A federal court has rejected efforts by the president of a firm whose tainted peanut butter killed nine people to obtain coverage over the $1 million limit of his company's directors and officers liability policy.
U.S. District Court Judge Norman K. Moon, sitting in Lynchburg, Va., on Sept. 3 granted the insurer--Federal Insurance Company--a summary judgment tossing out claims by Stewart Parnell, president, chief executive officer and a part owner of Peanut Butter Corp. of America.
Mr. Parnell had entered a counterclaim for legal defense expenses outside of the policy's limits. He had also alleged that Federal had agreed to fund a defense within the policy. The judge found his claim was implausible, inconceivable and failed to plead the prima facie elements for a breach of contract.
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