This insurance dispute arose when a personal injury case unexpectedly resulted in a large judgment against the condominium complex where the injury occurred. Slip op. at 1-2. After the judgment was affirmed on appeal, the complex’s primary insurance carrier paid its policy limits plus interest. The excess insurer, Philadelphia Indemnity Insurance, refused to pay on the grounds that the condominium complex failed to provide notice of the claim until after the verdict. The issuer of the supersedeas bonds, Berkley Regional Insurance therefore paid the balance.
Berkley then sued as the assignee and subrogee of all rights held by the personal injury plaintiff, the condominium complex, and the primary insurer against Philadelphia. Id. at 2. The District Court granted summary judgment against Philadelphia on the grounds that it was not prejudiced as a matter of law by any failure to provide timely notice. Id. The Fifth Circuit reversed and remanded. Berkley Reg’l Ins. Co. v. Philadelphia Indemn. Ins. Co., 690 F.3d 342 (5th Cir. 2012).
On remand, the parties filed cross-motions for summary judgment. Berkley urged that Philadelphia received constructive notice of the claim by virtue of the condominium complex’s notice to an insurance agent/broker involved in securing the coverage. Slip op. at 7. The District Court reviewed Texas law on the subject as well as the pertinent contract between the agent/broker and Philadelphia, and concluded that notice to the broker was not notice to Philadelphia. Id. at 7-13.
The District Court then revisited the issue of whether Philadelphia was prejudiced by late notice. Id. at 15. While the Fifth Circuit did not decide that issue on appeal—and could not have done so at the time given the procedural posture—it strongly suggested that Philadelphia was prejudiced. Id. at 16-17. The District Court considered the record in view of the Fifth Circuit’s analysis and concluded that Philadelphia was prejudiced as a matter of law. Id. at 17. Therefore, it granted Philadelphia’s motions for summary judgment and denied Berkley’s cross-motion. Id. at 18.