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Vol. 9 - Issue 6
September 23, 2020


This Coverage Dispute Is The Pits






Randy Spencer is in a slump. The guy has let me down for the past several columns. They just haven't been very good. Hopefully he'll break out of it soon. If not, I'll have to consider looking for a replacement.

FYI – I'll remind you that you do not pay for this fine publication. So if you believe that, on account of this slump, you are getting your money's worth from CO, I'm not going to lose any sleep.

The end of summer has arrived. There will be many things to miss about it – especially in February. For me, near the top of the list, is summer fruit. My own grandmother could be granny smith herself, and I'd choose watermelon over any apple she offered me.

Peaches, plums, cantaloupe, corn on the cob. I will miss them all. I know. I know. Corn on the cob is not a fruit. But it is sold in the fruit department. So that makes it a quasi-fruit. And it is something that I'll miss about summer -- so I am including it here.

One of the kings of summer fruit is the cherry. Boy, how great are those red and white ones -- that cost like $12 a pound. They are called Rainier cherries. That's because only Prince Rainier can afford them.

Cherries were recently at the heart of a lawsuit and subsequent coverage dispute. In 2019, Fred Crossman filed a putative class action against four supermarkets in Rockingham County, New Hampshire. In Crossman, and all others similarly situated v. Franx Markets, et al., No 19-2397 (Rockingham Cty. Sup. Ct. Nov. 11, 2019), Crossman alleged that the supermarkets pricing of cherries was fraudulent, as the per-pound price did not specify that it included the inedible pit. Crossman alleged that one-third of the weight of a cherry is its pit. Thus, if cherries were priced as $3 per-pound, they were inflated by $1 per-pound. Crossman alleged that the supermarkets should have included an explanation, next to the per-pound price of cherries, stating that one-third of the weight is for a non-edible portion of the fruit. Crossman asserted all manner of state consumer protection laws, as well as counts for breach of contract and common law fraud against the supermarket defendants.

One of the defendants, Drum Markets, sought coverage for the Crossman action under its commercial general liability policy issued by Live Free or Die Property & Casualty Insurance Company. Live Free or Die disclaimed coverage on the basis that the suit did not seek damages because of "bodily injury," "property damage" or "personal and advertising injury." Rather, as Live Free or Die saw it, the Crossman action alleged only economic losses suffered by the plaintiffs – paying one-third of the price for a pound of cherries that was not for an edible product.

Drum retained its own counsel to defend the Crossman action and filed a coverage action. In Drum Markets v. Live Free or Die Property & Casualty Insurance Company, No 20-1732 (Rockingham Cty. Sup. Ct. Aug. 29, 2020), the court denied Live Free or Die's motion for summary judgment and granted Drum's. Thus, the court held that Live Free or Die owed a defense to Drum's.

The court concluded that the Crossman action did, in fact, seek damages because of "property damage." The complaint alleged that the Crossman plaintiffs suffered a "loss of use of tangible property that is not physically injured," which is one of the definitions of "property damage" in the Live Free or Die CGL policy.

Specifically, as the court put it: "The Crossman plaintiffs paid full price for entire cherries -- but lost the use of them, to the extent that they were not able to eat the portion that was the pit." The court declined to address Live Free or Die's argument that the "Your Product" exclusion applied, as the insurer did not include the exclusion in the disclaimer letter, thereby waiving it.

The court concluded by making the observation that the underlying Crossman suit was outlandish, but that was of no consequence for the insurer's defense obligation, which applies even to groundless, false and fraudulent suits. Nonetheless, the court observed that "the judiciary must act to stem the tide of this abuse."
That’s my time. I’m Randy Spencer. Contact Randy Spencer at

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