Public Service Mutual Insurance Company v. Lee Cohen

OPINION OF THE COURT

WEIS, Circuit Judge.

In this diversity case, plaintiff insurance company seeks reimbursement from its agent, alleging that he failed to notify an insured that certain of its employees would be excluded from coverage under a policy, and as a result the company had to pay a claim. The district court invoked collateral estoppel against the plaintiff because a Maryland court had determined that the carrier’s contemporaneous audits of its insured’s records and ensuing collection of additional premiums barred a disclaimer of coverage. Because the Maryland judgment does not…