National Insurance Law Forum : Insurance Litigation Lawyer & Attorney : National Insurance Law Forum : Insurance Coverage, Bad Faith Litigation

All in all, it hasn't been a great year for Hartford.  First, it had to go down to Virginia to litigate with an insured about contaminated peanuts.  Then there were rumors about HFS selling off its P/C business.  Now John Heintz has sued Hartford and several other insurers for failing to pay up in a convoluted case involving cheap Chinese imported food products.

The Hartford Courant recently reported that a new class action has been filed by the Kelley Drye law firm in the U.S. Court of International Trade in which the mellifluously named "Honey Sioux" company and other U.S. food producers allege that Harfrod, Great American, XL and a division of Swiss Re aided and abetted the dumping of cheap Chinese food products in the United States by issuing customs surety bonds that guaranteed the payment of any dumping duties that the U.S. government later determined were owed. The suit also seeks recovery against the U.S. Customs and Border Protection and the U.S. Department of Commerce, which are accused of failing to collect hundreds of millions of dollars in anti-dumping duties that the plaintiffs now seek to recover under these policies. 

The plaintiffs are represented by John Heintz, Chairman of Kelley Drye’s insurance recovery and litigation practice group, former partner of Scott Gilbert and a veteran of the pollution coverage wars of the 1980s and 1990s.  In a Kelley Drye press release, Heintz explained that"Because these importers were new, thinly capitalized, and had little or no credit history or experience in importing, the insurers knew or should have known that the importers posed an extremely high risk of defaulting on assessed dumping duties. The insurers, nevertheless for years, continuously issued the bonds on behalf of the importers, and made millions of dollars in premiums."

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The Connecticut Supreme Court has breathed new life into Hartford's efforts to obtain reimbursement from its reinsurers for $1.15 billion that it paid to settle Western McArthur's asbestos claims.  In Hartford Acc. & Ind. Co. v. Ace-American Reinsurance Co., No. SC 17625 (Conn. December 25, 2007), the court declared that a Superior Court judge should not have granted summary judgment to Harford's reinsurers in light of apparent ambiguity with the respect to the terms of the subject treaties.  As a result, the case has been remanded to the trial court to consider extrinsic evidence of the parties' intent.

The ruling is somewhat surprising, as the same court had ruled six years ago in Metropolitan Life that the "cause" test requires that the number of "occurrences" in asbestos litigation be determined by reference to each individual claimant's injuries and not by reference to the insured's failure to warn.   In this case, however, the court distinguished Metropolitan as well as the similar reinsurance holding of the New York Court of Appeals in Travelers v. Lloyd's, finding that the "any one accident" common cause language in the Hartford treaties was "uniquely broad."  The court also appears to have been influenced by the extrinsic evidence presented by Hartford concerning the adoption of this language in the 1970s, wherein it asked for this "any one accident" language in lieu of an aggregate extension clause to permit it to aggregate losses occurring in more than one policy year.  Under the circumstances, the court found that Hartford's position that diverse injuries could be aggregated if they were of the same kind or "meaningfully related" was a "plausible" interpretation of the subject wordings.

Merry Christmas, Hartford!

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