Princeton Investment Partners, Ltd. v. RLI Ins. Co., 2018 U.S. Dist. LEXIS 23512 (D. N.J. Feb. 9, 2018)
In a widely reported decision, dated February 9, 2018, District of New Jersey Judge Kevin McNulty granted Ford Marrin’s motion for judgment on the pleadings, thereby dismissing the complaint against the firm’s client, RLI Insurance Company. The insurance coverage lawsuit arises out of an underlying dispute over the lapsing of $15 million in key person life insurance. The court held that RLI had no duty to defend or indmnify a consulting and investment firm based on a failure to maintain insurance exclusion in the investment firm’s Professional Liability insurance policy.
By way of background, the insured provided management services to a vodka importing company. Upon the death of the company’s former chief executive officer, the company learned that the “key person” life insurance policies covering the chief executive officer had lapsed due to the non-payment of premiums. The company sued its insurance broker, who in turn sued the insured, alleging the failure to ensure that the client paid the life insurance premiums.
RLI disclaimed any duty to defend or indemnify the insured based in part on policy exclusions barring coverage for liability arising out of “any actual or alleged failure to effect or maintain … insurance.” The court agreed with RLI’s coverage position, holding that the language of the exclusion was unambiguous, and “comfortably accommodates” the situation in which the insured allegedly failed in its duty to ensure that one of its clients maintained insurance.
Partners Joseph D’Ambrosio and John Mattoon and Associate Gregory Bruno worked on this matter.
