National Surety Corporation. v. Dustex Corp., No. 15-2096 (8th Cir. 2016)
Annotate this CaseNSC, a wholly owned subsidiary of Fireman's Fund, filed a declaratory judgment action against Dustex seeking a judicial determination that it did not have a duty to defend or indemnify Dustex in an arbitration proceeding, which, at the time, was pending before the American Arbitration Association (AAA). The district court subsequently concluded that Dustex failed to establish the affirmative defense of estoppel. The court concluded that, under either Georgia or Iowa law, the district court did not clearly err in finding that Dustex knew or should have known that Fireman's Fund was proceeding under a reservation of rights. The court's review of the district court's findings does not indicate that Fireman's Fund failed to provide Dustex with an effective reservation of rights that included a specific basis for Fireman's Fund's reservations about coverage. Accordingly, the court affirmed the judgment.
Court Description: Smith, Author, with Colloton and Kelly, Circuit Judges] Civil case - Insurance. Under either Georgia or Iowa law the district court did not clearly err in finding that Dustex knew or should have known that Fireman's Fund was proceeding under a reservation of rights, and the insurer was not estoped from denying coverage based on an argument that it had failed to give Dustex effective notice that it was defending the arbitration action under a reservation of rights.
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