Carolina Casualty Insurance v. Nanodetex Corporation

HARTZ, Circuit Judge.

A few years ago the New Mexico Supreme Court recognized a new tort called “malicious abuse of process,” which subsumed the traditional causes of action for malicious prosecution and abuse of process. Nanodetex Corporation and two of its principals (the Insureds) were successfully sued for malicious abuse of process. They then sought indemnification from Carolina Casualty Insurance Company, which covered the Insureds under a management liability policy (the Carolina Policy). Carolina denied the claim, relying on an exclusion in the policy for losses arising from claims for…