In a recent case decided under Ohio Third-Party Bad Faith Law, the Sixth Circuit Court of Appeals has affirmed a District Court's Summary Judgment in favor of the Liability Insurance Carrier that issued a Professional Services Liability Insurance Policy to an Investment advisor, in Download Ganim v. Columbia Casualty Co. (6th Cir. Opinion Filed July 23, 2009). The Investment advisor's client was one Santalucia.
Santalucia asserted claims for unsuitable investment advice, misrepresentation, negligence, and breach of fiduciary duty. Download Ganim v. Columbia Casualty Co. (6th Cir. Opinion Filed July 23, 2009), attached Official Slipsheet Opinion at 2. The claims went to arbitration before the National Association of Security Dealers.
First, the Sixth Circuit affirmed the District Court's holding that there was no duty to defend these claims against the Investor-Policyholder. Download Ganim v. Columbia Casualty Co. (6th Cir. Opinion Filed July 23, 2009), attached Official Slipsheet Opinion at 4-6. See also Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" §§ 3:46 - 3:49 (Second Edition Shepard's/McGraw-Hill; 2009 Supplement in process, West Publishing).
Next, the Sixth Circuit disposed of the Bad Faith Claims resulting from the refusal to defend. Since there was no duty to defend, it was reasonable to refuse to defend and there was no Bad Faith for refusing to defend. Download Ganim v. Columbia Casualty Co. (6th Cir. Opinion Filed July 23, 2009), attached Official Slipsheet Opinion at 6. See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith," supra, §§ 3:51, 3:59.
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