Late Notice – 7th Circuit
Notice is not necessarily late even when given after the jury verdict was rendered.
Applying Indiana law, the Federal Seventh Circuit Court of Appeals overturned the district court’s grant of summary judgment in favor of the insurer and remanded the case for further fact findings. The court declined to bar coverage to Mead Johnson by primary and excess CGL carriers for a $13.5M jury verdict when notice was withheld until after the verdict was reached. The court found that the district court’s ruling that late notice created an irrefutable presumption of harm to the insurers was erroneous and held that, under Indiana law, late notice creates a rebuttable presumption of harm that shifts the burden to the insured to produce some evidence that there was no harm to the insurer caused by the late notice. In remanding the case, the court stated that there was not sufficient factual development regarding harm to grant a motion for summary judgment, but recited several facts that it found significant, including that the defense counsel used by Mead was the same counsel that the insurers had hired to defend it in earlier cases and that the carriers could not reasonably have expected to have obtained a more favorable outcome had they given earlier notice because the earlier cases had settled for approximately 7x more. Nat’l Union Fire Ins. Co. v. Mead Johnson & Co., Nos. 12-3478, 13-1526, (7th Cir. Oct. 29, 2013,).