Category: Emerging Issues

Emerson Enterprises, LLC v. Hartford Accident & Indemnity Co.
(2^nd Cir., September 5, 2013)

This coverage action arises from a dispute as to whether an insurer must provide coverage for proceedings brought by the New York State Department of Environmental Conservation related to the intentional discharge of pollutants into a dry well.

The policyholder agued that the district court erred in ruling for the insurers based on the pollution exclusions in each policy.  One policy included an exception to the pollution exclusion for “sudden …

The New York Court of Appeals granted a rehearing of a coverage decision that has wide ranging implications for the insurance industry. In K2 Investment Group LLC v. American Guarantee & Liability Insurance Co., decided on June 11, 2013, the Court of Appeals rejected American Guarantee’s argument that it was entitled to a trial over whether a policy exclusion applied after it had breached its duty to defend. In new found precedent, the Court of Appeals held that because the insurer had breached its …

Federal Insurance Company et al., v. MLB, Inc.
(Case No. H036296) (Ca. App. Ct., August 26, 2013)

A California appellate court affirmed a lower court’s decision that insurers’ selection of counsel to defend its insured, under a reservation of rights, created no conflict of interest to the insured’s detriment.

Specifically, the insured was a supplier of dry cleaning chemicals and products and was sued in a third-party action concerning costs for monitoring and remediation of contamination.  The insured tendered the defense and indemnity of the …

Servedio v. State Farm Insurance Co.
U.S. Court of Appeals for the Second Circuit.

The plaintiff, Dominick Servedio, commenced a class action against the defendant, State Farm Insurance, raising claims of deceptive trade practices and false advertising, in violation of New York General Business Law §§ 349, 350 and common law fraud. The plaintiff’s § 350 and common law fraud claims were dismissed by the district court in September of 2011 with only the § 349 claim allowed to proceed. The district court subsequently dismissed …

This insurance coverage dispute stems from an underlying action concerning the allegedly negligent work by a concrete subcontractor during a shopping mall expansion project. The property insurer, Navigators Insurance Company (Navigators), and the excess insurer, National Union Fire Insurance Company of Pittsburgh (“National Union”), move for summary judgment on the issue of insurance coverage for the water damage.

Navigators, as the property insurer, argued that the requirements to trigger payment by National Union on the excess policy were met as the primary Zurich policy was …