Sunday, January 29th, 2023

Lloyd’s underwriters toppled in appeals court docket case

“In a previous case, a federal district court docket determined in a declaratory judgment motion that an insurance coverage coverage issued by sure underwriters at Lloyd’s, London lined sure negligent actions undertaken by the previous administrators and officers of Omni Nationwide Financial institution in the course of the 2008 banking disaster.”

“Following this declaration,” continued Tjoflat, “the Federal Deposit Insurance coverage Company, performing in Omni’s identify as Omni’s receiver, demanded cost and prejudgment curiosity from underwriters below the insurance coverage coverage for a stipulated judgment beforehand entered in opposition to three of Omni’s former administrators and officers for $10 million, the restrict of underwriters’ insurance coverage coverage.”

The $10 million cost was made, however the underwriters refused to pay greater than $3 million in prejudgment curiosity. With the purpose of accumulating the latter quantity, the FDIC sued the underwriters in 2019 within the Northern District of Georgia. In that lawsuit, the District Court docket dominated in favour of the underwriters, saying that the request for prejudgment curiosity was premature.   

That District Court docket resolution, which granted the underwriters’ movement for abstract judgment, has now been reversed and remanded. The Court docket of Appeals for the Eleventh Circuit concluded that the District Court docket erred by granting abstract judgment for the underwriters.    

“The District Court docket dominated that the FDIC’s demand for prejudgment curiosity was premature below Georgia legislation as a result of the FDIC made its demand after the declaratory judgment was entered and legal responsibility decided,” said Tjoflat.

“On enchantment, the FDIC argues that calls for for prejudgment curiosity are well timed below Georgia legislation as long as they’re made earlier than the entry of a coercive ultimate judgment, which declaratory judgments usually are not. We agree and, accordingly, reverse the District Court docket.”

The prejudgment curiosity stood at $3,004,287.67.

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