In the wrongful death case for Lee Lindemann, filed on behalf of the Estate of Sue Ann Lindemann, the U.S. District Court ruled that estoppel blocked National Fire & Marine Insurance Co. from invoking a “declining balance” provision in its insurance policy. This was done to reduce its $1 million liability limit to $600,000, by subtracting the $400,000 National paid to the defense expenses during the two years of litigation.
National’s policy covered Dr. Erick Falconer in this wrongful death case and another defendant, Western Healthcare. In May 2013, the answer that Falconer’s attorney submitted to “Interrogatory 9,” said he was insured under a National policy that had a $1 million liability limit.
But when responding to her request for a copy of the insurance policy, Dr. Falconer’s attorneys reportedly took a shortcut: they referred back to this interrogatory answer. This maneuver meant the litigants didn’t see the policy provision that ordinarily would have reduced the liability limit by the amount of defense expenditures.