Attorneys successfully obtained an affirmance from the state Superior Court of a jury verdict for the defendant insurer in an insurance coverage case

Attorneys successfully obtained an affirmance from the state Superior Court of a jury verdict for the defendant insurer in an insurance coverage case. The insurer denied the plaintiff's claim for coverage after his boat was destroyed by fire. In denying coverage, the insurer concluded that plaintiff was responsible for the fire and that he had made material misrepresentations concerning his whereabouts at the time of the fire. In its Answer to Plaintiff's Complaint, the insurer admitted that plaintiff owned the boat. Less than two weeks before trial, however, the insurer uncovered evidence suggesting that plaintiff did not own or have an insurable interest in the boat. The insurer did not move to amend its Answer and trial proceeded. The jury ultimately concluded that the insurer lacked a sufficient basis for denying coverage based on arson and misrepresentation, but it found that plaintiff lacked an insurable interest in the boat. A defense verdict was therefore entered. The attorneys' became involved in post-trial motions and successfully amended the insurer's Answer to deny ownership. Plaintiff then appealed arguing that the insurer's failure to disclose the lack-of-insurable-interest defense prior to trial resulted in a "trial by ambush," especially where the insurer had admitted ownership in its Answer. The Superior Court upheld the verdict on the basis that it was plaintiff's own conduct that prevented the insurer from uncovering the lack-of-insurable-interest defense until shortly before trial. The Superior Court further held that plaintiff could not have been prejudiced by the defense because it was part of plaintiff's own burden of proof to demonstrate an insurable interest. Finally, because plaintiff's own conduct prevented the insurer from uncovering the defense, and because plaintiff suffered no prejudice from the defense, the Superior Court ruled that the trial court had properly allowed the insurer to amend its Answer after trial to conform to the trial evidence.