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Markel unit wins D&O suit against housing corporation

Posted On: Jun. 17, 2019 2:14 PM CST


A Markel Corp. unit is not obligated to defend or indemnify a housing corporation under an exclusion in its directors and officers liability policy because of a previous comparable action, said a federal appeals court Friday, in affirming a lower court ruling.

Santa Monica, California-based Ocean Towers Housing Corp. had filed suit in U.S. District Court in Pasadena, California, against Markel unit Evanston Insurance Co. seeking defense and indemnity coverage in connection with underlying lawsuits in which one of its directors was charged with favoring himself and his family, according to the lower court’s ruling in Ocean Towers Housing Corp. v. Evanston Insurance Co., et al.

The more recent case involved litigation filed by Cincinnati-based U.S. Bank, N.A. There was a previous action filed by the Kingston, Jamaica-based NCB Financial Group Ltd., according to the lower court ruling.

The insurer denied coverage to Ocean Towers based on a “specific matter exclusion” in the policy issued by Deerfield, Illinois-based Evanston, which says the insurer will not be held liable for allegations “in a Specific Matter or any substantially similar fact, circumstance or situation.”

The “allegations in the cases all share the same general narrative, actors, and overall scheme,” said the lower court’s ruling. A unanimous three-judge appeals court panel of the 9th U.S. Circuit Court of Appeals in San Francisco agreed. 

“Like the district court, we conclude that all of the claims asserted against Ocean Towers and its officers and directors in the five underlying suits are barred by this exclusion,” said the ruling.

Attorneys in the case had no comment or could not be reached.

Last week, a federal appeals court affirmed a lower court decision and ruled Evanston was not obligated to indemnify or defend a beef company under its D&O policy because of an exclusion for matters relating to securities.