Republic Franklin Ins. Co. v. Albemarle County Sch. Bd., No. 10-1961 (4th Cir. 2012)
Annotate this CaseFranklin Insurance commenced this action against its insured, School Board, for a declaratory judgment that Franklin Insurance owed no duty to defend the School Board in an action commenced by the School Board employees for violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. 216(b), nor any duty to indemnify the School Board for any judgment that might be entered in the action. The court concluded that the failure to comply with FLSA was a wrongful act and that, while a judgment awarding unpaid wages would not be a covered loss under the policy because payment of those wages was a preexisting duty, any obligation to pay liquidated damages and attorneys' fees would cause the School Board a loss from a wrongful act, covered by the policy. Accordingly, the court reversed the district court's grant of summary judgment in favor of Franklin Insurance.
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