Clinton Griggs, an Infant by His Guardian Ad Litem, Summer Griggs and Summer Griggs

Summary

The Supreme Court of New Jersey held that an insurer who, after timely notice of a claim, unreasonably delays informing its insured of a potential disclaimer is estopped from denying coverage, and that the insurer is liable for a settlement made by the insured despite the policy’s ‘no‑action’ provision, allocating the initial burden of production to the insured and the ultimate burden of persuasion to the insurer. Justice Clifford dissented, arguing the settlement was a sham and should be invalidated.