In Mount Vernon Fire Ins. Co. v. VisionAid, Inc.,
No. 15-1351P2-01A (1st Cir. Nov. 15, 2017), the First
Circuit Court of Appeals ended long-running insurance coverage
litigation arising from policyholder VisionAid, Inc.'s
termination of a former vice president, Gary Sullivan. Sullivan
sued his former employer, alleging age discrimination. VisionAid
tendered the claim to its employment practices liability insurer,
Mount Vernon Fire Insurance Company. Mount Vernon initially agreed
to defend VisionAid, but under a reservation of rights. However, it
later revoked that reservation, and agreed to fully defend and
indemnify VisionAid.
Mount Vernon appointed defense counsel to defend the age
discrimination claim. Defense counsel filed an answer and
affirmative defenses, including that Sullivan was terminated for
poor performance, insubordination, and embezzlement. In the course
of the state court litigation, Sullivan agreed to drop his age
discrimination claim, if VisionAid
