In an insurance coverage case arising from a maritime personal injury and limitation action, Fox Smith attorneys obtained summary judgment for the insurer from the United States District Court for the Western District of Kentucky, while at the same time successfully opposing a motion for summary judgment from an additional insured. Related to a maritime injury action underlying “Martin Marietta Materials, Inc. v. Zurich American Insurance Co.,” Martin Marietta, though not a party to the maritime case, had nevertheless filed a petition for exoneration or limitation pursuant to federal statute. Fox Smith’s Bart Sullivan represented the defendant parties in the maritime case (resolved through settlement in Kentucky state court) and in the limitation action. In 2005, the Western District court held that Martin Marietta was a named insured on defendants’ insurance policy, but denied Martin Marietta’s claims for indemnity and attorneys’ fees.
Martin Marietta then sued the defendants’ insurer, Zurich American Insurance Co. (represented by Fox Smith attorney Bart Sullivan) for costs and attorneys’ fees related to the limitation action and for damages stemming from Zurich’s alleged refusal to provide a defense. Both Martin Marietta and Zurich filed motions for summary judgment. Martin Marietta claimed it was entitled to a defense, its costs and attorneys’ fees relating to the limitation action, and damages. Bart Sullivan, on behalf of Zurich, argued that Martin Marietta’s claims against Zurich were never ripe because the underlying injury plaintiff never sued Martin Marietta, that Martin Marietta’s claims and motion were barred by the commencement provision of the insurance policy, and that Martin Marietta had in place insurance that covered it in any event.
The Western District of Kentucky court, in March 2006, ruled in favor of Zurich and against Martin Marietta on both motions. It noted, as argued by Bart, that the insurance policy at issue included a one-year limitation period requiring all suits relating to any claim on the policy to be commenced within one year from the denial of coverage. Here, the alleged denial of coverage took place in August 2003, but Martin Marietta did not bring suit against Zurich until May 2005. Thus, under applicable state substantive law, Martin Marietta’s claims for damages, indemnification, and attorneys’ fees were time-barred. Accordingly, the court held the commencement provision precluded the suit brought by Martin Marietta against Zurich.