Am. Auto Ins. Co. v. Meloni, No. 09-1106 (3d Cir. 2011)Annotate this Case
An intoxicated driver struck a pole, resulting in the death of his passenger. The passenger's estate sued defendant, claiming that defendant illegally sold liquor to 19-year-old, who provided it to the driver. Defendant's claim for defense and indemnification from its liability insurer was rejected because the policy contained a liquor liability exclusion. Defendant then sued its insurance agent, who sought a defense under his professional liability policy with AAIC. The agent had a gap in coverage before obtaining the AAIC policy and the parties disputed the retroactive coverage date. The district court granted summary judgment to AAIC. The Third Circuit affirmed. Since the agent allowed his coverage to lapse, the retroactive date was the inception date of the first AAIC policy issued (2006); the "wrongful act" occurred when the agent failed to exercise the proper degree of care in placing insurance for defendant. The agent began placing coverage for defendant in 2002, so the act did not occur "wholly after" the retroactive date.