Insurer spurns manufacturer's offer to pay cost of accident.

Hartford paid a claim after a gas-powered clothes dryer caught fire and destroyed its policyholder's house. Hartford sought compensation from Electrolux for the cash value of the loss, $226,052, plus pre-judgment interest under state law and post-judgment interest under federal law. Electrolux offered to settle the case for $241,636, but without admitting liability. The insurance company refused, even though the offer matched the demand. A federal judge in Buffalo stated that he would not have his time wasted with a trial where the jury would have nothing to resolve. Judge Arcara, citing the Second Circuit's opinion in McCauley v. Trans Union, LLC, 402 F.3d 340 (2005), said Hartford cannot force Electrolux to admit liability. He granted Electrolux's motion to dismiss for lack of subject matter jurisdiction since, with the offer to pay the full demand, there is no live controversy ripe for litigation.

Case Law Alert - 1st Qtr 2012