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April 17, 2012 Uncategorized

Settling Insurer Not Absolved of Contribution for Defense Cost

Potomac Insurance Company of Illinois v. Pennsylvania Manufacturers’ Association Insurance Company(Superior Court of New Jersey, Appellate Division, April 13, 2012)

In a case of first impression, the Superior Court of New Jersey held that settlement with the insured of a contested coverage claim did not eliminate co-insurers rights to seek reimbursement for defense costs. In deciding the first case on the issue, the Superior Court adopted the California rule, allowing a direct right of action between co-insurers of the same risk on the basis of …

February 10, 2012 Environmental

Insurer has a Duty to Defend Policyholder for Clean Air Act Violations

Louisiana Generating LLC et al v. Illinois Union Insurance Company, U.S. Dist. Ct. Louisiana, January 30, 2012

In this case, both parties made motions for summary judgment seeking a declaration on the insurer’s duty to defend the policyholder in the underlying suit. The suit was brought by the Federal Government against the policyholder for Clean Air Act violations. The underlying suit alleged that the policyholder, a subsidiary of NRG Energy Inc., made major modifications to a coal plant within notifying the government or obtaining the …

January 18, 2012 Life, Health, Disability & ERISA

Insurer RICO Class Action Suit Filed against Walgreen, Par for Overcharging on Generics

United Food & Comm. Workers Unions v. Walgreen Co. U.S. Dist. Ct., N.D. Ill, Filed Jan. 11, 2012

Insurance companies, self-insured employers, and union health and welfare plans filed the class action in Illinois Federal Court alleging several RICO violations against Walgreen Co. and Par Pharmaceutical Co. for engaging in a scheme to overcharge for generic versions of Zantac and Prozac.

Walgreen and Par entered into a “health resource partnership” under which Par manufactured and marketed generic versions of the drugs Zantac and Prozac in …

November 21, 2011 Emerging Issues

District Court Finds that Obligation to Pay “Claim Expenses” is Inseparable from Duty to Defend

Continental Cas. Co. v. Duckson (N.D. Ill. Nov. 15, 2011)

In a matter of first impression, the district court for the Northern District of Illinois rejected an insured’s argument that his professional liability was obligated to reimburse him for “claim expenses” even though it was not obligated to defend him.

The insured, a partner at a law firm, tendered his defense and indemnity to his professional liability insurer after he was sued by the Securities and Exchange Commission (“SEC”). Specifically, the SEC complaint alleged that …

November 2, 2011 CaseWatch

Cases for the November 2011 Edition of CaseWatch: Insurance

Cases provided courtesy of LexisNexis.

Amco Ins. Co. v. Inspired Technologies, Inc.

Ames Constr., Inc. v. Maxum Indem. Co.

Aroa Marketing, Inc. v. Hartford Ins. Co. of the Midwest

Bridge Metal Indus., LLC v. The Travelers Indemnity Co.

Citizens Ins. Co. of America. v. Uncommon LLC

Cook v. Admiral Ins. Co.

Dragas Management Corp. v. Hanover Ins. Co.

Employers Reinsurance Co. v. Massachusetts Mut. Life Ins. Co.

Feldman Law Group, P.C. v. Liberty Mutual Ins. Co.

Fryer v. Omnicom Media Group

Gabarick v. Laurin Maritime …

October 25, 2011 Environmental

Organic Compound Maker Denied Coverage Based on Pollution Exclusion

Pekin Ins. Co. v. Pharmasyn, Inc. (Ill. Ct. App. Oct. 19, 2011)

An Illinois appellate court ruled last week that a policy’s pollution exclusion barred coverage to an insured organic compound maker for several personal injury lawsuits filed by individuals who either worked for or in the same building as the insured.

Several individuals filed suit against the insured, alleging that they were each occupants of a commercial building in which the insured, a producer of organic compounds, was located. The underlying complaint alleged that …

September 26, 2011 Uncategorized

Antitrust Violations Do Not Amount to “Advertising Injury”

Trailer Bridge, Inc. v. Illinois Nat’l Ins. Co. (11^th Cir. (Fla.) Sept. 19, 2011)

The Eleventh Circuit ruled last week that an insured was not entitled to defense or indemnity from its commercial liability insurer in an underlying antitrust action because the complaint did not allege “personal and advertising injury” within the meaning of the policy.

In 2008, various entities sued the insured for conspiring to fix prices for cabotage services between the United States and Puerto Rico in violation of the Sherman Antitrust …

September 2, 2011 Reinsurance / Reinsurance Review

Cases for September 2011 Edition of Reinsurance Review

Here are the cases from this month's edition of Reinsurance Review.

Harper v. Century

In re Liquidation of Midland

Lexington v. Clearwater

Louisiana Generating v. Illinois Union

Michigan Millers v. Fidelity

US v. Ferguson…

October 24, 2010 Arbitration

District Court Affirms Arbitration Award In Reinsurance Dispute Holding Motion To Vacate Decision Was Untimely And Lacked Merit

R&Q Reinsurance Co. v. American Motorist Ins. Co. (United States District Court, Northern District of Illinois, October 14, 2010)

Petitioner sought to vacate an underlying arbitration award stemming from a reinsurance contract dispute between R&Q and Lumbermens regarding a series of Blanket Excess of Loss Reinsurance Contracts. Lumbermens demanded arbitration against R&Q seeking to recover amounts billed under the contract relating to three claims totaling approximately $1.5 million.

The Panel's Final Award, which it issued on February 5, 2010, closely resembled the draft award Lumbermens …

September 20, 2010 Reinsurance

District Court Declares That Concurrent Lawsuits Between Two Insurers Regarding Enforceability of a Reinsurance Agreement Does Not Present “Extraordinary” Circumstances To Stay Federal Court From Exercising Jurisdiction.

Guaranteed Trust Life Ins. Co. v. American Medical and Life Ins. Co., 2010 U.S.Dist. LEXIS 96382 (N.D. Ill., September 15, 2010)

In 2006, Guarantee Life Insurance Company ("Guarantee"), an Illinois mutual insurance company and American Medical and Life Insurance Company ("American"), a New York insurance company, entered into an agreement whereby American would sell insurance on Guarantee’s policy forms in states where American was not authorized to sell policies. The parties negotiated a reinsurance agreement under which Guarantee Life would reinsure policies sold by American …