Charter Oak v. American Capital: among other things, a pending 27-1001 action
March 30, 2015
I keep an eye on potential 27-1001 opinions since the Maryland Courts do not produce that many. And there's another one, Charter Oak v. American Capital, United State District Court for Maryland #DKC 09-0100.
The case is truly massive litigation that (at a quick glance) involves coverage for claims involving defective heparin. Charter Oak apparently filed a Declaratory Judgment against American Capital to get out of paying and American Capital responded with (among other things) a 27-1001 bad faith action.
The case generated a short section of an memorandum opinion (about four pages, starting at page 15) about whether 27-1001 applied. But the Court did not break any new legal ground. Charter Oak argued that since it was being asked to defend against potential third party claims, 27-1001 did not apply. (27-1001 facially applies to only first party coverage claims.) Judge Chasanow disagreed. Under Whiting-Turner Contracting v. Liberty Mut. Ins., 912 F. Supp. 2d 321 (D.Md. 2012), 27-1001 applies to all claims by an insured against an insurer, not just to first party insurance claims. So... Old news.
But hopefully they'll litigate it out and develop the rest of us some caselaw.