In Lemko Corp. v. Federal Insurance Co., No. 12 C 03283, 2014 U.S. Dist. LEXIS 138667 (N.D. Ill. Sept. 30, 2014), the Northern District of Illinois granted summary judgment in favor of Federal Insurance Company (Federal) and Cincinnati Insurance Company (Cincinnati), finding that they had no duty to defend Lemko Corporation in a business competition and intellectual property infringement lawsuit brought by Motorola. The underlying complaint involved several claims by Motorola against Lemko originating from Lemko accessing “Motorola computers without authorization, or in excess …
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Pennsylvania District Court Finds No Coverage for Faulty Workmanship
In State Farm Fire & Casualty Co. v. McDermott (E.D. Pa. Oct. 14, 2014), a Pennsylvania federal district court recognized the well-established rule in Pennsylvania that faulty workmanship resulting in construction defects is not caused by an “occurrence.” This coverage dispute arose out of work performed by McDermott at a residential housing development. After McDermott completed its work on windows and doors, the homeowners discovered water intrusion. They sued the developer, which, in turn, sued McDermott for negligence and breach of contract. McDermott sought coverage …
Continue ReadingSecond Circuit Holds Insurer Need Not Show Prejudice to Assert Late Notice Where Policy Issued Outside of New York
In Indian Harbor Insurance Co. v. City of San Diego (2d Cir., No. 13-4244-cv, Oct. 2, 2014), the Second Circuit affirmed summary judgment in favor of Indian Harbor, finding based on a late notice defense that Indian Harbor had no duty to indemnify the City for three pollution claims. The main issue was whether New York Insurance Law § 3420(a)(5) applied and required Indian Harbor to prove prejudice as a result of the City’s untimely notice.
The policy in question, a pollution and remediation legal …
Continue ReadingExcess Insurer May Recoup Settlement Payments from the Primary Insurer
In RSUI Indemnity Co. v. American States Insurance Co., No. 14-30033, 2014 U.S. App. LEXIS 18407 (5th Cir. Sept. 25, 2014), the Fifth Circuit Court of Appeals held no adjudicated excess judgment is required for an excess insurer to recoup settlement payments from the primary insurer whose alleged bad faith failure to defend the common insured caused the excess settlement.
In the underlying action arising from an automobile collision, counsel retained by the primary carrier, American States Insurance Co. (ASIC), for the insureds allegedly …
Continue ReadingLack of Authentication of Assignment of Insurance Proceeds Costs Insured Party $1.2 Million
In Warehousing v. Auto-Owners Ins. Co., 2014 U.S. App. LEXIS 18058 (11th Cir. Sept 22, 2014), the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court ruling which held that an insured party’s failure to authenticate a document allegedly transferring the right to $1.2 million in insurance proceeds warranted a grant of summary judgment against it.
Max Warehousing LLC owned a warehouse property insured by Auto-Owners Insurance Company that Max leased to third parties. Embassy National Bank held a mortgage …
Continue Reading‘Close Enough’ Disclosure During Claim Investigation Earns Homeowner Reversal of Coverage Denial Under Fire Policy
In Rose v. State Farm Fire & Cas. Co., 2014 U.S. App. LEXIS 17312 (6th Cir. Sept. 8, 2014), the Sixth Circuit Court of Appeals reversed and remanded a lower court ruling holding an insured was not entitled to coverage under a fire insurance policy because the he had provided false information regarding his financial status in the post-fire claim investigation.
Richard Rose was an Ohio homeowner whose house burned down. State Farm insured Rose through a homeowner’s policy. That policy provided no …
Continue ReadingHigher Deductible Plans Are the New Black and Speaking of Enrollment . . .
With 2014 wrapping up, attention is quickly turning to the benefits enrollment period for 2015 including enrollment for health insurance. A new survey out by Towers Watson, the National Business Group on Health, and PriceWaterhouseCoopers provides a glimpse into how employers are thinking about these benefits. One conclusion is that, for health insurance, higher deductible plans are the new black.
Since the passage of the Affordable Care Act (ACA), one of the big questions is what, if any, impact its passage would have on employer-provided …
Continue ReadingInsured Settles for Less from Insurers, and Excess Coverage Still Must Indemnify: “Ultimate Net Loss Liability” Could Apply to Settlement Amounts with Lower Level Insurers
On Friday, August 29, 2014, the Eleventh Court of Appeals in Texas reversed the trial court’s summary judgment order finding that an excess insurance policy was triggered though the underlying policies had not exhausted their full coverage limit.
Plantation Pipe Line Co. operates pipelines transporting petroleum throughout the southern and eastern United States. In 1990, a leak was found in North Carolina, and Plantation was required to remediate the site. Plantation spent almost $12 million to clean and restore the area. Plantation sought defense and …
Continue ReadingSixth Circuit: ‘Advertising Idea’ Must Involve ‘Plan, Scheme, or Design’ to Bring Public Attention; Standing Alone Customer List is Not a ‘Plan’
On Friday, August 15, The 6th Circuit Court of Appeals upheld an order from the Eastern District of Kentucky, granting Liberty Corporate Capital Limited’s declaratory judgment determining it has no duty to indemnify or defend the plaintiff firearms retailer.
Security Safe Outlet (SSO), a firearms retailer in Kentucky, acquired BudsGunShop.com LLC’s (the website) customer information database through their employee, Matthew Denninghoff, who previously worked in IT for the website. Denninghoff allegedly maintained a copy of the website’s customer database and supplied it to his …
Continue ReadingStanding On Its Own: CT Supreme Court Expands Insurers’ Ability to Sue Another Insurer
In Travelers Casualty & Surety Co. of America v. The Netherlands Insurance Co., 2014 Conn. LEXIS 262, 312 Conn. 714 (Aug. 5, 2014), the Connecticut Supreme Court broadened an insurance company’s ability to sue another insurance company pursuant to the state’s declaratory judgment statute.
The coverage dispute arose as follows. Lombardo Brothers Mason Contractors was hired by the state of Connecticut to perform masonry for the construction of the law library for the University of Connecticut School of Law. The masonry work was performed …
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