Case Notes

A recent ruling from the United States District Court for the Western District of New York applied New York law in rejecting an insurer's attempt to deny coverage. The insured faced an underlying liability claim arising out of the insured's provision of adulterated apples that were used to make the underlying plaintiff's baby food. Thruway Produce, Inc. v. Massachusetts Bay Insurance Co., ___ F. Supp. 3d ___, 2015 WL 4459001 (W.D.N.Y. July 20, 2015). The insured, Thruway Produce, Inc. (“Thruway”), moved for summary judgment seeking a declaration that it was owed a defense and, should it not prevail in the underlying lawsuit, indemnity from its insurer, Massachusetts Bay Insurance Co. (“Massachusetts Bay”). While the court found that as-yet-resolved factual questions about the underlying matter precluded it from issuing a declaration that Massachusetts Bay owed a duty to indemnify Thruway, the court did declare that Thruway was owed a defense. In so doing, it rejected Massachusetts Bay's arguments that Commercial General Liability (“CGL”) policies do not apply to an underlying liability arising out of a contract claim.