News Brief

Thurston, Tranen and Butterfield Secure Nevada Coverage Victory

September 23, 2022

Jim Thurston (Partner-Chicago), Daniel Tranen (Partner-St. Louis) and Chad Butterfield (Partner-Las Vegas) prevailed in a coverage action in the Nevada District Court. Wilson Elser’s client is an insurance company and the case involves a former officer of the bankrupt insured entity seeking coverage under a D&O $5 million excess policy purchased by the former CEO. The CEO, the subject of DOJ and SEC fraud allegations, signed a warranty letter on behalf of “all insureds,” representing none had knowledge or information of acts that could give rise to a claim under the policy and further stipulated that any claims arising from that knowledge are excluded from coverage. Upon receipt of a demand letter alleging he breached his fiduciary duty in failing to inform the board of the CEO’s wrongdoing, the officer sought coverage under the excess policy. In an issue of first impression, the Court granted Wilson Elser’s motion for judgment on the pleadings, holding the insurer has no duty to defend or indemnify the officer as the fraud allegations against the CEO are sufficient to trigger the Warranty Exclusion. Further, two non-imputation policy provisions were also deemed inapplicable by the Court.

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