In the Supreme Court of the State of New York for the County of New York, the Honorable Barbara Jaffe, granted defendants’ Arch Insurance Group and Arch Specialty Insurance Company’s motions, dismissing them from a Superstorm Sandy claim on August 13, 2015.

The case, Rockaway Commons, LLC, et al. v. Lexington Insurance Company, et al.,1 deals with a Superstorm Sandy claim in Queens County, New York. In September of 2012, plaintiff, Malachite Group, Ltd., “were issued a second-layer excess commercial property insurance policy for real property owned by plaintiff,” by Arch Specialty Insurance Company, a subsidiary of Arch Insurance Group. “the policy, covering June 2012 through June 2013, provid[ed] excess coverage above the $5 million limits provide restively by the primary and fire-layer excess insurers, defendants, Lexington Insurance Company and Maiden Specialty Insurance Company.” The policy contained the following language:

Provided always that liability attached to the Company only after the primary and underlying excess insurer(s) have paid or have admitted liability for the full amount of their respective ultimate net loss liability ... then the limits of the Company's liability shall be those set forth [on the annexed schedule] under the designation "Limit Insured" and the Company shall be liable to pay the ultimate net loss up to the full amount of such "Limit Insured."

As a result of Superstorm Sandy, the plaintiffs suffered significant damage to their property and were paid, $4,775,107.00 by Lexington Insurance Company, but have been paid nothing by Maiden Specialty Insurance Company. In order to protect the statute of limitations on their claims against each carrier, plaintiffs filed suit and also named Arch Insurance Group and Arch Specialty Insurance Company claiming damages of $25,000,000.00.

Both Arch Insurance Group and Arch Specialty Insurance Company filed separate motions to dismiss the complaint. Arch Insurance Group argued they are, “a holding company and corporate parent to Arch Specialty [Insurance Company], and does not issue insurance policies, there is no contractual relationship between it and plaintiffs, and thus, it cannot be liable to plaintiffs for breach of contract.” Plaintiffs submitted that they “erroneously believed Arch Group had issued the subject policy because its name appears on it.”

With regard to Arch Specialty Insurance Company, they argued that, “because the underlying primary and excess policy limits ha[d] not been met, and as those insurers [did] not admit liability for their policy limits, Arch Specialty has no obligation to pay under its policy, and thus, there is no breach.” Plaintiffs responding indicating that they would, “agree to discontinue the action as to the Arch defendants conditions on their waving the statute of limitations to permit subsequent actions against them once the losses exceed the second-layer coverage threshold.”

Judge Jaffe, agreed with the defendants’ arguments and dismissed the complaint against both named defendants, respectively. However, with regard to the question of the statute of limitations, the Judge deferred making a ruling indicating, “any issue as to a future statute of limitations defense is not ripe for judicial review.”

As always, I’ll leave you with a (mildly) related tune, the Ramones with Rockaway Beach:

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