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Judgment against Chubb related to lost fabric affirmed

Posted On: Apr. 9, 2021 1:30 PM CST


A federal appeals court on Friday affirmed a $2 million judgment against a Chubb Ltd. unit in connection with fabric lost after the company that owned the warehouse where it was stored filed for bankruptcy.

Chubb unit Federal Insurance Co. had issued an ocean cargo insurance policy to New York-based Fabrique Innovations Inc. that covered fabric and plush merchandise that was “temporarily in storage”’ at a schedule of specified locations and any other location it leased or operated, according to the ruling by the 2nd U.S. Circuit Court of Appeals in New York in Fabrique Innovations, Inc., DBA Sykel Enterprises v. Federal Insurance Co.

In September 2016, Fabrique filed an insurance claim under the policy for the loss of about $1.2 million in goods stored in a warehouse at one of the specified locations, the ruling said. 

The goods were lost after the company that owned and operated the storage warehouse, Hancock Fabrics Inc., petitioned for bankruptcy and received authorization from the bankruptcy court to liquidate its holdings, including Fabrique’s merchandise, through closing sales, the ruling said.

After Chubb denied its claim, Fabrique filed suit against the insurer in U.S. District Court in New York, which ruled in the company’s favor, granting summary judgment to Fabrique on liability and damages.

The ruling was affirmed by a unanimous three-judge appeals court panel. “Fabrique’s loss of its goods from Hancock’s warehouse was covered under the Policy. First, the Policy said as much,” the ruling said. 

“Second, Fabrique’s loss was not subject to an applicable policy exclusion, it said, in affirming the lower court’s ruling.

Fabrique attorney Joshua L. Blosveren, a partner with Hoguet Newman Regal & Kenney LLP in New York, said in a statement, “We are pleased that the Second Circuit has affirmed in all respects Judge (George B.) Daniels’ rulings on liability and damages. Fabrique looks forward to receiving the insurance proceeds that have long been due to it.”

Chubb’s attorney did not respond to a request for comment.