Immediate Notice Requirement Defeats Claim
Barry Zalma
Aug 4, 2023
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IHC Construction Companies, LLC (“IHC”) and MA Rebar Services, Inc. (“MA Rebar”), appealed a final summary judgment entered in favor of Westfield Insurance Company (“Westfield”) in Westfield’s declaratory judgment action against IHC, MA Rebar, and Wayne McClure. In Westfield Insurance Company v. MA Rebar Services, Inc., IHC Construction Companies, LLC, and Wayne Kelly McClure, No. 1-23-0161, 2023 IL App (1st) 230161-U, Court of Appeals of Illinois, First District, Fourth Division (July 27, 2023) the Court of Appeals resolved the dispute.
FACTS
In 2016 IHC was the general contractor for a municipal construction project (“the Project”) and that IHC had hired MA Rebar as a subcontractor on the Project. As a condition of its subcontract, MA Rebar was required to obtain liability insurance. In accordance with the subcontract, MA Rebar obtained the required insurance from Westfield and provided IHC with a certificate of insurance confirming such compliance.
Wayne McClure filed a complaint against IHC alleging that he was injured as a result of IHC’s negligence while working on the Project as an employee of MA Rebar. IHC promptly notified its insurance carrier, Hartford Insurance Company, of the suit, but it did not provide any notice to Westfield at that time. In July 2018, IHC filed a motion to dismiss McClure’s complaint. After the circuit court denied the motion in October 2018, IHC filed a third-party complaint against MA Rebar seeking indemnification and contribution.
Approximately three months later MA Rebar notified Westfield of IHC’s third-party complaint against it. Westfield then sued for declaratory judgment seeking declarations (1) that it has no duty to defend and indemnify MA Rebar and (2) that it owed no coverage obligation to IHC due to the six-month delay between the time that IHC learned of the McClure lawsuit and the time that Westfield received notice of the suit.
The circuit court issued a final order granting Westfield’s motion for summary judgment and denying IHC and MA Rebar’s cross-motion.
The focus of the present dispute is IHC’s compliance with a notice requirement in MA Rebar’s insurance policy with Westfield, for which IHC was listed an additional insured. The relevant policy language in this case provides that an insured is required to “[immediately send [Westfield] copies of any demands, notices, summonses or legal papers received in connection with [a] claim or ‘suit.'” ” ‘Immediate’ in this context ‘has been uniformly interpreted to mean within a reasonable time, taking into consideration all the facts and circumstances.'” Zurich Insurance Co. v. Walsh Construction Co. of Illinois, Inc., 352 Ill.App.3d 504, 512 (2004)
The circuit court below determined that IHC’s notice to Westfield was untimely because IHC had not provided a justifiable excuse for its three- to six-month delay in notifying Westfield of McClure’s claim.
IHC failed to provide Westfield with notice of the suit for six months after it received service of the complaint. IHC’s only justification for the delay in providing notice is that it was attempting to negate the need for insurance coverage by seeking dismissal of the case, but that does not justify the delay.
Westfield was entitled to be informed of the suit “immediately,” precisely to allow it to participate in defense actions like motions to dismiss. IHC denied Westfield that contractual right by withholding notice while pursuing the motion to dismiss.
The court concluded that the Insured failed to comply with the terms of an insurance policy notice provision requiring “immediate” notice of any claims when the insurer did not receive notice of a lawsuit against the insured until six months after service of the complaint on the insured.
ZALMA OPINION
The insured tried to reduce its premium, by moving to dismiss without reporting a claim, found itself to be its own worst enemy. Its scheme to save future premium increases resulted only to eliminate its insurance for McClure’s claimed injury and lost over $10 million in available coverage and the unlimited defense costs. Ignorance can be cured but stupid attempts to save insurance premiums is not curable.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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ZIFL Volume 30, Number 2
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5260
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
The Contents of the January 15, 2026 Issue of ZIFL Includes:
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In Katherine Crow Albert Guidry, Individually And On Behalf Of The Estate Of Jason Paul Guidry v. Metropolitan Life Insurance Company, et al, Civil Action No. 25-18-SDD-RLB, United States District Court, M.D. Louisiana (January 7, 2026) Guidry brought suit to recover life insurance proceeds she alleges were wrongfully withheld following her husband’s death on January 9, 2024.
FACTUAL BACKGROUND
Jason Guidry was employed by Waste Management, which provided life insurance coverage through Metropolitan Life Insurance Company (“MetLife”). Plaintiff contends that after Jason’s death, the defendants (MetLife, Waste Management, and Life Insurance Company of North America (“LINA”)) engaged in conduct intended to confuse and ultimately deny her entitlement to...
Failure to Respond to Motion to Dismiss is Agreement to the Motion
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Read the full article at https://lnkd.in/gP52fU5s, see the video at https://lnkd.in/gR8HMUpp and at https://lnkd.in/gh7dNA99, and at https://zalma.com/blog plus more than 5250 posts.
In Mercury Casualty Company v. Haiyan Xu, et al., No. 2:23-CV-2082 JCM (EJY), United States District Court, D. Nevada (January 6, 2026) Plaintiff Mercury Casualty Company (“plaintiff”) moved to dismiss. Defendant Haiyan Xu and Victoria Harbor Investments, LLC (collectively, “defendants”) did not respond.
This case revolves around an insurance coverage dispute when the parties could not be privately resolved, litigation was initiated in the Eighth Judicial District Court of Nevada. Plaintiff subsequently filed for a declaratory judgment in this court.
On or about April 15, 2025, the state court action was dismissed with prejudice pursuant to a stipulation following mediation. Plaintiff states that the state court dismissal renders its ...
Court Must Follow Judicial Precedent
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Read the full article at https://www.linkedin.com/pulse/sudden-opposite-gradual-barry-zalma-esq-cfe-h7qmc, see the video at and at and at https://zalma.com/blog plus more than 5250 posts.
Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
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Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
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He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...