SNL Financial, LC v. Philadelphia Indemnity Insurance
455 F. App'x 363
| 4th Cir. | 2011Background
- SNL Financial, LC purchased a 2008-2009 Philadelphia insurance policy covering claims arising from certain employment actions.
- Policy defines a claim as either a written demand for relief or a judicial/civil proceeding and requires notice of a claim to Philadelphia as soon as practicable, but no later than 60 days after policy expiration if the claim occurred during the policy period.
- In January 2008, Schwartz wrote two letters seeking a meeting to discuss alleged discriminatory conduct by a former employee, but did not demand relief or threaten litigation.
- In July 2008, Schwartz allowed Clark to view an unsigned draft complaint; Schwartz declined to transmit it or to issue a demand.
- Greenberg filed a formal complaint in New York in October 2008; SNL provided notice to Philadelphia on October 27, 2008, triggering the duty to defend.
- The district court granted summary judgment for SNL, holding timely notice under the policy; Philadelphia appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When was a claim first made? | SNL argues no claim until October 2008. | Philadelphia argues January 2008 or July 2008 notices constitute a claim. | Claim not made until October 2008. |
| Do January letters constitute a 'written demand' for relief? | Not a demand for relief; letters insufficient. | Letters could constitute a claim if within policy definition. | Not a claim under January 2008 letters. |
| Did the unsigned July 2008 draft complaint constitute a claim? | unsigned draft could be a claim once reviewed. | Unsigned draft, with no demand, does not constitute a claim. | Unsigned draft did not constitute a claim. |
| Is rescission warranted due to misrepresentation on renewal? | SNL misrepresented lack of litigation to impair insurer. | No misrepresentation; 'litigation' has ordinary meaning; no pending litigation at renewal. | No rescission; renewal disclosure was not a misrepresentation. |
Key Cases Cited
- Graphic Arts Mut. Ins. Co. v. C.W. Warthen Co., 397 S.E.2d 876 (Va. 1990) (plain meaning governs contract interpretation when no ambiguity)
- Hill v. State Farm Mut. Auto. Ins., 375 S.E.2d 727 (Va. 1989) (insurance contracts liberally construed in insured's favor)
- Pilot Life Ins. Co. v. Crosswhite, 145 S.E.2d 143 (Va. 1965) (liberal construction of insurance contract terms)
- Evans v. United Life & Accident Ins. Co., 871 F.2d 466 (4th Cir. 1989) (misrepresentation in renewal may void contract if material)
- Portillo v. Nationwide Mut. Fire Ins. Co., 671 S.E.2d 153 (Va. 2009) (materiality of misrepresentation in insurance policies)