Attorneys Strom and Regan Victorious in Two Insurance Coverage Appeals to First Circuit
09/09/2025
Regan Strom co-founders Jeffrey Strom and John Regan obtained two insurance coverage victories in the First Circuit this week against insurers for Peterson Oil who were attempting to avoid their coverage obligations to thousands of the company’s customers.
In two separate cases, Peterson Oil’s insurers argued that they were not obligated to provide any coverage to Peterson Oil customers who were alleged to have suffered property damage as a result of Peterson Oil diluting its fuel with large quantities of biodiesel because: (1) when the Plaintiffs filed a Class Action lawsuit prior to one insurer’s coverage period it put Peterson Oil on notice of future customers’ claims; and (2) Peterson Oil intended and/or was substantially certain that its fuel would cause damage.
The First Circuit emphatically rejected both arguments in two separate opinions.
First, with respect to Peterson Oil’s prior notice of customer claims, the First Circuit adopted Attorneys Regan and Strom’s argument that “[k]nowledge of one class of customers’ alleged property damage is not knowledge of a different class of different customers’ alleged property damage. … Service of the class complaint before the policy period began, then, could not have led Peterson’s to ‘know’ about not-yet-existent ‘property damage’ to different equipment owned by different customers.”
Second, with respect to whether Peterson Oil acted intentionally, the First Circuit again adopted one of Attorneys Regan and Strom’s argument, finding that the allegations against Peterson “amount to an assertion that Peterson’s acted recklessly in supplying customers with fuel containing high amounts of biodiesel. Such allegations do not remove the underlying litigation from the ambit of coverage.”
“The First Circuit made clear that, in Massachusetts, insurers must honor their obligations under their insurance contracts, as written, and cannot escape those obligations with semantic arguments,” said Jeffrey Strom. “This is a victory for Peterson Oil’s 15,000+ customers who received fuel during the relevant coverage periods, as well as insureds across the Commonwealth.”
“Regan Strom is proud to have secured these decisions,” continued Mr. Strom, “along with the Class Representatives in the Peterson Oil lawsuit, we will continue to pursue every legal avenue and remedy available to us until all Peterson Oil customers who were harmed have received the compensation owed to them.”
UPDATE October 30, 2025: The First Circuit’s decisions led to a favorable settlement of the Peterson Oil claims
Related Links:
“First Circuit Affirms Insurance Coverage for Heating Oil Suit,” Bloomberg Law
“First Circuit Hands Insurers Another Loss on Heating Oil Case,” Bloomberg Law
“Insurers Forced to Defend Peterson’s in Heated Biodiesel Coverage Fight,” Insurance Business
“Appeals Court Compels Federated Mutual to Defend Biodiesel Class Action,” Insurance Business
