A federal district court on Wednesday refused to dismiss breach of contract charges filed by a credit reporting agency against underwriters of Lloyd’s and CFC Underwriting Ltd. due to their alleged long delay in the payment of his legal fees for his management liability coverage.
Based in Princeton, New Jersey, Microbilt Corp. obtained a management liability policy from Lloyd’s and CFC Underwriting in 2017 that provided for the payment of legal fees, according to the US District Court ruling in Trenton, New Jersey, in Microbilt Corp. v. Certain Underwriters at Lloyd’s, London and CFC Underwriting Ltd.
The lawsuit accuses the defendants of taking 16 months to pay their 2018 fees in full, which has led his counsel to refuse to continue to represent him and created additional expense associated with finding new counsel. It also reportedly took more than eight months to pay his 2019 costs. The lawsuit did not disclose the amount of costs involved.
The judge said in her ruling that she would not dismiss the case even if the policy did not include an express time limit requirement for the reimbursement.
In layman’s terms, regardless of whether the defendants’ reimbursement for the plaintiff’s legal fees was requested within a reasonable time or immediately after notification of the claims and the attorney’s invoices, these claims are sufficient to at least support a claim. for breach of contract, ”the ruling says.
“Moreover, the mere fact that the defendants have fully reimbursed the plaintiff’s legal costs does not extinguish the plaintiff’s claim, since the plaintiffs are claiming damages resulting from the late payment. The court interprets the defendants’ alleged policy violation as resulting from their late payment, not their refusal to pay.
Microbilt attorney Robert D. Chesler, shareholder of Anderson Kill PC in Newark, New Jersey, said: “This type of delay by insurance companies is very common and can cause real damage.
The defendant’s lawyer in the case did not respond to a request for comment.