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WAM Obtains Third Circuit Court of Appeals Victory in Long-Running Coverage Dispute

Werner Ahari Mangel is pleased to announce a Third Circuit Court of Appeals victory in one of  the firm’s longest-running coverage litigation disputes.

The Third Circuit affirmed the grant of summary judgment to The Hartford in a D&O coverage matter related to defense and settlement of a securities class action filed back in 2003.

WAM attorneys Gaby Richeimer, Douglas Mangel, and Michelle Beecy represented The Hartford in this contentious case filed by Pfizer Inc., as successor to Pharmacia Corp.

Over the course of litigation, all insurers – except The Hartford – settled with Pfizer in a $150+ million tower of D&O insurance.

The Hartford denied coverage based on a warranty exclusion, prior or pending litigation exclusion, and lack of underlying exhaustion. The district court granted summary judgment to The Hartford, agreeing that Pfizer could not prove the condition precedent to coverage of underlying exhaustion after it had entered into settlement agreements with multiple underlying insurers stating that the insurers did not admit liability.

Because the policy’s exhaustion requirement stated that the underlying insurers for Pfizer/Pharmacia had to fully exhaust their policy proceeds by the payment of loss and admit liability, Third Circuit held that The Hartford was not liable because both conditions precedent to coverage had not been satisfied. The Third Circuit’s opinion adopted WAM’s arguments with respect to the choice of law and application of the specific policy language in The Hartford’s excess policy.

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