A Zurich Insurance Group Ltd. unit does not have to provide coverage to some investment asset and property management company involved in litigation with a shareholder's widow because it filed its claim too late, said a federal appeals court Friday, in affirming a lesser court ruling.
A partner of Washington, D.C.-based UIP Cos. LLC, which focuses on multi-family properties within the Washington metropolitan area, died in April 2022 and his widow, Marion Coster, inherited his 50% interest in the businesses, based on the ruling through the District of Columbia Circuit U.S. Court of Appeals in Zurich American Insurance Co. v. UIP Companies LLC.
Ms. Coster began negotiations with UIP management to obtain compensation for her ownership interests in UIP, but negotiations turned sour, the ruling said.
In February 2022, Ms. Coster's attorney sent an email to UIP's counsel suggesting how the dispute might be resolved. In the summer of 2022, Ms. Coster filed three lawsuits against UIP and its principals, two within the Delaware Chancery Court and also the third within the U.S. District Court for that District of Columbia. That litigation is still pending.
UIP filed notice of Ms. Coster's lawsuits to Zurich Insurance Group unit Zurich American Insurance Co. in March 2022, nearly nine months after Ms. Coster filed her first lawsuit against UIP and nearly seven months after Ms. Costar filed her third lawsuit, the ruling said.
Zurich denied coverage on the basis that its policies provided that a claims notice should be filed “as soon as practicable” following the insured first learns of the claim but “in no event” no later than 3 months after the relevant policy period's expiration.
UIP sued in district court in Washington, D.C., seeking coverage. A legal court ruled in the insurer's favor and was affirmed with a unanimous three-judge appeals court panel.
The attorney's February 2022 communication “qualified as a claim underneath the the Zurich policies,” it said.
“UIP asserts that its principals remained unaware the Zurich policies covered the suits until months after they were filed. But the rule within the District of Columbia” is that an insured “is held to know the competition of his policy,” it said, in citing an early on ruling and affirming the lower court's decision.
Attorneys in the event had no comment.
