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Hartford Underwriters Insurance Company v. Newco International

November 9, 2012

HARTFORD UNDERWRITERS INSURANCE COMPANY, PLAINTIFF,
v.
NEWCO INTERNATIONAL, INC., DEFENDANT.



The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge

Statement of Uncontroverted Facts and Conclusions of Law Re: Plaintiff's Motion for Partial Summary Judgment

After consideration of the papers and arguments in support of and in opposition to Plaintiff Hartford Underwriters Insurance Company's ("Plaintiff") Motion for Partial Summary Judgment [40], the Court makes the following findings of fact and conclusions of law.

UNCONTROVERTED FACTS

1. Plaintiff issued a Spectrum Business Insurance policy ("Policy") to Defendant Newco International, Inc. ("Defendant"), effective February 19, 2011 to February 19, 2012. Mayo Decl. for Pl.'s Mot., Ex. A, Ex. B at 21:13-22:18.

2. As issued, the "Actual Loss Sustained Business Income & Extra Expense-Specified Limit Coverage" ("Business Income Limit") in the Policy was $105,000. Id., Ex. A at HL-CDCal0000140.

3. On March 21, 2011, Defendant submitted to Plaintiff a loss claim under the Policy. Compl. ¶ 7; Answer ¶ 7.

4. On April 6, 2011, Brent Adams, an employee of Defendant's insurance broker, Insurex, emailed Plaintiff and requested on Defendant's behalf that Plaintiff retroactively reform Plaintiff's Policy and increase the Business Income Limit to $5 million. Willis Decl. for Pl.'s Mot. ¶ 11, Ex. D.

5. On April 12, 2011, Plaintiff paid Defendant $105,000 for alleged business income losses arising from the loss of March 21, 2011. Compl. ¶ 7; Answer ¶ 7.

6. On April 21, 2011, Plaintiff informed Defendant through Defendant's CEO, Mark Johnston, that upon review of Defendant's underwriting file, there was no basis to reform the Policy pursuant to Mr. Adams' April 6, 2011, email. Mayo Decl. for Pl.'s Mot., Ex. F.

7. On April 26, 2011, Plaintiff further explained to Mr. Johnston that there was no indication of any agreement between Plaintiff and Defendant specifying a Business Income Limit different from the limit expressed in the Policy, and there were no grounds for retroactively reforming the Policy to reflect a different Business Income Limit after Defendant had already incurred loss. Id., Ex. H.

8. On May 17, 2011, Mr. Adams re-sent to Plaintiff his April 6, 2011, email requesting reformation of the Policy. Willis Decl. for Pl.'s Mot. ¶ 13, Ex. E.

9. On June 1, 2011, Mr. Adams re-sent to Plaintiff his April 6, 2011, email requesting reformation of the Policy. Id. at ¶ 14, Ex. F.

10. On June 5, 2011, a Hartford service representative issued a retroactive endorsement, without authority from a Hartford underwriter to do so, which was backdated to February 19, 2011, and purported to increase the Policy's Business Income Limit to $5 million. Id. at ¶¶ 14, 16-18.

11. Plaintiff informed counsel for Defendant on July 15, 2011, that the Backdated Endorsement was issued in error and would be ...


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