RECENT FEDERAL DECISIONS

March 2004

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Ninth Circuit Holds that Insurer of Underground Storage Tanks Cannot Rescind Policy Retroactively for Misrepresentations
Zurich American Insurance Company v. Whittier Properties, Inc.

The United States Court of Appeals for the Ninth Circuit has held that an insurer may not rescind retroactively an insurance policy covering releases from underground storage tanks, even if the policyholder had made material misrepresentations in the application for coverage. The court based its holding on U.S. Environmental Protection Agency (EPA) regulations governing when and how insurance policies covering underground storage tanks may be terminated.