USA Herald – This is the case of United States Fire Insurance Co. et al. v. Icicle Seafoods Inc. et al., in the U.S. Court of Appeals for the Ninth Circuit.

Icicle Seafoods Inc., a seafood wholesaler headquartered in Alaska, has asked the Ninth Circuit Court of Appeals to reconsider a ruling that found it wasn’t entitled to insurance coverage for losses it suffered during the fishing season.

In this case, the court sided with the insurer, United States Fire Insurance Co. et al., finding that Icicle Seafoods failed to cooperate with a claim investigation, thus barring it from coverage.

The seafood wholesaler had long argued that its policy did not have a specific requirement regarding compliance with its insurers' requests for documentation to support its claim.

Icicle Seafoods Inc. filed its petition for rehearing, challenging a prior appellate decision that found that Icicle Seafoods was not entitled to coverage because it breached the terms of the insurance policy by not providing its insurers with financial documents they requested in order to reconcile the amount of  Icicle 's losses.

The seafood wholesaler said it lost nearly $3.1 million in 2016 and $4.7 million in 2017 during the Alaska fishing season after it claims a blown engine took its fish-processing vessel out of commission.

Icicle Seafoods is represented by attorneys Franklin D. Cordell, Greg D. Pendleton and Miles C. Bludorn of Gordon Tilden Thomas & Cordell LLP.

According to the brief filed by Icicle attorneys, they argue that Icicle had no duty to cooperate with the insurers' requests for documents and that its policy did not have an express cooperation clause.

Icicle argued, that without a cooperation clause, the indirect duty of good faith that policyholders owe insurers does not expand to requests for information and documents.

In its brief for rehearing, the seafood wholesaler wrote "No Washington law supports transforming the policy's coverage grant into a broad and unstated duty to comply with demands for information." It went on to say that "the implied covenant of good faith and fair dealing has consistently been held to apply only where a contracting party has breached a specific contract term."

In 2020, the insurers denied Icicle's claim and later obtained a declaratory judgment action filed in federal court, declaring that Icicle failed to comply with the insurer's requests for financial records and other documents necessary to determine the accurate amount of losses.

In its bid for rehearing, attorneys for Icicle further argued that even if its client did breach a so-called duty to cooperate, the Appellate Court was wrong in finding that the insurers were somehow prejudiced by it not producing the requested documentation.

Nevertheless, Icicle said the insurers eventually obtained the documents they asked for, and that once they did, their valuation of the claim didn't change.