Big Win for Insurance Industry in Alleged Lost Policy Litigation

Recently, the United States District Court for the District of Maryland (Civil Action No. 17-0670) granted summary judgment in favor of an insurer in an alleged lost insurance policy case dating back to the late 1950s and early 1960s.  Tate Andale, Inc. (“Tate Andale”), a manufacturer of industrial strainers and filters located in Baltimore, Maryland, began operation in 1958.  In the late 1970s, shipyard workers began suing Tate Andale, alleging that Tate Andale’s products contained asbestos.  Tate Andale’s insurance broker claimed that Pennsylvania National Mutual Casualty Insurance Company (“Penn National”) and its predecessor issued commercial general liability insurance policies to Tate Andale from 1958 to 1964.  Tate Andale was unable to locate copies of the alleged insurance policies and could not provide any contemporaneous evidence that Penn National issued the alleged lost insurance policies.

In 2016, Tate Andale issued a demand to Penn National for indemnification and reimbursement of defense costs in underlying asbestos cases asserted against it.  In March 2017, Penn National filed a declaratory judgment action in the United States District Court for the District of Maryland, seeking a declaratory judgment that the alleged lost insurance policies were never issued, that Tate Andale could not establish coverage under the alleged insurance policies, and that Penn National did not owe a duty to indemnify or defend Tate Andale in both past and future asbestos cases.

Tate Andale attempted to establish the alleged lost insurance policies by so-called “secondary evidence.”  Courts will allow an insured to recreate a lost insurance policy if the insured can present clear and convincing evidence to establish 1) that the alleged lost policy was issued by the insurer to the insured, and 2) the terms, conditions, limitations, exclusions, and policy limits of the alleged lost policy.  Klopman v. Zurich Am. Ins. Co., 233 Fed. Appx. 256, 258 (4th Cir. 2007); Dasher v. Ransom, 2021 Md. App. LEXIS 617, *12-20 (Md. Ct. Spec. App. 2021).  In this case, Tate Andale retained an expert in an attempt to opine that the alleged lost policies existed and to attempt to establish the pertinent terms of the alleged lost policies.

After extensive discovery, the Court granted summary judgment in favor of Penn National on April 30, 2022.  The Court held that Tate Andale’s expert did not provide sufficient evidence to meet the clear and convincing evidence standard that Penn National ever issued the alleged lost policies to Tate Andale, and did not provide clear and convincing evidence of what the terms, conditions, limitations, exclusions and policy limits for the alleged lost policies were.  Consequently, the Court held that Tate Andale could not meet its burden of proof under Maryland law and granted summary judgment in favor of Penn National.

Tate Andale has appealed the decision to the United States Court of Appeals for the Fourth Circuit.  The District Court’s opinion in this case is a great win for the insurance industry in defending against long-tail insurance coverage claims where the alleged insured claims insurance policies were issued but cannot be found or were destroyed.

For further questions regarding this case, or the legal standards, please contact Mike Spitzer, Director, at (804) 560-9600.