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July 12, 2012 Uncategorized

District Court Grants Summary Judgment To Insurer In Environmental Property Claims At Gas Station Based On Surface Water And Ground Water Exclusions In Policy

Ahluwalia v. Allied Property and Casualty Ins. Co.
(United States District Court, Eastern District of California, July 5, 2012)

This environmental coverage dispute arises out of a property damage claim in which the policyholder sought coverage for water damage to the underground fuel tanks and fuel pumps at a gas station/convenient mart.

The insurer disclaimed coverage in a written declination advising its investigation revealed that “the below ground wells that house the fuel pump mechanisms were partially filled with water” and that pursuant to the …

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 …

March 9, 2012 CaseWatch

Cases for the March 2012 Edition of CaseWatch: Insurance

Cases provided courtesy of LexisNexis.

Amica v. Fogel

Aspen Square v. Scottsdale

Bay Farms v. Great American

Cumberland County Guidance Center, et al. v. Scottsdale Insurance Co.

Dept. of Health & Human Services v. Florida; NFIB v. Sebelius; Florida v. HHS

Fenn v. Colony Insurance Co.

GC Finance, LLC v. Old Republic National Title Ins. Co.

Grissom v. Welker

Houston Cas. Co. v. St. Paul Fire & Marine Inc. Co.

Indian Harbor Ins. Co. v. Bestcomp, Inc.

International Chemical Corp. v. Nautilus Ins. Co.

Jadick …

December 5, 2011 Environmental

Insolvent Insurer Off the Hook in Benzene Actions

Jones v. Golden Eagle Ins. Co. (Cal. Ct. App. Nov. 28, 2011)

A California appellate court recently ruled that an insolvent insurer was not obligated to share in the defense or indemnity of its bankrupt insured where multiple personal injury claimants failed to comply with the Insurance Commissioner’s directives requiring submittal of a proof of loss.

Several individuals sued Calsol, Inc. and other defendants in separate lawsuits, alleging harm from exposure to Safety-Kleen 105 Solvent, a product used in connection with mechanical repairs. Safety-Kleen 105 …

December 1, 2011 Environmental

Insurer Failed To Establish Applicability Of Pollution Exclusion Involving Construction Debris Disposal

Sierra Recycling & Demolition, Inc. v. Chartis Specialty Lines Ins. Co.

(United States District Court, E.D. California, November 3, 2011)

The issue in this environmental coverage dispute was whether the policy’s pollution exclusion applied to cover alleged losses stemming from the disposal of certain hazardous debris. Specifically, a third party hired plaintiff policyholder to transport construction debris from a demolition site. The policyholder hauled the construction debris from the site to Metropolitan Recycling Center, a private company which is not owned, leased …

October 18, 2011 Uncategorized

Travelers Appeals Order That It is Required To Reimburse For Defense Of Non-Executive Employees Under D&O Policy

Gateway Inc. v. Gulf Insurance Co. et al., S.D. of California, October 14, 2011

On October 14, 2011, Travelers Indemnity Co. filed an appeal with the Ninth Circuit to overturn a ruling that it was obligated to pay attorneys' fees incurred in a securities suit against its policyholder computer company Gateway Inc.’s employees, even though the employees were not directors or officers.

The appeal was of U.S. District Judge William Q. Hayes' August ruling who found that Travelers was obligated to pay the legal fees …

July 5, 2011 Environmental

Partial Summary Judgment Granted To Policyholder Regarding Inapplicability Of Pollution Exclusion

Ruffin Road Venture Lot IV v. Travelers Property Casualty Co. of Amer. (S.D. Cal. June 20, 2011)

In this environmental coverage dispute, the policyholder Ruffin Road, initiated an action to recover the unpaid amounts allegedly owed to it under the policy as well as for attorneys fees and punitive damages based on its claim the insurer acted in bad faith. Specifically, Ruffin Road discovered that a pipe running beneath the property had burst. Mud, rocks, and other debris were sucked into the pipe and circulated …

June 8, 2011 Emerging Issues

Lloyd’s Files Suit to Rescind $17 Million Michael Jackson Policy

At the time of Michael Jackson’s death on June 25, 2009 he was days away from beginning a slate of 30 concerts at the 02 Arena in London. In fact, the first show was scheduled for July 8, 2009.

AEG Live, LLC the company that contracted with Jackson to perform the show obtained a Contingency Non-Appearance and Cancellation policy from Lloyd’s providing coverage in the amount of $17,500,000. The policy listed AEG Live and the “Mark Jones Company, LLC” as insureds. It is alleged that …

May 23, 2011 Reinsurance

Disqualification of Reinsured’s Attorney Matter for Judiciary, Not Arbitrator

Employers Ins. Co. of Wausau v. Munich Reins. Am., Inc. (S.D.N.Y. May 16, 2011)

The district court for the Southern District of New York recently held that the issue of whether a law firm should be disqualified from representing a reinsured where the same law firm represented the reinsurer in a prior matter is one for the judiciary, not the arbitrators. The court found that the law firm was not disqualified from representing the reinsured in a subsequent arbitration because the two matters where not …

May 12, 2011 Reinsurance

Court Grants Motion to Dismiss Breach of Reinsurance Contract Action

Pacific Employers Ins. Co. v. AXA Belgium S.A. (E.D. Pa. April 27, 2011)

In 1978, plaintiff and defendant entered into a reinsurance agreement. Pursuant to the agreement, defendant was obligated to reimburse plaintiff for 5% of a portion of loss and/or loss expense payments made with respect to insurance policies written on plaintiff’s behalf. At the time the agreement was negotiated and entered into, plaintiff was (and still is) a California domiciled insurance company with its principal place of business in California. Defendant was (and …