First Party Property Archives - The Insurance & Reinsurance Report

March 7, 2019 First Party Property

Denied Times Two: Prejudicial Late Notice and Contractual Limitation Period Both, Separately, Doom First Party Claim

Finding the prejudice from the insured’s late notice was manifest, a federal district court in Connecticut dismissed, with prejudice, a first-party coverage action brought by an insured against her homeowners’ insurer, Allstate Insurance Company. Ruling that the insured’s reporting of the claim to the insurer 14 months after the loss was a material breach of the policy’s notice provision that prejudiced the insurer, the court also concluded that the insured’s action was separately barred by the policy’s 18-month suit limitation provision. See Discuillo v. Allstate …

What on Earth? Court Finds Ambiguous Property Appraisal Award for Earthquake Damage

The U.S. District Court for the Southern District of Illinois recently held that outstanding coverage issues and an ambiguous notation in an appraisal award precluded a finding that an insurer satisfied its coverage obligations. Windsor Oaks, LLC v. Cincinnati Ins. Co., No. 17-CV-689-SMY-SCW, 2018 WL 4303141 (S.D. Ill. Sept. 10, 2018).

The insured, a hotel owner, submitted to its insurer a property claim for earthquake damage. The insurer retained an engineering expert, who determined the hotel did not sustain earthquake damage. Accordingly, the insurer …

August 21, 2018 First Party Property

A Primer On Appraisal in Florida First-Party Property Damage Claims

In the wake of Hurricane Irma and other recent natural disasters, Florida courts have weighed in on one of the most important tools for resolution of first-party property damage claims: appraisal. In this post, we will address multiple appraisal issues and how courts have ruled recently on those issues.

Failure to Timely Invoke Appraisal May Constitute Waiver

In Versailles Sur La Mer Condominium Assoc., Inc. v. Lexington Ins. Co., 2018 WL 3827154 (M.D. Fla. Jul. 24, 2018) the insured, a condominium association, submitted a …

March 29, 2018 First Party Property

No Attorney’s Fees for Insured in Suit Relating to Selection of an Umpire for Appraisal for Florida First-Party Property Claims

In a recent first-party coverage claim, an insurer invoked its homeowner’s policy’s appraisal provision pre-suit when the parties could not agree on the scope of loss. The appraisal provision required both parties to select an appraiser, who were in turn required to agree mutually upon a neutral umpire for appraisal. The policy’s appraisal provision stated further that in the event the appraisers could not agree upon a neutral umpire, either party could initiate a legal action to request that the court appoint an umpire. When …

March 10, 2017 First Party Property

Illinois Coverage Litigations Beware! Attorney’s Failure to Properly Investigate Results in Severe Sanctions

In American Access Casually Co. v. Alcauter, 2017 IL App (1st) 160775, the Illinois Appellate Court, First District, affirmed the district court’s imposition of sanctions against the plaintiffs, American Access Casually Company (AACC) and its coverage counsel, James Newman, pursuant to Illinois Supreme Court Rule 137. Specifically, the Appellate Court held that there were sufficient grounds to uphold the sanctions because of the plaintiffs’ failure to properly investigate the continuing validity of their lawsuit, their failure to turn over pertinent information, and their proceeding …

January 26, 2016 First Party Property

Which Came First? Turns Out, It May Not Matter. Illinois Appeals Court Weighs in on Anticoncurrent-Causation Clause for the First Time

For the first time, an Illinois court addressed an anti-concurrent causation clause. In Bozek v. Erie Ins., 2015 IL App.(2d) 150155 (Dec. 17, 2015) , an Illinois appellate court held a homeowner’s insurance policy’s anti-concurrent causation clause precluded coverage because an excluded event, hydrostatic pressure, contributed to a single loss (the lifting of a pool out of the ground). The plaintiffs incurred damage to their in-ground swimming pool after a heavy rain storm. The large amount of rain saturated the soil, producing significant uplift …

November 10, 2015 First Party Property

You Can’t Keep it Bottled Up: Defective Bottle Cap = Defective Bottled Product

The Appeals Court of Massachusetts held that a first-party property policy’s ensuing loss provision did not restore coverage for the non-defective contents of a bottle rendered unsaleable by defective bottle caps. Since the product contained in the bottle could not be separated from the defective bottle cap, the whole product was defective and excluded from coverage.

In 2008, a manufacturer entered into an agreement with a company to manufacture a milk-based shelf-stable protein drink designed to require refrigeration only after the bottles are opened. To …

September 24, 2015 First Party Property

Entrust Me, Man: Landlord’s Due Diligence in Screening Tenant Results in Application of “Entrustment Exclusion” For First-Party Claim Arising Out Of Marijuana Operation

In United States Specialty Insurance Co. v. Barry Inn Realty, Inc., 2015 U.S. Dist. LEXIS 119450 (SDNY September 8, 2015), a federal judge for the Southern District of New York granted a commercial property insurer summary judgment finding no coverage for a claim of extensive property damage caused by a marijuana-growing operation conducted by the policyholder’s tenant.

The policyholder leased the subject premises to the tenant for the purposes of operating a bar/restaurant. Prior to executing the lease, the policyholder did a background check …

May 21, 2015 First Party Property

Anti-Concurrent-Causes Clause Bars Coverage When One Cause is Excluded

In JAW The Pointe, L.L.C., v. Lexington Ins. Co., 2015 WL 1870054 (Tex. April 24, 2015), the Texas Supreme Court found an insurer did not violate the Texas Insurance Code and the Texas Deceptive Trade Practices Act by denying coverage where the damages in question were caused in part by flooding, a cause excluded by the policy.

JAW The Pointe purchased an apartment complex in Galveston, Texas in 2007, only 14 months before Hurricane Ike struck. The complex sustained significant damage – estimated at …

August 6, 2009 First Party Property

Eight Circuit Allows General Contractor’s First-Party Property and Bad Faith Claims to Proceed Against Hyatt’s Insurers

Weitz Company, LLC v. Lloyd’s of London

(8^th Cir. (Iowa) Aug. 4, 2009)

Hyatt retained the plaintiff firm to act as general contractor to build a luxury retirement community in Florida. Severe rains caused extensive water damage to the work site in June 2002. The contractor immediately took steps to repair the damage and, in November 2002, notified Hyatt representatives that it wished to submit a claim to their commercial property insurers, which covered all of Hyatt’s real and personal property. Hyatt notified its …