Global Reinsurance and Pacific Employers Insurance were parties to a facultative reinsurance agreement, whereby Global agreed to reinsure an umbrella policy that Pacific had issued to Buffalo Forge Company. In 2009 – eight years after Pacific first received notice of multiple asbestosrelated lawsuits against Buffalo Forge – Pacific submitted a claim to Global for $559,072.67. Global denied the claim, contending that coverage was barred under the agreement’s notice provision, which required that Pacific “promptly provide [Global] with a definitive statement of loss.” Pacific then sued Global in Pennsylvania federal court.
Responding to Global’s motion for summary judgment in Pacific Employers Insurance Co. v. Global Reinsurance Corp. of America, Pacific contended that, under Pennsylvania law, late notice does not preclude coverage unless prejudice from the delay can be demonstrated. Global argued that New York law applied, under which late notice bars coverage without requiring a showing of prejudice. Global also asserted that the same was true under Pennsylvania law, so no conflict was present. The court denied summary judgment, holding that, notwithstanding Pacific’s failure to comply with the notice requirement, (1) Pennsylvania law should apply because the insured risk was located in Pennsylvania (where Pacific’s offices were located, and from where it paid claims under the primary policy), and because payment by Global to Pacific would have been received in Pacific’s Pennsylvania office, and (2) under Pennsylvania law, prejudice must be demonstrated to prevail on a late notice defense.