C.L. Frates & Co v. Westchester Fire Insurance
- Summarized by Ryan Heilman , Heilman Law PLLC
- 11 years 4 months ago
- Citation:
- C.L. Frates & Co v. Westchester Fire Ins., Case No. 12-6274, 2013 U.S. App. LEXIS 18340 (10th Cir. Sept. 4, 2013).
- Tag(s):
-
- Ruling:
- The 10th Circuit found that a reasonable trier of fact could conclude that the plaintiff's insurance claim "arose out of" bankruptcy or insolvency, which was excluded from coverage, reversed the District Court's summary judgment ruling for the plaintiff, and remanded the case for further proceedings.
- Procedural context:
- The United States District Court for the Western District of Oklahoma awarded summary judgment to the plaintiff. Defendant appealed the ruling to the 10th Circuit Court of Appeals.
- Facts:
- Plaintiff, C.L. Frates & Company, brokered the issuance of a stop-loss insurance policy from United Re to Frates' client. United Re subsequently filed a bankruptcy petition. Frates investigated and learned that United Re was not an insurance company, had been sued in Ohio, and filed bankruptcy to stall the Ohio litigation. Frates recommended that its client move its insurance policy to another insurer, but Frates was required to reimburse its client for losses due to higher deductibles.
Frates, in turn, made a claim to recover its losses under an errors and omissions policy issued by Defendant, Westchester Fire Insurance. Westchester denied Frates' claim under an exclusion for claims "arising out of" bankruptcy or insolvency. Frates filed this lawsuit arguing that the claim arose out of United Re's deception, not bankruptcy or insolvency.
- Judge(s):
- Holmes, Bacharach, and Phillips
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