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September 5, 2019 Uncategorized

Seventh Circuit Holds That Replacement Cost Coverage Requires Aesthetic Matching in Hailstorm Claim

In the latest entry of “matching” jurisprudence under first party property policies, the Seventh Circuit Court of Appeals, acknowledging that jurisdictions have reached conflicting results and applying Illinois law, held that a carrier was required to replace undamaged siding to match the panels replaced due to damage in a hailstorm.[1] In doing so, the court affirmed the Northern District of Illinois’ award of summary judgment in favor of the insured on that issue.

The parties’ dispute arose out of a May 2014 hailstorm that …

May 21, 2019 Bad Faith and Extra-Contractual Liability

Absent Policyholder Demand To Settle, Seventh Circuit Affirms Dismissal of Bad Faith Action Against Insurer After Unexpected Excess Judgment

The Seventh Circuit, applying Illinois law, recently tackled the highly-charged issue of a bad faith claim against an insurer for failing to settle for the policy limit. In Surgery Center at 900 North Michigan Avenue, LLC v. American Physicians Assurance Corp., Inc., the Seventh Circuit closely scrutinized the facts and affirmed the trial court’s decision that the insurer did not act in bad faith.

The coverage dispute arose between the Surgery Center at 900 North Michigan Avenue, LLC (Surgery Center) and its insurer when …

December 14, 2018 General

The Insurance & Reinsurance Report: Year in Review — Why We Think It’s the Best Legal News Blog of 2018

Goldberg Segalla’s Insurance and Reinsurance Report is in the running for The Expert Institute’s Best Legal News Blog of 2018. Fans and readers of the Report and others who stay abreast of developments in the legal blogosphere are invited to vote for the best legal news blog through the following link:

https://www.theexpertinstitute.com/legal-blog/the-insurance-reinsurance-report/

Honored to be in the running and by the support we’ve seen thus far, we took this opportunity to reflect on some of the Insurance and Reinsurance Report’s most notable accomplishments of 2018.…

October 30, 2018 Arbitration / First Party Property / Policy Conditions, Considerations, Construction, and Formation

What on Earth? Court Finds Ambiguous Property Appraisal Award for Earthquake Damage

The U.S. District Court for the Southern District of Illinois recently held that outstanding coverage issues and an ambiguous notation in an appraisal award precluded a finding that an insurer satisfied its coverage obligations. Windsor Oaks, LLC v. Cincinnati Ins. Co., No. 17-CV-689-SMY-SCW, 2018 WL 4303141 (S.D. Ill. Sept. 10, 2018).

The insured, a hotel owner, submitted to its insurer a property claim for earthquake damage. The insurer retained an engineering expert, who determined the hotel did not sustain earthquake damage. Accordingly, the insurer …

October 10, 2018 Other Insurance

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 …

July 6, 2018 General

Insured’s Decision to Manufacture A Dangerous Product Knowing No Insurance Is Available Doesn’t Sway Court To Create An Equitable Exception To The Unavailability Rule

The Supreme Court of New Jersey recently resolved an 18-year-old asbestos coverage row, encompassing 330 policies and thousands of claims. In reaching its decision in Cont’l Ins. Co. v. Honeywell Int’l, Inc., No. 078152, 2018 WL 3130638 (N.J. June 27, 2018), the court confirmed that lex loci contractus is dead in New Jersey for purposes of resolving choice of law issues in contract cases and declined to recognize an equitable exception to the “unavailability of insurance” allocation principle it had announced in its seminal …

June 8, 2018 Policy Conditions, Considerations, Construction, and Formation

A Subpoena May Be a Claim if the Insured says It Is

Whether or not there is coverage under a D&O Policy to pay for expenses incurred responding to a governmental subpoena is a recurring question that nets an inconsistent answer from courts around the country. While the question is often fact specific, an Illinois Federal Court held that a D&O policy provided coverage for expenses incurred responding to a subpoena, and in fact, looked outside of the subpoena itself to make that finding. In Astellas US Holding, Inc. v. Starr Indem. & Liab. Co., Judge …

April 20, 2018 Duty to Defend

It’s not “12 Corners” — Court Holds Answer does not Trigger Duty to Defend

It is a well-known insurance principle that the duty to defend is determined using the “Eight-Corners” method — comparing the four corners of the complaint to the four corners of the insurance policy. A federal court in Illinois recently maintained this principle and declined to extend coverage to an insured based allegations in the insured’s answer, limiting the analysis of the duty to defend only to the facts alleged in the complaint, and not the answer, unless “unusual circumstances” exist.

In the underlying complaint, the …

April 24, 2017 Professional Liability

Frankly, My Dear, I Don’t Give a “Dam”: Seventh Circuit Holds Professional Liability Insurer Off the Hook in Neighborhood Dispute Tangentially Related to Unobtained Dam Permit

In Madison Mutual Insurance Co. v. Diamond State Insurance Co., No. 15-3292 (7th Cir. Mar. 21, 2017), the Seventh Circuit handed down a decision delineating the obligations between a professional liability insurer and a homeowner’s insurer. At bottom, the court refused to hold a professional liability insurer responsible for the defense of a suit that only tangentially referencing the insured’s professional services.

As background, Dr. William and Wendy Dribben purchased a house in 1999 at Heartland Oaks, an exclusive development. The seller of the …

March 16, 2017 Commercial General Liability

Do Not Pass Go, Do Not Collect Hundreds of Thousands of Dollars: Seventh Circuit Parses Through Insured’s Gamesmanship to Find No CGL Coverage for Settlement of Faulty Workmanship Claim

In Allied Property & Casualty Insurance Co. v. Metro North Condominium Ass’n, No. 16-1868, 2017 U.S. App. LEXIS 4107 (March 8, 2017), the Seventh Circuit found coverage unavailable for a settlement of a lawsuit against a subcontractor alleged to have improperly installed windows at a condominium building. The court’s holding, in essence, was that the bases for the settlement were inconsistent with the claims against the subcontractor, and the only such viable claims could not possibly have been covered under the subject CGL policy.…