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In this case, Philadelphia Federal Judge Darnell Jones granted summary judgment to the insurer on coverage. He found no coverage due under a custom cargo policy or charter’s legal liability policy. The case involved an agreement to ship 300,000 metric tons of road salt from South America, where the shipment was halted by local customs authorities in South America, preventing delivery.

Summary judgment was then granted against the insured, on its bad faith claim. After stating the elements for statutory bad faith, Judge Jones states:

Because this Court has determined Plaintiff is not entitled to insurance coverage as a matter of law, Plaintiff’s claim for bad faith necessarily fails. Inasmuch as Defendant had a “reasonable basis” for denying coverage, Plaintiff’s motion for summary judgment on its bad faith claims must be denied.

Date of Decision: March 31, 2022

CHEMICAL EQUIPMENT LABS, INC. v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, U.S. District Court Eastern District Pennsylvania No. CV 19-3441, 2022 WL 990893 (E.D. Pa. Mar. 31, 2022) (Jones, J.)