Grinnell Mutual Reinsurance Co. v. S.B.C. Flood Waste Solutions, Inc. (113 F.4th 768) 7th Cir., Aug. 21, 2024

Words & Phrases

Rescission

Trial Judge

Harry D. Leinenweber

Appellate Judge

Kolar

Holding

In an insurance coverage matter, the plaintiff insurance company filed a lawsuit seeking rescission of insurance policies issued to the defendants on the basis that the defendants had not disclosed an ongoing dispute when defendants applied for insurance coverage. The district court granted summary judgment in favor of the plaintiff, finding it was entitled to rescind the insurance policies based on material misrepresentations and defendants appealed. The Seventh Circuit affirmed, finding that the failure to disclose the “very real prospect of litigation” constituted a material misrepresentation in the insurance applications and, contrary to defendants’ arguments, the court did not need to determine whether the companies involved in the dispute operated as alter egos because the answer to that question did not change the outcome.

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