this appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Homeowner’s policy coverage for negligent entrustment	King argues entrustment claims should be covered based on where entrustment occurred or where the vehicle was housed.	Royal contends coverage hinges on accident-site location and insured-location terms, which exclude this site.	No homeowner’s coverage; accident-site not an insured location.
Umbrella policy coverage and ATV listing requirement	Umbrella might cover ATV use on premises without a declared listing due to policy ambiguity.	Umbrella unambiguously excludes uncovered ATVs unless described in declarations.	No umbrella coverage because ATV was not described as covered in declarations.
Effect of policy amendments for umbrella/excess coverage	Older version could be the in-force policy without listing requirements.	Amendment valid; change required listing and did not violate statute or retroactively apply.	Amendment valid; no retroactive effect; no coverage under amended policy.
Excess policy follow-form with umbrella policy	Excess should cover if umbrella does not; follow-form principle should apply.	No umbrella coverage cascades to excess when umbrella has no coverage.	No coverage under excess policy due to lack of umbrella coverage.
Counterclaims (CUTPA, bad faith) and NEBC negligence	Royal’s investigation was unreasonable; seeks CUTPA/bad faith relief.	Answers to certified questions negate these theories; investigation was reasonable.	Counterclaims fail as a matter of law.

Arrowood Indem. Co. v. King, 304 Conn. 179 (Conn. 2012) (answers certified questions; negligent entrustment accrual and insured-location construction)
Arrowood Indem. Co. v. King, 39 A.3d 712 (Conn. 2012) (same decision (final appellate report) validating Arrowood IV)
Arrowood Indem. Co. v. King, 605 F.3d 62 (2d Cir. 2010) (certified questions; Arrowood III addressing accrual and insured-location issues)
Arrowood Indem. Co. v. King, 512 F. Supp. 2d 117 (D. Conn. 2007) (Arrowood I: district court decision on coverage and policy interpretation)
Arrowood Indem. Co. v. King, 532 F. Supp. 2d 404 (D. Conn. 2008) (Arrowood II: district court on reconsideration and related rulings)