Defense Verdict in Declaratory Judgment Action Following Devastating Fire


Attorney John A. Girouard successfully obtained a defense verdict in a jury trial in United States District Court, First District of Massachusetts.   The plaintiff insurer sought declaratory judgment with regard to the rescission of its policy with an insured plumber.  The insured plumber is alleged to have started a fire that destroyed a large commercial property in South Hadley, Massachusetts.  The alleged damages in the corresponding tort/subrogation action exceed $500,000.00.

As grounds for the rescission, the insurer claimed that the plumber made a material misrepresentation to the insurance agent when applying for a liability policy.  Specifically, the plaintiff alleged that the plumber failed to disclose that his business was operating as a partnership or joint venture.  The insurer based this conclusion on the fact that the plumber had agreed to share a portion of his profits from the South Hadley plumbing project with another plumber who was also working on the project.  The insurer argued that this arrangement constituted a joint venture or partnership.  The plaintiff insurer further alleged that it relied on such misrepresentations when grating the application for insurance.  Further, the plaintiff argued that had the partnership been disclosed, it either would not have accepted the plumber’s application or would have accepted it only with significant additional premium cost.  As a result of the alleged misrepresentation, the insurer denied the claim arising from the property damage caused by the fire.

The plaintiff insurer filed the subject declaratory judgment action against the plumber, the property owner, and the commercial tenant who had hired the plumber to complete the project.  Attorney Girouard represented the defendant commercial tenant.  At trial, the plaintiff presented evidence that the two plumbers had made statements that they were “partners” on the project.  However, Attorney Girouard presented evidence that the co-defendant plumber was not operating his business as a partnership at any time.  Further, Attorney Girouard further argued that the financial arrangement the defendant had with the other plumber did not constitute a partnership under the law.

At trial, Attorney Girouard cross-examined the insurance agent who had completed the defendant’s liability policy application and point out the stark differences between a formal, legal partnership and the informal arrangement between the plumbers.

Moreover, Attorney Girouard argued that the risk of loss under the liability policy was not materially increased by the informal arrangement between the defendant and the tradesman and the plaintiff’s insurer had improperly rescinded the policy.

After less than an hour, the jury returned with the a verdict in favor of the defendants.


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