Insurance Recovery Law: History’s Best Decisions: The Brillhart Decision
The next case in our series Insurance Recovery Law: History’s Best Decisions turns back the clock to 1942 for the Brillhart decision. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942). Although decided in 1942, Brillhart is extremely valuable today..
Nowadays, corporate policyholders are facing an all-to-common scenario. When a business tenders a claim, an insurance carrier should evaluate the claim, and provide a defense. Many insurers have abandoned this approach for a more adversarial route. With those insurers, rather than providing a defense, they sue seeking a declaration of no coverage. Their strategy is to sue when the corporate policyholder is weakest, and that time is typically just after the corporate policyholder has been sued in an underlying lawsuit. Favorite forum for these insurers, Federal Court.
If the rash of insurer-filed declaratory judgment lawsuits are the epidemic, Brillhart is the cure. In reality, insurance coverage lawsuits have no business in federal court, and Brillhart sets the standard for the doctrine of abstention, which provides a mechanism for dismissing insurance company filed federal Court declaratory judgment actions.
In today’s video, Mark Miller explains how this often overlooked doctrine can be used to help policyholders.