2nd Circuit Affirms Decision Re Allocation of Damages for Insurance Company

2nd Circuit Affirms Decision Re Allocation of Damages for Insurance Company
Sep 22, 2017

Riker Danzig’s Insurance Group secured a summary order from the United States Court of Appeals for the Second Circuit on September 19th, affirming the summary judgment decision of the United States District Court for the Southern District of New York in Uvino v. Harleysville Worcester Insurance Company (“Harleysville”).  In the underlying action before the District Court, plaintiff had alleged more than $2.5 million in damages from a construction company covered by Harleysville with a general commercial liability insurance policy.

In 2012, a jury awarded the plaintiff $401,628 in damages.  The plaintiff sought declaratory relief that damages were covered by the Harleysville policy.  In 2015, the District Court granted summary judgment in favor of Harleysville.  On appeal, plaintiff argued that the District Court erred in placing the burden on them to prove what portion of the unallocated jury verdict in the underlying action represented covered damages.  In affirming the District Court’s summary judgment for Harleysville, the Second Circuit found that plaintiff had the burden to prove coverage, given Harleysville’s attempts to intervene in the underlying case to allocate damages, and that plaintiff’s theory of allocating damages rested on “pure speculation and conjecture.” 

Riker Danzig partner Lance J. Kalik, who led the team for client Harleysville, noted, “We are pleased that the Second Circuit accepted our argument that the insured should bear the burden of establishing what portion of an unallocated general verdict relates to covered versus uncovered damages.  This decision will help clarify how to properly preserve an insurer’s defenses to coverage when a trial may result in both covered and uncovered damages against an insured.”

Working with Lance for Harleysville were counsel Margriet Schaberg and Marcia Wefelmeier, and Of Counsel Victor Ashrafi and James Rothschild.