The doctrine of functus officio typically sets an arbiter’s award in stone: It forbids an arbiter from altering its award after the award has been rendered. But the doctrine has several exceptions. One such exception, known as the clarification exception, allows an arbitration panel to clarify an ambiguous final award. In Gen Re Life Corporation v. Lincoln National Life Insurance, the Second Circuit joined several other circuits in expressly adopting this exception, allowing an arbitration panel to clarify the meaning of its prior interpretation of rescission-clause in a reinsurance agreement. Hunton Andrews Kurth attorneys Syed Ahmad, Patrick McDermott, and David Costello discuss the decision and its implications for policyholders in their recent article, Arbitration of Insurance Disputes: Functus Officio and the Clarification Exception.
The Second Circuit has ruled a claim alleging an “offer for sale” infringed on a patent constitutes an advertising injury sufficient to trigger a defense under commercial general liability insurance. In High Point Design LLC v LM Insurance Corporation, the plaintiff High Point brought a declaratory-judgment action against Buyer’s Direct, Inc. after the latter directed High Point to cease-and-desist in the sale of its Fuzzy Babba slippers. Buyer’s Direct responded with a counterclaim alleging trade dress infringement, claiming that High Point’s offers for sale in retail catalogs infringed on Buyer’s Direct’s own slipper trade dress. Buyer’s Direct sought discovery of all advertising, marketing and promotional materials related to High Point’s fuzzy footwear to substantiate its claims.