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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South Carolina High Court Allows Malpractice Claim by Insurer Against its Assigned Defense Counsel

Early March, in a narrow, carefully worded opinion, a divided Supreme Court of South Carolina ruled that a liability insurer may sue an attorney it retained to defend its insured where the attorney’s breach of its duty to the insured proximately causes the insurer damage. The decision adds South Carolina to the growing list of states that recognize a malpractice cause of action by an insurer against its assigned defense counsel. See Sentry Insurance Co. v. Maybank Law Firm, LLC, — S.E.2d —, 2019 WL 1119977, at …

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Illinois Appellate Court Reverses Course on Trigger for Malicious Prosecution Claims

An Illinois Appellate Court established a new rule for when malicious prosecution occurs and triggers coverage under a liability policy. In Sanders v. Illinois Union Insurance Company, the court determined that the triggering event for malicious prosecution coverage is the claimant’s exoneration, rather than the initiation of the alleged malicious prosecution. The rule established in Sanders is in direct contrast with a number of Illinois decisions, including several in the past few years that had held that the commencement of the malicious prosecution was …

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NY Court Clarifies Pleading Standard for “Consequential Damages” in Coverage Litigation

The Appellate Division of New York’s Supreme Court, First Department, recently overturned a trial court’s dismissal of an insured’s claim for consequential damages on a pre-answer motion to dismiss.  While the decision sheds light on the degree of specificity required at the pleading stage to sustain an insured’s claim for consequential damages, it does little to clarify the level of proof required to prevail on such claim at trial.      

The coverage dispute among the parties in D.K. Property, Inc. v. National Union Fire Insurance …

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The Duty to Defend Additional Insureds in Post-Burlington New York

Anyone with a connection to the insurance coverage world in New York knows about the New York Court of Appeals 2017 decision in Burlington Ins. Co. v. NYC Transit Auth., 29 N.Y.3d 313 (2017), which held that “where an insurance policy is restricted to liability for any bodily injury ‘caused, in whole or in part’ by the ‘acts or omissions’ of the named insured, the coverage applies to injury approximately caused by the named insured.”  At the time the decision was rendered, it was …

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UM Insurer Loses the Form Battle But May Yet Win the Coverage War

In GEICO Indem. Co. v Perez, 2018 WL 4495557 (Fla. Dist. Ct. App. 2018), not only was Geico Indemnity Company and Geico General Insurance Company (collectively GEICO) forced to go to trial against their insured because the trial court denied GEICO’s motion for summary judgment on the issue of whether the insured was entitled to uninsured/underinsured motorist (UM) coverage but the jury also found that the insured had been severely injured due to the negligence of an un insured motorist, entitling him to UM …

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Timing a Petition to Remove

It’s no secret the federal court is the preferred forum for litigating insurance coverage issues. When considering whether to remove, one factor to always consider is whether any defendant is a citizen of the State in which the action will be brought. Should that be the case, the Forum Defendant Rule dictates that the matter is no longer removable once the forum defendant has been properly joined and served. How does this impact a yet-to-be served forum defendant who is keen on removing? A Pennsylvania …

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Just the Fax: New Jersey Rules that Actual Property Damage is Required for Violation of the Telephone Consumer Protection Act

Proof of a violation of the Telephone Consumer Protection Act (TCPA), without corresponding evidence of either “physical injury to tangible property” or “loss of use of tangible property,” is not enough for an insured to establish that the claims against it alleged “property damage” under a CGL policy, according to the New Jersey Appellate Division’s recent decision in Penn National Insurance Company v. Group C Communications, Inc., 2018 WL 3625424 (N.J. App. Div. July 31, 2018).  In Group C Communications, the Appellate Division …

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Waiver Rears its Head: Equitable Subrogation Against “Other Insurance” Waived by Failure to Preserve Rights

Questions of “other insurance” arise whenever two or more insurers could provide coverage for a claim against a common insured. If one insurer is put in the position of settling a claim when other insurers who may also owe coverage do not contribute, reserving and pursing rights against other insurers should never be an afterthought. An insurer recently learned this lesson when it failed to assert rights against another insurer before agreeing to provide coverage for the settlement of a defamation lawsuit against well-known attorney …

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Failure To Plead That Excess Liability Policies Were Implicated Leads To Dismissal Of Third Party DJ Complaint

In this declaratory judgment action, the court held that defendants Travelers Indemnity Company  and Travelers Casualty and Surety Company  (Travelers) had a duty to defend its insured Chicago Pneumatic Tool Company (Chicago Tool) for silica- and asbestos-related claims, prompting Traveler to file a second amended third party complaint against Chicago Tool’s other insurers, AIU Insurance Company  (AIU), Century Indemnity Company (Century Indemnity), Liberty Mutual Fire Insurance Company (Liberty Fire), Trygg-Hansa Insurance Company, Ltd. (Trygg-Hansa), and Industria Insurance Company (Industria).  In response to the complaint Industria …

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