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Federal Court Dismisses Policyholder’s Third-Party Action Against Reinsurers

A Puerto Rico district court dismissed a third-party action by defendant-policyholder Puma Energy Caribe LLC against the reinsurers of an insurance policy issued by plaintiff Integrand Assurance Co. Puma claimed that the reinsurers breached the reinsurance agreements with Integrand, prejudiced Puma’s rights as a third-party beneficiary of those agreements, and negligently handled reinsurance claims that Integrand submitted in connection with a claim Puma had made under the Integrand policy. The reinsurers sought dismissal based on lack of privity, lack of standing, arbitration clauses in the reinsurance treaties with Integrand, and on the ground that Puma improperly sought to implead them under Federal Rule of Civil Procedure 14(a), which allows a party to implead a nonparty “who is or may be liable to it for all or part of the claim against it.”

While recognizing the reinsurers’ arguments were “powerful,” the court dismissed Puma’s third-party claims on procedural grounds. Because Puma was not seeking “indemnity” from the reinsurers, the court found that Rule 14(a) was not the proper vehicle for obtaining the relief Puma had requested. The court also considered other procedural mechanisms, including Federal Rules of Civil Procedure 13(h), 19, and 20, but found each was inappropriate here as well. The court declined to award the reinsurers’ attorneys’ fees, although it agreed that Puma’s filings “come close to obstinance or frivolity.”

Integrand Assurance Co. v. Puma Energy Caribe, LLC, No. 3:19-cv-01195 (D.P.R. Dec. 27, 2019).

©2011-2020 Carlton Fields, P.A. National Law Review, Volume X, Number 20

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About this Author

Alex Silverman, Insurance lawyer, Carlton Fields
Associate

Alex Silverman represents U.S. and international insurers and reinsurers in complex commercial litigation and arbitration, including complex insurance coverage disputes and reinsurance matters. He regularly litigates and counsels insurers in connection with multimillion-dollar first-party and third-party claims in state and federal courts across the country, and has also litigated large-scale commercial health care and insurance fraud actions on behalf of insurers, including False Claims Act and RICO actions. 

In addition, Alex has experience representing corporations in shareholder...

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