Category: Policy Conditions, Considerations, Construction, and Formation

Scottsdale Ins. Co. v. Bounds, United States District Court for the District of Maryland, March 8, 2013

The defendant business procured commercial auto and excess policies from the plaintiff insurer through a premium finance company. The policies expressly provided that the insurance would be provided in return for the payment of policy premiums. The insured made the initial premium payments but failed to make subsequent premium payments to the premium financing company. The policies were therefore cancelled and the premium finance company notified the insured …

The National Football League is now 0-2. It lost yet another round on the legal gridiron last week when New York State Supreme Court Judge, Jeffrey K. Oing, ruled that the lawsuit between the NFL and its insurance companies could proceed in NY.  This is despite the fact that the NFL filed a similar lawsuit in California first. This echoes a previous ruling by Los Angeles Superior Court Judge John Shepard Wiley Jr. who held last fall that California was the wrong venue to deal …

Am. Safety Indem. Co. v. T.H. Taylor, Inc., et al., (Index No. 11-12245) (11th Cir.)

In a majority decision, the Eleventh Circuit endorsed the use of evidence extrinsic to an arbitration complaint for the purpose of determining an insurer’s duty to defend.  In Am. Safety Indem. Co. v. T.H. Taylor, Inc., et al., (Index No. 11-12245), the insurer issued a CGL policy to a general contractor who was hired by certain land owners to construct a residence on their behalf for around $760,000.  After …

Francis v. Allstate Ins. Co. (4th Cir. (Md.) Mar. 7, 2013)

 The Fourth Circuit recently held that the amount of attorney’s fees sought by an insured in a declaratory judgment action should be included in the calculation to determine whether an insurance coverage case satisfies the amount-in-controversy requirement under the federal removal statute.

In 2008, the insured, a California resident, and her minor son were sued in the Maryland state court. The claimant worked as a resident aide at the Maryland School for the Deaf …

An intermediate appeals court in Florida held that an insurer’s decision to refuse separate independent counsel for an additional insured (AI) was wrong and awarded the AI indemnification for attorney’s fees and costs for independent counsel.  In University of Miami v. Great American Assurance Company, etc., (No. 3D09-2010, Florida Third District Court of Appeal), the insured ran a summer swim camp on the AI’s campus.  The claimant sued both entities for lack of supervision, claiming bodily injuries from being pulled unresponsive from the …

Mitsui Sumitomo Ins. Co. ofAmericav. Duke University Health Sys. No. 11-2057, United States Court of Appeals for the Fourth Circuit. February 11, 2013
The Fourth Circuit held that Duke University Health System was limited to policy limits for one occurrence when a mishap occurred where surgical instruments were sterilized with elevator hydraulic fluid. The facts of the case involve elevator workers placing hydraulic fluid into buckets distributed to them by Duke University, which had originally stored surgical detergents. Duke employees then used the hydraulic fluid …

Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Seagate Tech. Inc.
U.S.Dist. Ct.,N.D.Cal.

A California federal judge recently held that an insurer did not breach its contract when it stopped defending a policyholder based on a trial court declaratory judgment ruling that was later overturned.

The court explained that in the ordinary case, the duty to defend terminates upon a judicial determination that the insured does not have a potentially-covered claim. The decision granting summary judgment became such a judicial determination when judgment was …

Cincinnati Insurance Co. v. Devon International, Inc. et al. (E.D.Pa) (Index No. 2:11-cv-05930-GP)

A federal court in Pennsylvania limited the number of occurrences under a CGL policy for injuries caused by defective drywall. The case involved a sourcing agent for Chinese products who filled an order for drywall by purchasing them from a Chinese drywall manufacturer and shipping them to Florida. The drywall contained an improper amount of sulfur damaging real and personal property.

Although there were two separate consecutive policies at issue, the insurer …

On Friday, President Barack Obama’s administration proposed a rule which would modify the Affordable Care Act’s Contraception Mandate to allow religious organizations to opt-out of directly providing contraceptives to its employees. The contraception mandate, which went into effect January 1, 2013, requires most private companies and employers to offer health services, including contraception services to their workers. The contraception rule had prompted many lawsuits whereby religious organizations brought suit against the federal government seeking injunctions and temporary restraining orders in anticipation of the inception …

The Netherlands Ins. Co v. Main St. Ingredients et al. (Index No. 11-533)
In testing the limits of coverage for recall of food products, the federal district court of Minnesota found in favor of an insured for claims related to “property damage” despite the uncontroverted fact that the recalled product was not contaminated.

In The Netherlands Ins. Co v. Main St. Ingredients et al. (Index No. 11-533), insured purchased instant milk from a third-party and subsequently sold it to another third-party who subsequently mixed it …