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August 11, 2025
Piecemeal Litigation is Inefficient and Risks Inconsistent Judgments

Interrelated Acts Constitute a Single Claim
Post 5165

See the full video at https://lnkd.in/geriBpJT and at https://lnkd.in/gJxi77kg and at https://zalma.com/blog plus more than 5150 posts.

In Yonah Rothman v. Complete Packaging & Shipping Supplies, Inc. and Mitchell Mankosa, Complete Packaging & Shipping Supplies, Inc. v. Arch Insurance Company, No. 22-CV-2821-SJB-ST, United States District Court, E.D. New York (August 4, 2025) dealt with the issue of parties seeking a partial judgment to be resolved on appeal.

Complete Packaging & Shipping Supplies, Inc. (“Complete”) and Arch Insurance Company (“Arch”) litigated disputes about coverage in relation to the Rothman employment discrimination action.

THE KEY ISSUES

Background:

Yonah Rothman filed a lawsuit against Complete and Mitchell Mankosa, alleging employment discrimination, underpayment, and wrongful termination. Rothman claims he was retaliated against for participating in a separate lawsuit brought by another employee.
Insurance Coverage Dispute:

Complete sought defense and indemnification from Arch based on their insurance policy. The policy covers conduct between December 5, 2021, and December 5, 2022, and includes an “interrelated claims” provision.
Court’s Decision:

The court dismissed Complete’s third-party complaint seeking defense and indemnity from Arch. The dismissal was based on the finding that the Rothman Actions arose from the same interrelated acts, constituting a single claim made in 2020, which was outside the policy’s coverage period.

Rule 54(b) Motion:

Complete filed a motion for entry of a partial judgment under Rule 54(b) to appeal the dismissal order.

Judicial Concerns:

The court highlighted concerns about the immediate appeal of indemnity issues, which are related to liability and may require the appellate court to address factual issues still being litigated.

ANALYSIS

Complete filed a Third-Party Complaint against Arch, seeking defense and indemnification in the Rothman Action based on an insurance policy between them (the “Policy”). The Policy provides coverage to Complete for conduct between December 5, 2021, to December 5, 2022.

The Policy also contains an “interrelated claims” provision that provides that all claims arising from the same facts are considered a single claim and deemed to have been brought on the date of the earlier claim.

The USDC noted that the employment discrimination actions arose from the same interrelated acts-the alleged retaliation by Complete against Rothman for his assistance with another lawsuit against Complete. Judge Merchant held that the two Actions constituted a single claim made in 2020, outside of the Policy’s coverage. Judge Merchant, therefore, granted Arch’s motion to dismiss.

The USDC concluded that the long-standing policy against piecemeal appeals required that the court’s power to enter such a final judgment before the entire case is concluded. The USDC noted that permitting an aggrieved party to take an immediate appeal, must be exercised sparingly.

Complete offers no alleged hardship or injustice for the Court to consider. Complete seeks judgment on both parts of the Arch dismissal, i.e., a resolution of both defense and indemnity obligations under the contract. The district court certified as final judgments its orders holding the insurers liable to provide a defense and allocating defense costs amongst the insurers. Final judgment was not entered with respect to the insurers’ duty to indemnify, however.

Although indemnity and liability issues are in some sense separate and distinct, they are nevertheless related. Indeed, by its very nature indemnity is collateral to and dependent upon a finding of liability. But even as to defense obligations, there is no blanket requirement that such issues be certified for partial appeal. Rule 54(b) judgment (and appeal) imposes a more demanding standard than the parties’ own assessment that it would be efficient to allow these appeals.

To that end, a defense claim (even against a third-party insurer) must be extricable and separate from the other claims being litigated. Were the Court to certify the dismissal for appeal, the Second Circuit could be forced to make an insurance coverage decision that would be undermined or superseded by a subsequent ruling in the underlying litigation.

Piecemeal litigation is not only inefficient but raises the risk of inconsistent judgments in coverage litigation that is appealed while underlying merits are resolved.

The motion for entry of a partial judgment under Rule 54(b) was denied.

ZALMA OPINION

Insurance coverage disputes are seldom easy. In this case the court found a duty to defend one part of the litigation seeking defense from the insurer, Arch, but found that both cases were based on a single cause that occurred before the Arch policy became effective. Seeking an Appeal of the issue of duty to defend or the duty to indemnify before a decision was made on the one issue sought to piecemeal the appeals, stretching the litigation beyond efficiency, which was properly refused.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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00:08:27
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May 01, 2026
Zalma’s Insurance Fraud Letter – May 1, 2026

Happy Law Day

ZIFL – Volume 30, Issue 9 – May 1, 2026

Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.

THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL

ZIFL – Volume 30, Issue 9 – May 1, 2026

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 and is written by Barry Zalma.

DOJ Creates National Fraud Enforcement Division

Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort

On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...

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April 30, 2026
The Efficient Proximate Cause Doctrine Saves a Claim

When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment

Post number 5345

Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.

In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.

FACTS

American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...

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April 29, 2026
Breach of a Specific Condition Precedent Is a Complete Defense

Breach of a Specific Condition Precedent Is a Complete Defense

See the video at and at and at https://zalma.com/blog plus more than 5300 posts.

In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.

Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).

After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...

00:11:27
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12 hours ago

It is Fraud to Make the Same Claim Twice

Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.

Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages

Post number 5347

No One is Entitled to be Paid for the Same Loss Twice

In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.

BACKGROUND

In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.

PROCEDURAL HISTORY

State Farm filed motion for summary...

post photo preview
12 hours ago

It is Fraud to Make the Same Claim Twice

Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.

Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages

Post number 5347

No One is Entitled to be Paid for the Same Loss Twice

In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.

BACKGROUND

In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.

PROCEDURAL HISTORY

State Farm filed motion for summary...

post photo preview
April 30, 2026
Investigation of First Party Property Claims

What Must be Done after Notice of a Claim is Received by the Insurer

Read the full article at https://lnkd.in/gzvvdkMZ and at https://zalma.com/blog.

Below you will read from this post until you reach the the end of this blog post as the free part of an Excellence in Claims Handling post. To read the full article and receive all articles for members of Excellence in Claims Handling you should consider joining as a paid member to get full access to articles for members only, to our news, analysis, insurance coverage, claims, insurance fraud and insurance webinars, by clicking at the subscription link below.

A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...

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