Suit Against Insurer Dismissed on Favorable Terms
We represented a liability insurer in complex, multi-party coverage litigation relating to a theft by a security guard. The guard stole equipment from a manufacturing facility where he was assigned to work. To recover the theft loss the manufacturer sued its own insurer, seeking coverage for property damage. The property insurer then brought a third party complaint against the security company under a theory of negligent hiring of the employee-guard. The security company then sued our client seeking coverage and a defense in the suit. We defended our client in its position that its policy, with its limited theft endorsement and in the absence of a fidelity bond, did not provide coverage or a defense for employee theft, regardless of the negligent hiring theory. After refusing to order a defense, and denying all dispositive motions, the court granted our motion to bifurcate and delay the claims against our insurer-client, indicating a potential for denying all coverage. Achieving this position of leverage allowed us to obtain an agreed dismissal of our client on confidential, favorable terms.