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October 26, 2015 Fraud

Insurer Required to Pay Policyholder Attorneys’ Fees Despite Policyholder Misrepresentations

The Florida Third District Court of Appeal found that an insurer was required to pay attorney fees that homeowners incurred during a coverage dispute despite a finding that the policyholders committed fraud. The Third District affirmed the lower court’s decision, finding that the insurer was required to pay the policyholders’ attorneys’ fees because the insurer lost its counter-claim against the policyholders. The court found that there was no exception for fraud.

In Citizens Property Insurance Corp. v. Bascuas, (Third District Court of Appeal, Florida, …

July 27, 2015 Reservation of Rights

Pennsylvania Supreme Court Holds that an Insurer’s Consent to Settle is Not Required if Insurer Is Defending Under Reservation of Rights

The Pennsylvania appellate courts have kept insurance coverage lawyers on their toes this summer. Weeks after the Pennsylvania Superior Court’s decision in Selective Way Insurance Co. v. Hospitality Group Services, Inc. provided guidance on when the statute of limitations for an insurance coverage declaratory judgment action accrues, on July 21, 2015, the state’s Supreme Court issued its much anticipated decision in Babcock & Wilcox Company v. American Nuclear Insurers.

In Babcock & Wilcox, the Supreme Court held that when an insurer is defending …

July 21, 2015 Emerging Issues

Google ‘Adwords’ Advertisements Trademark Infringement, Not Slogan Infringement

In Auto Mobility Sales, Inc. v. Praetorian Insurance Co., 2015 U.S. Dist. LEXIS 84777 (S.D. Fla. June 30, 2015), the U.S. District Court for the Southern District of Florida held that an insurer had no duty to defend or indemnify its insured against allegations of trademark infringement resulting from the insured’s use of certain language in a Google ‘Adwords’ Advertisement.

Auto Mobility Sales, Inc. (AMS) sells and rents handicap-enabled vehicles. AMS was insured by a general liability insurance policy issued by Praetorian Insurance Company. …

May 14, 2015 Reinsurance

Breach of Reinsurance Contract and Bad Faith Claims Survive Dismissal, District Court Rules

In Old Republic National Title Insurance Co. v. First American Title Insurance Co., 2015 U.S. Dist. LEXIS 44693, the U.S. District Court for the Middle District of Florida refused to dismiss portions of a cedent’s breach of contract claim, bad faith claim, and demand for declaratory judgment against a reinsurer. The reinsurance dispute arose when a cedent negotiated a $41 million settlement with the underlying insured, and the reinsurer paid its portion of the claim under a reservation of rights. After making its payment, …

May 11, 2015 Regulatory

Inquiry Signals Further Federal Regulation of Annuity Product Sales Likely

Late last week, Senator Elizabeth Warren, Ranking Member of the U.S. Senate Subcommittee on Economic Policy, sent a letter to 15 of the top writers of annuity products, including AIG Companies, Allianz Life Insurance Company of North America, AXA, Lincoln Financial Group, New York Life Insurance Company, and MetLife, seeking information about the manner in which these companies compensate their insurance agents for the sale of these products. Warren emphasized that sales made to those close to retirement were of paramount interest and expressed …

April 17, 2015 Uncategorized

Timing is Key in Determining Primary/Excess Obligations for Claims against Multiple Insureds

A recent Eleventh Circuit decision warns of the dangers in handling claims against multiple insureds. In Nova Casualty Co. v. OneBeacon America Insurance Co., (U.S. Ct. Apps., 11^th Cir., Mar. 17, 2015) the district court for the Southern District of Florida granted summary judgment in favor of the primary insurer, finding that although it had breached its duty to defend and indemnify an additional insured in the underlying action, the excess insurer was not entitled to damages because the primary insurer had …

March 13, 2015 Uncategorized

Structural Damage Doesn’t Mean Any Damage to Structure

In Hegel v. First Liberty Insurance Corp., No. 14-10549, 2015 WL 821146 (11th Cir. Feb. 27, 2015), the Eleventh Circuit reversed the district court’s grant of summary judgment for the policyholder, finding that “structural damage” does not mean any “damage to the structure.”

The coverage dispute arose when the insurer First Liberty Insurance Corp. (“First Liberty”) denied the policyholders’ claim for a “sinkhole loss” which their homeowner’s insurance policy defined as “structural damage to the building, including the foundation, caused by sinkhole …

December 4, 2014 Policy Conditions, Considerations, Construction, and Formation

“Test Drive” Ambiguous

In Exotic Motorcars and Jewelry, Inc. v. Essex Insurance Co., a Florida appeals court found the trial court interpreted material policy terms too narrowly in denying coverage of the vehicle collision at issue.

In this coverage dispute, the insured Exotic Motorcars and Jewelry, Inc. (Exotic) sued its insurer Essex Insurance Co. (Essex) to recover its loss from a vehicle collision. The collision occurred while the insured, an exotic car dealer, drove a newly acquired vehicle to another location for inspection. The insured’s policy only …

October 8, 2014 Emerging Issues

TCPA Lawsuit Quacks Again: Courts Continue to Apply Violation of Statutes Exclusion in Favor of Insurers

The Illinois Appellate Court recently modified and reissued an earlier ruling involving an insurer’s duty to defend and indemnify against an underlying TCPA lawsuit. G.M. Sign, Inc. v. State Farm Fire & Cas. Co., No. 2-13-0593, 2014 IL App (2d) 130593 (Modified September 2, 2014). We previously reported on this important decision on May 19, 2014. See, If It Walks Like a Duck and Talks Like a Duck … IL Appellate Court Applies Violation of Statutes Exclusion To Preclude Coverage for Non-TCPA Counts in …

July 29, 2014 Emerging Issues

Eight Million is More Than Enough: Sixth Circuit Orders Excess Insurer to Drop Down and Pay Insured’s Defense Costs

The United States Court of Appeals for the Sixth Circuit recently handed an $8 million defense bill to an excess insurer when the primary carrier denied coverage for an underlying liability claim and settled its liability claim for a mere fraction of the defense costs. IMG Worldwide, Inc. v. Westchester Fire Ins. Co., Nos. 13-3832, 13-3837, 2014 U.S. App. LEXIS 13703 (6th Cir. July 15, 2014).

The coverage dispute arose out of the following circumstances. The primary carrier, Great Divide Insurance Company, issued a …