The insurer unsuccessfully moved to dismiss portions of the insureds' counterclaim based upon prior knowledge. Hudson Spec. Ins. Co. v. Talex Enter., 2018 U.S. Dist. LEXIS 105598 (S. D. Miss. June 25, 2018).
The insureds' building collapsed in McComb, Mississippi. Pubic utilities were damaged and traffic disrupted. The City sued the insured, alleging that the building collapsed because there was too much water gathered on its roof. The City further alleged that the insureds knew too much water was on the roof because they had been told by someone hired to clean the drain that it was clogged and by a contractor that the roof was so damaged that it could not safely be repaired.
The insureds requested a defense from Hudson under a CGL policy and coverage under a commercial property policy. The policy provided that coverage was void if the insured committed fraud or intentionally concealed or misrepresented information. Hudson denied coverage and sued for a declaratory judgment.
The City executed an assignment with the insureds by which the City's claims would be made solely under the CGL policy. The City and the insureds counterclaimed against Hudson. They alleged that the policies covered the building's "unexpected" collapse, but that Hudson failed to fulfill its obligations under the policies.
Hudson's motion sought to dismiss parts of the counterclaim that went beyond the pleadings and were better resolved on summary judgment. The court determined that the counterclaim alleged facts showing an actual, present dispute regarding coverage under the policies. Nothing more was required under Rule 12 and the motion to dismiss was denied.