Liberty Insurance Underwriters, Inc. v. Martin, 2:15-cv-11013

Liberty Insurance Underwriters, Inc. sought rescission or declaratory judgment regarding a professional liability policy issued to R. Michael Martin and his law firm, based on alleged material misrepresentations in renewal applications.
As of the relevant applications (2013 and 2014), Mr. Martin failed to disclose numerous disciplinary complaints, client claims, and incidents that could result in claims, while affirmatively representing no such actions or circumstances existed.
Plaintiff issued the 2014 policy with $1M per claim/$2M aggregate coverage, relying on Martin's applications; later, after discovering the misrepresentations, Liberty rescinded the policy and returned the premium.
The case was previously stayed due to Martin’s bankruptcy; after the bankruptcy concluded, Liberty moved for summary judgment against nine defendants with unresolved claims tied to Martin’s conduct.
The court considered whether the policy could be deemed void ab initio (from the beginning) based on the misrepresentations and whether any coverage for the claimants existed under the policy.
None of the nine defendants answered Liberty’s motion for summary judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Martin made material misrepresentations in applications	Martin concealed disciplinary and claim information	No response by defendants	Misrepresentations were material as a matter of law
Whether those misrepresentations voided the policy ab initio	Material misrepresentation voids the policy from inception	No response by defendants	Policy declared void ab initio and rescinded
Whether recission is proper as to the nine claimants	All claims related to voided policy/coverage	No response by defendants	Rescission applies to all named claimants
Whether court must consider alternative policy defenses	Not necessary if policy is void ab initio	No response by defendants	Court did not address, rescission was sufficient

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Standard for summary judgment; defines material fact and genuine issue)
Celotex Corp. v. Catrett, 477 U.S. 317 (Burden on movant to show absence of evidence for summary judgment)
Christian v. State Farm Mut. Auto Ins. Co., 144 W. Va. 746 (Misrepresentation of material fact in insurance application avoids policy)
Powell v. Time Ins. Co., 181 W. Va. 289 (Clarifies definition of materiality under WV law on insurance misrepresentation)
Williams v. Griffin, 952 F.2d 820 (Summary judgment standard: evidence must allow reasonable jury verdict)