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Chemical company’s suit against Marsh time-barred: Federal appeals court

Posted On: Mar. 14, 2023 2:29 PM CST

Marsh

A lawsuit against Marsh LLC units by a Louisiana chemical manufacturing company in a dispute over coverage for a damaged cable in the Arabian Gulf was filed too late, a federal appeals court ruled Monday, in affirming a lower court ruling.

New Orleans-based Dynamic Industries International LLC, which has a joint venture with a Saudi Arabian company, and other Dynamic units, charged that Marsh LLC units had either failed to procure adequate insurance coverage from Khobar, Saudi Arabia-based Walaa Cooperative Insurance Co., or alternatively, that Walaa had breached its insurance policy by declining coverage for the damaged cable, according to the ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Dynamic Industries Inc. et al. v. Walaa Cooperative Insurance Co.; Marsh & McLennan Cos. Inc. et al.

The U.S. District Court in New Orleans dismissed the case, and was affirmed by a three-judge appeals court panel.

Louisiana law requires insureds who wish to sue their insurance broker do so “within one year from the date that the alleged act, omission or neglect…should have been discovered,” the ruling said, citing an earlier ruling.

Dynamic sued Marsh after Walaa denied coverage, but Dynamic had received a copy of the insurance policy from Walaa almost 18 months earlier, and when it did so “also received constructive notice of any deficiencies that the policy contained. Dynamic’s claims against Marsh are therefore untimely,” the ruling said.

Dynamic argues the policy contains “absolutely no indication” that coverage would be denied. “But the denial was Walaa’s choice, not Marsh’s,” the ruling said.

A Marsh spokeswoman and an attorney for Walaa had no comment, and Dynamic’s attorneys did not respond to a request for comment.