July 22, 2019

The United States Court of Appeals for the Second Circuit ruled that an insurer who waits to deny coverage so that it can investigate facts giving rise to a disclaimer will not be prevented from denying coverage under Insurance Law Section 3420(d)(2), as long as the insurer does not use the investigation as a tactic to delay the disclaimer. The case is United Fin. Cas. Co. v. County-Wide Ins. Co., No. 18-3022, 2019 U.S. App. LEXIS 19581 (2d Cir. July 1, 2019).

After Juan Pineda was involved in a three-vehicle collision while he was hauling goods for International Trucking Group (ITG). At the time, Pineda was potentially entitled to coverage under one of two insurance policies. The first was a motor carrier liability policy issued by Country-Wide Insurance Company (Country-Wide), and the second was a “non-trucking liability” policy issued by United Financial Casualty Company (UFCC) UFCC to T.F. Victors Trucking Company, LLC, who employed Pineda and who also owned the truck that Pineda was driving on the day of the incident. The non-trucking policy excluded coverage when other insurance is available for automobiles being used “[t]o carry property in any business, or while such property is being loaded onto or unloaded from the insured auto,” so when a truck is being used for business purposes. Later, UFCC learned that Country-Wide might also owe Pineda coverage, and would be primary over UFCC's coverage because Pineda had been operating the truck for business purposes at the time of the collision. UFCC tried to reach Country-Wide several times.