Mutual Mistake In Naming The Insured?


By: William Gildea

In a case pending in the United States District Court for the Southern District of Florida, a company not named in an insurance policy is nevertheless demanding coverage based on a claim of mutual mistake over the “named insured” in the policy.  Hallmark Spec. Ins. Co. v. Lion Heart Surgical Supply, LLC, No. 20-CIV-61483-RAR, 2020 U.S. Dist. LEXIS 232612 (S.D. Fla. Dec. 10, 2020). 

Hallmark Specialty Insurance Company (“Hallmark”) contends in its declaratory judgment action that there is no coverage for Lion Heart Surgical Supply, LLC, in a counterfeiting suit against it by Johnson & Johnson, because the Named Insured in the policy is “Lion Heart Surgical Equipment, Corp.” 

But Lion Heart Surgical Supply says that it was supposed to be identified as the Named Insured and filed a counterclaim for reformation of the policy to name Lion Heart Surgical Supply as the Named Insured.  Lion Heart Surgical Supply contends there was a mutual mistake based on evidence that it instructed its broker to correct the Named Insured and received a Certificate of Insurance naming Lion Heart Surgical Supply as the Insured, that the entity “Lion Heart Surgical Equipment, Corp.” never existed, and that Lion Heart Surgical Supply paid the premium from an account named “Lion Heart Surgical Supply.”

Hallmark brought a motion for judgment on the pleadings based on the facts that “Lion Heart Surgical Supply” was not named on the policy and that the broker gave written instructions to Hallmark to name “Lion Heart Surgical Equipment Corp.” as the Named Insured.

The court denied Hallmark’s motion for judgment and concluded that more discovery and extrinsic evidence were “necessary to establish whether there was a mutual mistake.”  Id. at 7.  The court said that Hallmark “has not established that reformation of the Policy would be precluded in this case.”  Id. at 5.  “Courts have recognized that the concept of reformation applies where the named insured in an insurance contract does not ‘accurately reflect the mutual intent of the contracting parties as to who was to be designated a named insured.’”  Id. at 6.  “Whether any mistake occurred is a question of fact that requires evidence of the parties’ intent at the time of the agreement — and the facts on the face of the pleadings are inconclusive on this issue.”  Id. at 7. 

We will be watching this case as the evidence unfolds to see whether the fact that the insurer followed the explicit instructions of the broker carries the day.

For more information, please contact Bill Gildea at