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National Union Fire Insurance Company v. Cava

National Union Fire Insurance Company v. Cava

Case No. 
Type of Proceeding: 
Appeal from the Circuit Court of Marion County (Judge James)

This case raises a series of issues regarding the interpretation of claims-made-and-reported policies.


This is an insurance coverage case involving a claim of workplace discrimination.

The plaintiff was employed by the defendant, Toyota World.  The plaintiff was discharged, and in July, 2007, he filed a complaint with the EEOC alleging race discrimination.  Toyota World was insured by National Union under a claims-made-and-reported policy.  Because Toyota World had a $5,000 self retention, it elected to defend the plaintiff’s EEOC claim itself.  Eventually, the EEOC claim was dismissed and the plaintiff was given a letter advising that any suit had to be filed within 60 days.  The plaintiff did not file suit within the 60 day time period.

In the meantime, a lapse in coverage occurred (apparently through no fault of the defendant, Toyota World).  To rectify the lapse, Toyota World was instructed to complete a new application.  The completed application made no mention of the plaintiff’s EEOC claim.  Eventually, a new policy was issued.

In April, 20, 2009, after the new policy had taken effect, the plaintiff filed a suit that largely repeated the allegations from his EEOC complaint.  Toyota World tendered the suit to National Union.  However, National Union refused to provide coverage--arguing that the suit was, in fact, the same “claim” as the plaintiff’s original EEOC complaint.  Because the claim was not reported before the policy had lapsed, there was no coverage.  The trial court disagreed, finding that coverage existed by virtue of the doctrine of reasonable expectations.

Positions of the Parties: 


National Union insists there is only one “claim,” and that Toyota World was obligated to promptly report the claim when it was first made by the plaintiff in July, 2007.  According to National Union, providing notice of a claim within the policy period is a common and essential feature of this type of policy.  Quoting from an unpublished opinion, National Union argues that “notice [to the insurer] is the event that actually triggers coverage.”  Here, timely notice was not provided and, therefore, coverage was never triggered.

Regarding the doctrine of reasonable expectations, National Union denies that its policy is in any way ambiguous.  The policy language governing Toyota World’s self retention rights has no bearing on Toyota World’s duty to the provide notice of the claim.


According to Toyota World, the plaintiff’s EEOC complaint was fully resolved by dismissal.  Therefore, at the time Toyota World completed its new application there was no pending or potential “claim” to report.  The plaintiff’s discrimination suit was a new “claim” for policy purposes and Toyota World provided prompt notice of that claim after it was served with suit papers.

Toyota World also alleges that the policy is ambiguous, especially regarding its rights and duties under the self retention provisions.  Toyota World argues that it reasonably expected coverage in light of the fact that it successfully defended the plaintiff’s EEOC complaint, at its own expense, as part of its self retention.  Thus, the trial court was correct in finding that coverage existed.

Probable Impact: 

West Virginia does not appear to have any published cases regarding claims-made-and-reported policies.  This case is listed on the Rule 20 docket.  Therefore, we can expect new syllabus law explaining the general nature of these policies, their notice requirements, etc.

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