FDCC Files Amicus Brief Successfully Urging Reversal Of Court Of Appeals On K2 Investment Group Case

Thursday, March 20, 2014 - 10:06

The Federation of Defense & Corporate Counsel (“FDCC”) was pleased the Court of Appeals reversed its decision in the case of K2 Investment Group v. American Guarantee & Liability Insurance Company, a case where the FDCC filed an amicus brief successfully urging reargument and reversal. This new decision upholds the important principle that an insurance policyholder is entitled to all coverage purchased as part of a policy but no additional coverage. Joining in the FDCC amicus brief were the New York Insurance Association, the National Association of Mutual Insurance Companies and the Property Casualty Insurance Association of America.

The FDCC and the other trade organizations were represented by Hurwitz & Fine, P.C., a New York State law firm, with a team headed by former FDCC president Dan D. Kohane.

The brief argued that insurers and insureds were entitled to rely upon policies as written and that coverage should not be extended, beyond policy terms, because of a good faith error on the part of an insurer. The court decided after the reargument that an insurance company’s failure to defend does not prevent the company from raising legitimate exclusions to coverage.  As an example, an insurer who issues a homeowners policy (that excludes auto accidents) with $100,000 in limits should not be compelled to pay $500,000 for injuries resulting from a car crash because of a simple error by an insurance company.

“If the Court of Appeals had not reversed course and instead stood by its original decision made last year, there is a risk that contracts of all types would be transformed beyond their terms,” Vicki Roberts, president-elect of the FDCC, said. “All parties to contracts, whether they are insurance policies or other commercial agreements, benefit from certainty. Parties should be able to rely on the plain language of contracts without concern that courts will extend their bargained for terms.”

The Federation of Defense & Corporate Counsel (FDCC), an organization composed of recognized leaders in the legal community who have achieved professional distinction, is dedicated to promoting knowledge, fellowship, and professionalism of its members as they pursue the course of a balanced justice system and represent those in need of a defense in civil lawsuits. 

For more information about the FDCC, visit its website, www.thefederation.org. For more information about the K2 Investments decision, contact Dan D. Kohane at 716-849-8942 or at ddk@hurwitzfine.com