Associated Materials Sues Insurer Over Legal FeesJanuary 31st, 2024 by Editor
In the midst of defending itself from a lawsuit for allegedly providing defective products, door and window manufacturer Associated Materials is embroiled in a series of lawsuits involving Markel American Insurance Co. (Markel). Associated Materials accuses Markel of breaching its duty by refusing to pay the rates billed by the legal representation the company chose to hire.
Associated Materials had three commercial umbrella liability policies with Markel, two of which “provide[ed] for defense and indemnity coverage against” litigation, such as the case in which Associated Materials is defending itself against homebuilder Toll Bros., Inc. Toll Bros. brought a suit against the company in 2022, after it used windows and patio doors manufactured by Associated Materials in homes the company built and sold in a Las Vegas property development. The builder is alleging that the products caused “property damage to the [project] homes and homeowners’ personal property.” Markel sued Associated Materials seeking “a determination of whether any of the damages Toll alleges … are covered by the Policies and a declaration limiting the scope of its duty.”
In a complaint filed on January 25, 2024, in the Court of Common Pleas in Summit County, Ohio, Associated Materials argues that “each primary policy and umbrella policy covers bodily injury and property damage in excess of the Primary Policy over which it sits,” as well as providing that “Markel has the ‘right and duty to defend the insured against any ‘suit’ seeking’ damages for bodily injury and/or property damage.” The complaint notes an attempted mediation between both parties and Toll Bros. in November 2023, that “ultimately failed to resolve” the case between Toll Brothers and Associated Materials “or the related insurance coverage disputes between Markel and Associated Materials at issue” in the latest complaint.
Based on the policies in place at the time of the Toll Brothers suit, Associated Materials hired the law firm Nelson Mullins as defense. According to the complaint, Markel confirmed the hiring. The initial document indicates that in early 2023, Associated Materials’ self-retention was exhausted and Markel “elected to defend Associated Materials under a reservation of rights and hired the Wolfenzon Rolle law firm. However, because Markel acknowledged that certain conflicts of interest were created by its reservation of rights, [the insurer] conceded that Associated Materials has the right to hire independent counsel to protect its rights under the Policies,” court documents state.
Associated Materials chose to stay with Nelson Mullins but states in the complaint that “Markel has refused to pay Nelson Mullins’ rates.” The complaint alleges that the insurance provider has “wrongfully pressured Associated Materials and Nelson Mullins to accept far lower rates, including by refusing to expressly acknowledge Nelson Mullins’ roles as independent defense counsel and refusing to reimburse past expenses exceeding the self-insured retention unless Associated Materials and Nelson Mullins agree to the rates that Markel deems satisfactory.”
The manufacturer further accuses its insurer of trying to “forum shop,” by filing its lawsuit in California, a state that—according to Associated Materials—has nothing to do with any of the cases involved. Rather, Markel is “hoping that by filing in California it can sidestep the application of Ohio law, which is directly contrary to Markel’s insurance coverage positions,” company officials allege.
Associated Materials argues that the lawsuits pertaining to issues related to the Toll Brothers litigation should either be filed in Ohio—where Associated Materials is headquartered—or in Nevada where the affected properties are located.
Associated Materials is asking to be compensated for monetary damages exceeding $25,000, costs and attorney’s fees associated with the new case, and Nelson Mullins’ full rates.