(Superior Court, Ocean County, Judge E. David Mallard) – Insurance Coverage-Affiliated Entity Dispute Endorsement-Summary Judgment Obtained

SR&A partner David Abrams won summary judgment in favor of the client insurance company. Plaintiff, a Lakewood synagogue, brought a declaratory judgment action seeking recovery of defense costs well into the six figures arising from two law suits brought against the synagogue by parent members of a religious day school. The underlying suits alleged conversion related to the sale of property claimed to be beneficially owned by the day school, breach of contract, and unjust enrichment, amongst other claims. SR&A contended that he various causes of action were not covered under the applicable Officers and Directors Liability coverage, and that, in any event, the policy contained an Affiliated Entity Dispute Endorsement that limited its coverage to the stated minimal defense costs which had been paid. While plaintiff contended that the parties were not Affiliated Entities the court ruled otherwise, holding that the history and continued relationships between the synagogue and day school established the applicability of the limiting endorsement. This case is the first ruling in New Jersey interpreting and enforcing the policys Affiliated Entity Dispute Endorsement.