Malicious Prosecution and Trigger of Occurrence Based Coverage

In Selective Ins. Co. v. RLI Ins. Co., 2015 U.S. Dist. LEXIS 90572 (N.D. Ohio July 13, 2015), a coverage dispute arose after an individual who, following his exoneration from a criminal conviction for rape and murder, sued the municipality who had pursued the criminal case against him. During the relevant time period, the municipality held successive one year policies with two primary insurers and two excess insurers. The first excess policy ran from policy 1997 -1998 and the second ran from 1998-1999.…

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If It Looks Like An Intentional Act And Sounds Like An Intentional Act, Then It Is An Intentional Act

Allstate Insurance Co. v. Tandon, 2015 WL 1395925 (D. Conn. Mar. 25, 2015), involved homeowners and personal umbrella policies issued to the policyholders, Sapna Tandon and Robert Doohan. The policies provided coverage for damages arising from an “occurrence.”

In May 2010, the policyholders were involved in an altercation with Frank and Donna Genna. The Gennas brought suit against the policyholders, in addition to twelve other defendants, for injuries allegedly sustained in the altercation. The Gennas collectively asserted ten causes of action against the policyholders …

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Fourth Circuit Finds “Pill Mill” Action Alleges “Occurrence”

In Liberty Mutual Fire Insurance Co. v. J.M. Smith Corp., 2015 U.S. App. LEXIS 3989 (4th Cir. Mar. 13, 2015), the U.S. Court of Appeals for the Fourth Circuit affirmed that Liberty Mutual was required to defend J.M. Smith Corporation, a wholesale pharmaceutical distributor sued for failing to implement sufficient controls over the distribution of prescription drugs, contributing to a well-publicized prescription drug abuse epidemic in West Virginia caused by excessive prescription drug orders.

The Attorney General of West Virginia sued J.M Smith and …

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No Duty To Defend Malicious Defamation Claims: Eighth Circuit Finds No Coverage Based on Underlying Complaint’s Assertion of Defamation with Intent To Injure

In Sletten & Brettin Orthodontics, LLC v. Continental Casualty Co., No. 13-2918 (8th Cir., Mar. 19, 2015), the United States Court of Appeals for the Eighth Circuit considered and rejected the insured’s argument that its commercial general liability policy’s coverage provisions pertaining to defamation claims were ambiguous and/or illusory. As background, the underlying complaint alleged that one of the underlying defendants posted defamatory messages about a competing orthodontic practice on a Yahoo! Review site while pretending to be the claimants’ aggrieved patients. The underlying …

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PA Supreme Court Clarifies Trigger of Coverage for Injury to Livestock

The Supreme Court of Pennsylvania recently interpreted the trigger of coverage applicable to property damage, including the first manifestation and multiple trigger approaches.  The Supreme Court held in Pennsylvania National Mutual Casualty Insurance Co. v. St. John, 2014 WL 7088712 (Pa. Dec. 15, 2014),  that, under the “first manifestation” theory, an injury triggers coverage under the policy in effect when the injury or damage is discovered, regardless of the insureds’ knowledge to its cause.  Additionally, the court refused to extend the “multiple trigger” theory beyond …

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Nebraska Courts Continue to Reject Faulty Workmanship as an “Occurrence”

In Cizek Homes, Inc. v. Columbia National Insurance Co., 22 Neb. App. 361 (Sept. 9, 2014), the Nebraska Court of Appeals reaffirmed that faulty workmanship does not constitute an “occurrence,” reversing the trial court’s finding to the contrary.

As background, Cizek had purchased a lot, sold the lot to the Riekeses, and constructed a home on the lot.  However, the soil beneath the home began settling and caused damage to the home.  The Riekeses sued Cizek alleging that it negligently designed and constructed the …

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Pennsylvania District Court Finds No Coverage for Faulty Workmanship

In State Farm Fire & Casualty Co. v. McDermott (E.D. Pa. Oct. 14, 2014), a Pennsylvania federal district court recognized the well-established rule in Pennsylvania that faulty workmanship resulting in construction defects is not caused by an “occurrence.”  This coverage dispute arose out of work performed by McDermott at a residential housing development.  After McDermott completed its work on windows and doors, the homeowners discovered water intrusion.  They sued the developer, which, in turn, sued McDermott for negligence and breach of contract.  McDermott sought coverage …

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Insurer Need Not Defend Construction Defect Action Where Alleged Facts Did Not Establish an Occurrence

Steel Supply & Engineering Co. (Steel Supply) sought a declaratory judgment that Illinois National Insurance Co. (Illinois National), its insurer, breached its duty to defend and indemnify.  For the parties’ cross-motions for summary judgment, the critical issue was whether the alleged faulty workmanship resulted in damage to third-party property.  As background, Steel Supply contracted with the City of Carmel, Indiana to erect steel structures in connection with the construction of a performing arts center.  The city discovered defects in Steel Supply’s work and was forced …

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Seventh Circuit Enforces Products-Completed Operations Hazard Exclusion in Faulty Workmanship Coverage Dispute

The Seventh Circuit, applying Illinois law, held that a Products-Completed Operations Hazard exclusion in a commercial general liability policy precluded coverage for a construction defect suit.  The coverage dispute arose out of the alleged faulty workmanship by the developer-insured in connection with a condominium conversion project, which allegedly caused damage to the condominium owners’ personal property.

Following the construction of the condominiums, the condominium owners discovered water damage.  The board of the condominiums ultimately sued the developer, alleging faulty workmanship with respect to the construction …

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Exclusion Does Not Bar Coverage Where Interpreting as Such Would Render Policy Illusory

Piper v. Nitschke’s Northern Resort Condominium Owner’s Assoc., LLC  (Wis. App. November 3, 2009)

A condominium association and two condominium owners were sued by several other owners when the association amended its declaration to allow the defendant owners to use commonly owned areas to expand their condos. The defendant owner’s title insurer disclaimed coverage for the suit based upon an exclusion which it contended precluded coverage for all losses arising in any manner from the bylaws and amendments to the condominium declaration. The appellate court …

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