There could not be many more interesting decisions in August, 2012 than the officially unpublished opinion by a panel of the Ninth Circuit in Allied Professionals Insurance Co. v. Kong, 2012 WL 3525353 (9th Cir. Opinion Filed August 16, 2012), Download Allied Professionals Insurance Co. v. Kong (9th Cir. No. 10.56968, Opinion Filed August 16, 2012) UNPUBLISHED.
Apparently the case involved a denial of all Coverage by Allied Professionals Insurance Company when its Policyholder, anonymous in the panel's opinion, was sued by Ms. Joanne Kong. Kong settled with the Policyholder "purportedly awarding Kong $1,115,000 compensatory damages and assigning Kong the right to enforce the award against Allied." Allied Professionals Insurance Co. v. Kong, 2012 WL 3525353 *1 (9th Cir. Opinion Filed August 16, 2012).
The panel's opinion is also silent on whether this sum was within Allied's Policy Limit.
Suit was filed first in Florida State Court. It was removed to the United States District Court for the Middle District of Florida, representing a second suit, and in which the Florida Federal Judge denied Ms. Kong's Motion to Remand and granted Allied's Motion to Compel Arbitration in Orange County, California. Allied Professionals Insurance Co. v. Kong, 2012 WL 3525353 *1 (9th Cir. Opinion Filed August 16, 2012). The Ninth Circuit panel refused to review this Florida District Court decision.
A third lawsuit was apparently then filed in California after an Arbitration was held in California, and after the Arbitrators ruled in favor of Allied. (It is of interest that in Florida, Insurance Coverage is not an issue for Arbitration, but for a Court.) The California Federal Judge entered an Order affirming the Arbitration Award in favor of Allied. Allied Professionals Insurance Co. v. Kong, 2012 WL 3525353 *1(9th Cir. Opinion Filed August 16, 2012).
The Ninth Circuit panel affirmed. The Appellate panel held that "Kong has failed to demonstrate that the arbitration award constitutes manifest disregard of the law." Allied Professionals Insurance Co. v. Kong, 2012 WL 3525353 *2 (9th Cir. Opinion Filed August 16, 2012). This necessarily means, it would appear, that Allied won the Coverage Issue or Issues "because the subject of the arbitration was whether the Allied policy at issue covered an injury Kong suffered and the enforceability of an agreement between Kong and Allied's insured purportedly awarding Kong $1,115,000 compensatory damages and assigning Kong the right to enforce the award against Allied." Allied Professionals Insurance Co. v. Kong, 2012 WL 3525353 *1 (9th Cir. Opinion Filed August 16, 2012). [Emphasis added.]
When all Coverage is denied, if the Liability Insurance Company believes strongly enough in its Coverage position then the result of decisions in cases like Kong will inevitably be that further cases will be reported (both those officially published and those officially unpublished alike) involving Liability Insurance Companies' demands for Arbitration of resulting Settlement Agreements between Policyholders and Injured Claimants for which the Carriers contend there is no Coverage in the first place.
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