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Litigation filed by a Markel Corp. unit against a claims adjuster, whose alleged negligence cost it more than $250,000 in legal fees plus having to pay $1 million over its policy limit, is time barred, says a federal appeals court Thursday, in affirming a lower court’s ruling.
Both Markel Corp. unit Deerfield, Illinois-based Evanston Insurance Co. and a unit of Hamilton, Bermuda-based Aspen Insurance Holdings Ltd. insured an apartment complex in Lauderhill, Florida, property that sustained damage in 2005’s Hurricane Wilma, according to Thursday’s court papers in Evanston Insurance Co., as successor by merger to Essex Insurance Co. vs. William Kramer & Associates LLC.
Aspen provided the first layer of coverage, while Evanston provided excess coverage, according to the ruling.
After the hurricane, both Evanston and Aspen hired Avon, Connecticut-based Kramer to investigate and adjust the related claim. Kramer sent checks for payment under Aspen’s policy, including one to Intervest National Bank in Clearwater, Florida, a mortgagee of the property, but did not send a payment under Evanston’s coverage.
Evanston alleged that Kramer knew, or should have known, Intervest had a mortgagee interest in the property, said the ruling. “But Kramer never informed Evanston of that interest, even though Evanston had requested notice of any such interest,” said the ruling. “Ignorant of Intervest’s interest, Evanston never paid Intervest when it paid is policy limit,” said the ruling.
In December 2010, Intervest sued Evanston over the matter. “Because of Kramer’s failure to inform Evanston of Intervest’s interest,” the insurer Evanston paid more than $250,000 in defense cost and $1 million in excess of its policy limit to resolve Intervest’s suit, according to the ruling.
Evanston filed suit against Kramer in U.S. District Court in Tampa, Florida, charging negligence. The court ruled in Kramer’s favor and was upheld by a unanimous three-judge appeals court panel of the 11th U.S. Circuit Court of Appeals in Atlanta.
The panel agreed with the lower court that the litigation was time-barred. Under Florida law, the statute of limitations for a negligence claim in Florida is four years from the time the claim accrues, said the ruling.
“We agree with the district court that we need not decide exactly when the statute of limitations would have attached. But it stands to reason that Evanston incurred at least some of its $250,000+ legal fees and expenses fell before August 2012, when, as alleged in the complaint, it discovered ‘(d)uring litigation with Intervest’ that Kramer knew or should have known about Intervest’s interests.
“Indeed, we see no way to construe allegations favorably to Evanston. Therefore, the statute of limitations certainly ran before August 15, 2016, when Evanston filed its suit,” said the panel, in affirming the lower court’s ruling.
Kramer’s attorney had no comment while Evanston’s attorney did not respond to a request for comment.
A Markel Corp. unit is not obligated to defend a nightclub in litigation stemming from a shooting on its premises because of an assault and battery exclusion in its policy, says a federal appeals court, in a divided opinion that upholds a lower court ruling.