2nd Cir. Upholds Dismissal of Breach of Contract Action Against Zurich

NEW YORK — A federal appeals court has upheld dismissal of a breach of contract action filed against Zurich American Insurance Co. by its policyholders, affirming that the insurer was authorized under the policy to settle a coverage claim filed by a third party.

In a Dec. 6 summary order, the 2nd Circuit U.S. Court of Appeals also upheld dismissal of the policyholders’ contractual and statutory bad faith claims, finding Zurich did not act “arbitrarily or unreasonably” so as to “frustrate the fruits” of the policy.

Zurich issued a commercial general liability policy to construction companies Keller Foundations LLC and …