Insurance Corp. Seeks to Rescind Umbrella Policy with Importer of Salmonella-Contaminated Fish

Golden Eagle Insurance Corp. has filed a complaint for declaratory relief against its insured Moon Marine (U.S.A.) Corp., requesting that the umbrella policy it issued to the insured be rescinded because Moon Marine allegedly concealed material facts when it obtained the policy. Golden Eagle Ins. Corp. v. Moon Marine (U.S.A.) Corp., No. 12-5438 (N.D. Cal., filed October 22, 2012).

According to the complaint, Moon Marine knew that its imported yellowfin
tuna (scrape) was linked to a nationwide Salmonella outbreak that sickened
more than 400 individuals and had, in fact, recalled the product, when the
$2-million excess insurance policy was obtained. The plaintiffs allege that
Moon Marine failed to inform the insurance carrier’s underwriter that the
fish importer faced “obvious liability exposure for bodily injury claims from
the nationwide salmonella outbreak that had been linked to Moon Marines’
importation of Scrape.” The first lawsuit was actually filed two days before the
plaintiffs quoted and bound the excess policy.

The insurance companies allege that they have “assumed the defense of
all tendered suits filed against Moon Marine arising from the salmonella
outbreak, which are presently pending in three or more states. Additional
suits have been threatened to be filed in other states.” They seek a declaration
that the Golden Eagle Excess Policy has been rescinded ab initio and that
the single occurrence limit of $1 million applies rather than the $2 million
aggregate limit.