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February 2015

Gordon & Rees Hartford Team Wins Summary Judgment in EPLI Coverage Dispute

Gordon & Rees Hartford managing partner Dennis O. Brown and associate Kelly M. Kirby secured summary judgment on behalf of their insurer client in a $4 million jury verdict against a daily newspaper in New Haven, CT.

The plaintiff alleged that the newspaper discharged her in retaliation for complaining about a subordinate’s sexually harassing behavior and for refusing to provide false testimony to assist her employer in defending an employment lawsuit. The court found that through a lack of due diligence in settling her underlying claims the plaintiff had accepted an assignment of a “claims made” EPLI policy for the year after her claim was actually made. 

The decision focused on the importance of claims made coverage, the role of such policies in keeping insurance affordable, and case law from Connecticut and other jurisdictions enforcing the plain language of “claims made” policies. In addition to the breach of contract claim under the policy, the court entered judgment in the insurer’s favor on counts of bad faith, Connecticut’s direct action statute, procedural bad faith, and equitable estoppel. The court reserved judgment on a single remaining count of statutory unfair insurance practices to allow the plaintiff an opportunity to clarify her factual assertions before a final ruling was made. 

The court agreed with Gordon & Rees that the analysis in Capstone Building Corp. v. American Motorists Insurance Co., foreclosed the possibility of procedural bad faith claims under Connecticut law. It was the first decision of the Connecticut U.S. District Court abandoning prior authority by the court recognizing procedural bad faith causes of action under Connecticut law. 

Dennis O. Brown