Fifth Circuit: False Imprisonment Caused “Bodily Injury” During Subsequent Policy Periods Sufficient to Trigger Coverage

In a notable deviation from decisions across the country, the Fifth Circuit recently ruled that injuries from false imprisonment could be sustained after the actual false imprisonment itself ended, triggering two insurers’ duty to defend. Travelers Indem. Co. v. Mitchell, No. 17-60291, 2019 WL 2276694 (5th Cir. May 29, 2019).

The insurers, whose policies did not come into existence until after the false imprisonment ended, were found obligated to defend a Mississippi County in a civil rights lawsuit stemming from the wrongful conviction of …

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Massachusetts Court Holds that All Excess Policies are Created Equal

In Massachusetts, competing excess insurance policies will apply equally to provide excess coverage even if one policy is a true excess policy and the other is a hybrid policy that provides either primary or excess coverage depending on the circumstances. See Great Divide Ins. Co. v. Lexington Ins. Co., 2017 WL 4969942 (Mass. Nov. 1, 2017). In a November 1, 2017 opinion, the Supreme Judicial Court of Massachusetts held that the plain language of the insurance policies was the determinative factor in establishing priority of …

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Excess Coverage Means Excess Coverage, Unless it Doesn’t: Texas Court Holds Umbrella Policy is Excess over a Primary Policy that is “Excess by Coincidence”

Not all excess coverage is created equal. Some excess coverage is true excess coverage of last resort. But other times, excess coverage is not. For example, a Texas Federal Court recently ruled that a true excess policy applied as excess over a CGL policy that was excess due to the circumstances of the underlying action.

By way of background, Pace was the real estate manager for the property owner, Dolce. Pace was an insured under Dolce’s CGL policy, with $1 million limits, and its Umbrella …

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Calling all Policies! N.J. Special Master Allocating Costs under Owens-Illinois Implicates Excess Before Primary Exhausts

In The Travelers Indemnity Company v. Thomas & Betts Corporation, No. 13-6187, 2017 WL 3187217 (D.N.J. July 26, 2017), New Jersey’s federal court offers a meaningful example of how trial courts can use a special master to help resolve the tricky issue of allocating defense and indemnity costs involving multiple policies, layers, and years.

In Owens-Illinois, Inc. v. United Ins. Co., the Supreme Court of New Jersey urged trial courts to use a special master with “a substantial measure of discretion” to develop …

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Excess Insurance Does Not Drop Down When Primary Goes Belly Up

Insolvency of a primary insurer represents a tremendous cause for concern for the next layer of excess and umbrella insurers. The Court of Appeals for the Tenth Circuit issued an important and favorable ruling for excess and umbrella insurers last month in Canal Insurance Company v. Montello, Inc., Civil Action No. 14-5039, 2015 U.S. Lexis 20625 (10th Cir. Nov. 27, 2015).

The insured, Montello, Inc., a distributor of oil-drilling products, distributed a “viscofier” – a mud drilling liquid agent – containing asbestos from 1966 …

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Below Limit Settlement Obliterates Excess Coverage

In Martin Resource Management Corporation v. AXIS Insurance Company, an excess insurer was held by the United States Court of Appeals for the Fifth Circuit to have no obligation to indemnify its insured under the terms of its excess insurance policy after the insured settled with its primary insurer for an amount below the primary policy limits.

The insured had sought coverage from both its primary and excess policies for the cost of defending underlying litigation in Texas state court. The primary insurer settled …

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Read the Fine Print: Contingent Coverage is Not Excess Coverage

In Bartowiak v. Underwriters at Lloyd’s, London, 2015 IL App (1st) 133549 (August 31, 2015), the Illinois Court of Appeals ruled that the defendant-insurer did not have a duty to defend or indemnify the plaintiff in underlying wrongful death action pursuant to a contingency liability policy.

On October 31, 2009, a truck delivering road-resurfacing material struck and killed a road-construction worker. The decedent’s wife sued the truck driver, the trucking company, and the truck broker. The truck driver had a $1 million automobile policy. …

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Mississippi District Court Finds Other Insurance Provisions Cancel Each Other Out

In EMJ Corp. v. Hudson Specialty Ins. Co., (2015 U.S. Dist. LEXIS 29781, 14-15, N.D. Miss. Mar. 11, 2015) the plaintiffs, EMJ Corporation and Westchester Fire Insurance Company, brought this declaratory judgment action against Defendant Hudson Specialty Insurance Company. They were seeking a declaration that Westchester was entitled to contribution from Hudson Specialty for the amount Westchester paid on behalf of EMJ in a settlement of an underlying personal injury action.

In partially granting the defendant’s motion for judgment notwithstanding the verdict and denying …

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Missouri High Court Allows Excess Insurer To Proceed with Bad Faith Refusal to Settle Claim Against Primary Insurer

In Scottsdale Insurance Co. v. Addison Insurance Co., No. SC93792, 2014 Mo. LEXIS 335 (Mo. Dec. 9, 2014), the Supreme Court of Missouri reversed the trial court’s grant of summary judgment in favor of United Fire & Casualty Company (United Fire) with regard to the bad faith refusal to settle claim asserted by Wells Trucking, Inc. (Wells Trucking) and Scottsdale Insurance Company (Scottsdale).

The underlying dispute arose from an automobile collision involving a truck driver employed by Wells Trucking that resulted in the death …

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Claim Against Vehicle Owner Key to Umbrella Coverage for Auto Loss Caused by Permissive Driver

In this insurance coverage action, Allstate  appealed from an order granting summary judgment and determining that a permissive user of a motor vehicle was covered under Allstate’s  umbrella policy.

In August 2007, Alana Proctor, the permissive driver of a vehicle owned by Neil Seiden, collided with Melanie Manzo-Pianelli. Seiden had an insurance policy with State Farm that provided $100,000 in coverage and an umbrella policy with Allstate that provided $1,000,000 in coverage. State Farm tendered its policy limits to Pianelli, and Pianelli sought to recover …

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