Ken's Foods, Inc. v. Steadfast Insurance Co., No. 21-1649 (1st Cir. 2022)
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The First Circuit certified to the Massachusetts Supreme Judicial Court (SJC) a question regarding whether Massachusetts recognizes a common-law duty for insurers to cover costs incurred by an insured party to prevent imminent covered loss.
Ken's Foods incurred extensive losses from an accidental discharge at one of its processing facilities caused wastewater to enter Georgia waterways. Ken's Foods filed a claim with Steadfast Insurance Company seeking clean-up expenses and business losses resulting from a "pollution event" that cause a "suspension of operations." When Steadfast refused to reimburse Ken's Foods for the cost of its prevention efforts Ken's Foods sued in Massachusetts federal court. At issue was whether Ken's Foods could recover from Steadfast the costs it incurred to avoid suspending its operations after the pollution discharge. The district court granted summary judgment for Steadfast. The First Circuit concluded that certification was necessary and certified to the SJC the issue.
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