Optical Works and Logistics, LLC v. Sentinel Insurance Co., et al.
The United States District Court for the District for Rhode Island’s recent rulings on the parties’ motions in limine can be seen as a win for insured Optical Works and Logistics (“OWL”). The loss involved damage of business personal property and business interruption resulting from a 2011 hurricane that struck Rhode Island. After bifurcating the claims of breach of contract and bad faith, the court granted OWL’s motion in limine, precluding Hartford from defending against the breach of contract claim using any reason except those specifically set forth in Hartford’s Denial Letter, sent back in 2011. In so ruling, the court employed the well settled “Mend the Hold Doctrine”, which limits a contracting party’s defenses for nonperformance to those based on explanations given at the time of nonperformance. The court then denied Hartford’s motion, ruling that OWL’s evidence was not required to be limited in the same way, as insurers are always required to consider new or supplemental information. The court ruled that this obligation does not end at the date the insurer issues a denial letter.