Daileader v. Certain Underwriters, No. 23-690 (2d Cir. 2024)
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The United States Court of Appeals for the Second Circuit heard an appeal involving Timothy Daileader, the independent director and manager of an affiliated group of companies, collectively known as "Oaktree," which were in financial distress. Daileader was seeking coverage from his insurer, Certain Underwriters at Lloyds London Syndicate 1861 (Syndicate 1861), for his defense in litigation involving Oaktree. However, Syndicate 1861 denied Daileader’s insurance claim. Daileader subsequently sought a preliminary injunction to enforce Syndicate 1861’s duty to defend. The United States District Court for the Southern District of New York denied Daileader’s motion, and Daileader appealed.
The Court of Appeals affirmed the district court's decision, finding that the district court did not abuse its discretion in denying Daileader's motion for a preliminary injunction. The court held that Daileader had not shown a clear or substantial likelihood of success on the merits of his claim. The court also found that Daileader had not made a strong showing of irreparable harm. The court concluded that the Syndicate's refusal to continue paying under its policy did not disrupt the status quo of ongoing payments between the two parties. Therefore, the court determined that Daileader's desired injunction was mandatory and not prohibitory, thus subject to a more stringent standard for relief.
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