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Appeals court hears dispute over notice and prejudice in Central Mutual v. G & G Builders
Summary
Counsel disputed whether G & G provided timely notice to Central Mutual of claims tied to Stone by Lynch's work. Central argues the insurer was prejudiced because key subcontractor records were destroyed in a 2015 fire; G & G counters that it had constructive notice and that a reasonableness inquiry is for the factfinder.
Michael Schultz, arguing for Central Mutual Insurance Company, told the panel that the notice provision in the Central policy is enforceable unless there was a misrepresentation on the certificate of insurance or detrimental reliance under Marlin. "On 06/12/2014 G and G had everything it needed to put Central on notice," Schultz said, arguing that G and G had the certificate with policy number and agent contact and therefore could have notified Central earlier.
Counsel for G and G responded that the reasonableness of notice depends on when the claimant's allegations were known and that evidence, including daily logs and the timing of expert disclosures, shows the matter crystallized later. Central stressed prejudice: records from Stone by Lynch that would have clarified the timeline were destroyed in a February 2015 fire, and delayed notice denied the insurer the opportunity to investigate while records and witness memories were fresh. The panel tested both sides about whether reasonableness should be resolved by a jury or on a legal record; the appeal was submitted after argument.
