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Appeals Court Backs N.H. School in Suit Over Lost Insurance Policy From 1960s

A federal appeals court has revived a New Hampshire private school's lawsuit seeking to prove that it is still covered by a 47-year-old insurance policy, even though the school apparently lost the paperwork and the insurance company cannot confirm the existence of the policy.

The case involves the Cardigan Mountain School, a 6th through 9th grade day and boarding school in Canaan, N.H. The school is seeking to claim coverage not for a present-day insurance matter but for something stemming from the 1967-68 school year, the year for which the policy is missing.

In 2013, the school received a demand letter asserting a claim based on events that allegedly occurred during the 1967-68 school year.

"We have been given no details" about the nature of the claim, said a May 27 decision by a three-judge panel of the U.S. Court of Appeals for the 1st Circuit, in Boston. 

Court papers say the school contacted the New Hampshire Insurance Co., with which it contends it had a comprehensive liability policy for 1967-68, about covering the claim.

The school could not find its policy for that school year. But it has circumstantial evidence that it had a policy with the insurance carrier for that year, such as records showing it had worked with a local brokerage that had typically recommended New Hampshire Insurance Co. for commercial policies and that the school had coverage with the carrier for several school years before and after the 1967-68 year. 

The insurance company, which is now a unit of New York City-based AIG, told the school that it could not verify coverage for the 1967-68 year and thus the school was not covered. The school sued the insurance company seeking a court injunction to prove it was covered.

A federal district court sided with the insurance company and dismissed the school's suit. But in its decision this week in Cardigan Mountain School v. New Hampshire Insurance Co., a three-judge panel of the 1st Circuit court revived the school's suit.

"This case is not one in which a plaintiff has selected an insurance company at random and filed a declaratory judgment action against it in the hopes that the plaintiff might get lucky and find a policy," the appeals court said, in reference to a practice that is an apparent problem for the insurance industry. 

"The school's complaint instead provides a plausible basis, beyond a mere possibility, for believing that New Hampshire Insurance Company issued the policy in question," the court added. The school's circumstantial evidence does "make a plausible showing" that the insurer issued a policy to the school for the 1967-68 school year, the court said.

"Whether the school can elicit the evidence that will be required to make the more demanding showing the school will need to make as the suit moves forward is, of course, a different question that we need not address in this appeal," the court said.

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