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On August 2, 2019, Dallas attorney Rick Harmon prevailed in the Fifth Circuit on behalf of their client RSUI Indemnity Company in a high-stakes insurance coverage dispute involving over 50 employment-related arbitrations filed against RSUI’s insured. The arbitrations involved field engineers who contended that the insured company failed to pay them overtime. The insured company failed to notify RSUI of the first arbitration in compliance with the claims-made-and-reported provision of its directors and officers policy.  As a result, RSUI denied coverage for the late-reported arbitration and all related arbitrations that followed.

The insured filed suit in the United States District Court for the Eastern District of Texas contending that it was entitled to recover its $5 million policy limit, as well as penalties under the Texas Prompt Payment Act and attorneys’ fees.  Judge Amos Mazzant granted RSUI’s motion for summary judgment on all claims and the Fifth Circuit affirmed, holding that, “the absence of notice, joined with the fact that the 2015 policy deemed all the later claims to fall under the 2014 policy, prevented coverage of the claims.”  The case is ADI Worldlink, LLC v. RSUI Indemnity Co., No. 17-41050, 2019 WL 3521815 (5th Cir. 2019).  The decision is designated for publication.

See additional reporting of this case by Insurance Law360 and Business Insider.

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J. Richard Harmon

J. Richard Harmon


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