In this era of sophisticated DNA testing, exonerations of incarcerated individuals have become increasingly commonplace. The ensuing malicious prosecution lawsuits have justifiably resulted in high verdicts and settlements. The key issue for many municipalities is whether coverage is triggered for these malicious prosecution claims, and under which policies of insurance. On November 21, 2019, the Supreme Court of Illinois, in Sanders v. Illinois Union Insurance Company, 2019 IL 124565, definitively determined that claims of malicious prosecution trigger coverage only under policies of insurance in …Continue Reading
Florida Bridge Collapse Resolution Offers Workaround for Multiple Claimant Scenarios
A recent bankruptcy plan filed by Munilla Construction Management (MCM)–the general contractor for the failed pedestrian bridge at Florida International University (FIU)–paves the way for judicially recognized interpleader-type scenarios allowing insurers to resolve multiple-claimant incidents where there may be insufficient policy limits. On November 15, 2018, the Southern District of Florida Bankruptcy Court agreed to expedite a process that would allow victims of the pedestrian bridge collapse to start receiving compensation payouts following the creation of a victim’s fund.
By way of background, a pedestrian …Continue Reading
The Pollution Exclusion Can Bar Coverage for Alleged Carbon Monoxide Poisoning Claims
In Foremost Ins. Co. v. Rodriguez, a Pennsylvania federal district denied a motion to dismiss a declaratory judgment lawsuit filed by a liability insurer that sought to disclaim coverage for an underlying lawsuit alleging carbon monoxide exposure.
In the underlying state court lawsuit, tenants sued their landlords, alleging that the landlords refused to repair a heating system, which resulted, ultimately, in carbon monoxide poisoning. After the tenants’ hospitalization, the local gas company deemed the heater on the property unsafe, and instructed the …Continue Reading
Consent Judgments are not Excess Judgments: The Eleventh Circuit Emphasizes the Excess Judgment Rule in Context of Bad Faith
As a general rule, Florida law imposes a duty of good faith on insurers to defend claims against insureds and to settle those claims where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. An insured may, rightly or wrongly, claim an insurer’s conduct in handling a claim falls short of that standard of care. But a claim for bad faith will not accrue until the alleged claims handling results in liability that exceeds the limits of the …Continue Reading
New York Courts Continue to Differ on Interpretation of Primary and Noncontributory Clauses
Most insurance professionals encounter additional insured coverage issues on a daily basis, and priority of coverage is sometimes part of an additional insured analysis. Policies issued by insurance carriers contain primary and noncontributory language on an increasing basis, and that language is sometimes located within a separate endorsement or may be part of the additional insured endorsement. Generally speaking, a primary and noncontributory provision modifies the policy’s other insurance provision to specify that coverage provided under the policy to an additional insured will be excess …Continue Reading
Federal Court Crusades for Serial Comma, Holds No Coverage for Inflatable Beach Ball
When a festival-goer is injured by a flying beach ball, does a general liability insurer have to pay for any ensuing loss? Is the serial comma (sometimes referred to as the Oxford comma) dead? Both questions were addressed by a Florida federal court when deciding who was responsible to pay for a party foul.
In May 2018, Robert Hunt brought a lawsuit seeking compensation for injuries he sustained while attending a festival called Rum Fest 2017. During the event, while a crowd listened to …Continue Reading
Washington High Court Finds that Certificates of Insurance Can Create Coverage
Answering a certified question from the Ninth Circuit, the Washington Supreme Court issued a surprising decision, holding that certificates of insurance can create coverage despite express disclaimers that they do not “amend, extend or alter the coverage afforded by” the policy. This decision is inconsistent with precedent from courts across the country that routinely hold certificates of insurance are informational documents only that cannot supplant the terms of an insurance policy.
In this Washington case, T-Mobile USA, made a demand for additional insured coverage in connection …Continue Reading
Federal Judge Finds Mischievous Raccoons Incapable of Engaging in Vandalism or Malicious Mischief
A federal judge in the Western District of Pennsylvania dismissed a breach of contract and bad faith suit against an insurer by finding that a group of mischievous raccoons was incapable of committing vandalism or malicious mischief.
At issue was substantial interior property damage to a Pittsburgh-area home owned by the plaintiff-insured caused by raccoons. The plaintiff submitted a claim under its named-peril policy for the damage. The insurer denied coverage because the named-peril policy only provided coverage for damage caused by specific causes. …Continue Reading
Insurers’ Pre-Disclaimer Legal Privileges Against Disclosure Still Under Attack
Otsuka America, Inc. and Pharmavite LLC v. Crum & Forster Specialty Insurance Company is the latest in what looks like ongoing erosion of an insurer’s right to rely on attorney-client privilege and the work product doctrine in connection with a determination of insurance coverage.
The insurer denied coverage to the plaintiffs for a nine million dollar product recall loss. The plaintiffs filed this action to resolve the insurance coverage issue.
The court correctly identified the governing law, recognizing that “attorney-client privilege attaches if information …Continue Reading
Unreasonable Expectations: New Jersey Appellate Court Rejects Commercial Insured’s Reliance Solely on Policy’s Declarations Page
- New Jersey courts have been increasingly reluctant to extend the protections of the reasonable expectations doctrine to commercial insureds
- In addition to making the usual policy-based arguments, an insurer facing a coverage action in New Jersey based on the reasonable expectations doctrine should be sure to challenge the sufficiency (or lack) of evidence presented by the insured with respect to its actual expectations of coverage
- New Jersey courts will consider extrinsic evidence to assess whether an insured’s claimed expectations are objectively reasonable
Further …Continue Reading