A federal appeals court on Friday upheld a lower court ruling, ruling that two insurance companies do not have to defend or indemnify an opioid distributor.
Murray, Kentucky-based Quest Pharmaceuticals Inc., a wholesale pharmaceutical distributor, is being sued in about 75 lawsuits for its alleged misconduct in the marketing and distribution of prescription opioids, according to the ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in Westfield National Insurance Co.; Motorists Mutual Insurance Co. v. Quest Pharmaceuticals Inc.
Quest reported the lawsuits to Westfield Center, Ohio-based Westfield National Insurance Co., a unit of Ohio Farmers Insurance Group that had insured Quest from 2015 to 2017, and Columbus, Ohio-based Motorists Mutual Insurance Co., which had insured it since 2004 until 2015.
Westfield and Motorists both filed suit in US District Court in Paducah, Kentucky, seeking declaratory judgments that they had no duty to defend or indemnify Quest in the underlying litigation. The district court ruled in favor of the insurers in almost identical rulings.
The cases were consolidated, and the 6th Circuit affirmed the lower court’s decision on appeal.
Both insurers’ policies provided coverage for damages “due to bodily injury,” according to the three-judge appeals court panel’s ruling.
“Based on the plain language of the policies and their overall context and purpose, we believe the Kentucky Supreme Court would conclude that the insurers have no duty to defend Quest in the underlying lawsuits because they are not seeking damages ‘for bodily injury,'” it was stated in the judgment.
“The claims, all of which are for financial damages, are simply outside the scope of the policy. Because we conclude that there is no duty to defend, there is also no duty to indemnify,” it said.
An insurer’s attorney had no comment, while Quest’s attorney did not respond to a request for comment.