January 2013 – Federal Court Dismisses Claims Against Errors & Omissions Insurers

In a lengthy opinion, the U. S. District Court for the Northern District of Alabama granted summary judgment to Capitol Specialty Insurance Corporation and Allied World Assurance Company (US) on a variety of contract and tort claims brought by Sharp Realty & Management Company, LLC. Sharp Realty and Mgmt., LLC v. Capitol Specialty Ins. Corp., LLC, No. CV-10-AR-3180-S, 2012 U.S. Dist. LEXIS 75353, 2012 WL 2049817, (N.D. Ala. May 31, 2012), affirmed, 2013 U.S. App. LEXIS 243 (11th Cir. Ala. Jan. 4, 2013).
Sharp Realty & Management (SRM) had sued the companies, claiming that they had wrongfully refused to provide coverage under errors and omissions policies issued to SRM, in regard to a suit brought against SRM by its business partners in an office complex, which SRM managed.  The opinion reaffirms Alabama law regarding the timely notice requirement of liability policies and promissory fraud, and addresses the elements of proof for defense of policy-related claims based on concealment of material facts in an insurance application.  The opinion also construed and applied the “multiple claims” and “related erroneous acts” provisions of the Capitol Specialty E&O policy. Ball, Ball Member Jack Owen represented Capitol Specialty Insurance Corporation.