Insurer’s Rescission Action Must Wait Pending Trial Of Underlying Lawsuit

On March 6, 2018, U.S. District Court Judge Michael Fitzgerald issued an order granting the motion of our client to stay an insurer’s declaratory relief and rescission action until the underlying lawsuit between the insured and the claimant is resolved. As reflected in the order, a copy of which is available here, the Court rejected the insurer’s “too narrow” view of governing law, and stayed the coverage action to avoid potential prejudice to the insured that could arise if the insurer was allowed to move forward with its rescission claim, which was based on disputed contentions regarding what the insured knew about the claimant’s potential “click fraud” claims at the time the insured applied for the policy.

Michael A. Topp of Clyde & Co US LLP appeared for Plaintiff.  Eric D. Mason of Gauntlett & Associates appeared for Defendants.

 

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