UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

August Term, 2022

Argued: December 1, 2022 Decided: May 22, 2023

Docket No. 20-3559-cv

THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA,

Plaintiff-Appellee,

— v. —

EQUITAS INSURANCE LIMITED,

Defendant-Appellant.

Before:

CALABRESI, LYNCH, and NARDINI, Circuit Judges.

Defendant-Appellant, a reinsurer, appeals from an order of the Southern District of New York (Swain, C.J.) granting summary judgment to Plaintiff- Appellee, its reinsured. On appeal, Appellant argues that the district court erroneously held that its reinsurance obligations to Appellee are co-extensive with Appellee’s separate insurance obligations to a third party and that it presented no triable issue of fact on its late-notice defense. We disagree. The district court correctly determined that English law, which governs the relevant reinsurance policy, would interpret that policy to provide coverage that is co- extensive with Appellee’s separate insurance obligations. The district court also correctly rejected Appellant’s late-notice defense because Appellant has not shown the sort of extreme facts that would be necessary under English law to support recognition of that defense where, as here, timely notice is not a condition precedent to coverage. We therefore AFFIRM the district court’s order granting summary judgment.

PETER R. CHAFFETZ (Andrew L. Poplinger, on the brief), Chaffetz Lindsey, LLP, New York, NY, for Plaintiff- Appellee.

SEAN THOMAS KEELY, Freeborn & Peters LLP, New York, NY, for Defendant-Appellant (Jill C. Anderson, Freeborn & Peters LLP, Chicago, IL, on the brief). GERARD E. LYNCH, Circuit Judge:

This is a reinsurance dispute between Defendant-Appellant Equitas Insurance Limited (“Equitas”) and Plaintiff-Appellee the Insurance Company of the State of Pennsylvania (“ICSOP”). In the late 1960s, ICSOP provided umbrella insurance to a predecessor of Dole Food Company for a policy period from October 1968 to October 1971 (the “ICSOP-Dole policy”). Equitas then reinsured part of ICSOP’s exposure for the same three-year period.

2 Many years later, in 2009, homeowners in Carson, California, sued Dole for polluting their soil and groundwater. Dole and ICSOP settled those claims and allocated $20 million of the settlement liability to the ICSOP-Dole policy, even though the Carson plaintiffs’ property damages and personal injuries continued to accrue after the ICSOP-Dole policy period had ended. In doing so, the settlement followed California law’s approach to allocation, known as the “all sums rule,” which treats any insurer whose policy was in effect during any portion of the time during which the continuing harm occurred as jointly and severally liable (up to applicable policy limits) for all property damages or personal injuries caused by a pollutant.

ICSOP thereafter sought reinsurance coverage from Equitas for its liability, only for Equitas to deny its claim on the basis that English law, which governs the reinsurance policy, would not have allocated ICSOP’s liability on an all sums basis. Instead, Equitas asserted, English law would have prorated ICSOP’s liability based on the number of years it provided coverage to Dole. Accordingly, Equitas contended that its reinsurance obligations were similarly limited. Equitas also defended its denial on the theory that ICSOP had deliberately delayed notice of claim,