Various homeowner’s insurance policies contain an appraisal clause that a carrier or insured may invoke in situations where there is a dispute in damages between the parties. However, a court may determine that a party who is seeking to invoke an appraisal clause has waived its right to appraisal by not invoking the appraisal clause timely, or by taking actions inconsistent with appraisal in litigation. In a recent opinion by a Florida appellate court, People’s Trust ... Keep Reading »
Arbitration
Appearance by Video Might Be More Convenient for a Nonparty in Arbitration, but It Can’t Be Compelled Under the FAA
You find yourself in an arbitration needing documents and testimony from a nonparty. Your arbitrator issues a nonparty summons, "conveniently" requiring the out-of-state nonparty to appear by video at a hearing and produce documents to the parties and the arbitrator in advance. As it goes, the nonparty objects to the summons, refusing to comply without an order compelling it to do so. So you move to enforce the arbitral summons in the district court in which the ... Keep Reading »
Destination Arbitration: Court Holds Service-Of-Suit Clause Does Not Conflict With Policy’s Arbitration Requirement
Coverage disputes often come down to the interplay between endorsements and the body of the policy. But this tension is not limited to terms addressing coverage. It can also extend to areas such as dispute resolution. In Southwest LTC-Management Services, LLC v. Lexington Insurance Co., No. 1:18-cv-00491-MAC (E.D. Tex. Apr. 17, 2019), the court held that a service-of-suit endorsement did not supersede the arbitration clause in the policy. A group of carriers paid $2.5 ... Keep Reading »
To Defend or Not to Defend? Northern District of Ohio Provides Guidance for Determining Whether to Defend an Arbitration
While the rules for determining whether a liability insurer has a duty to defend a lawsuit are generally well-known, questions can arise when an insurer is asked to defend an arbitration. For example, can an insurer’s duty to defend be determined by looking solely at the initial request for arbitration even if that document is not required to fully clarify the claims asserted and damages sought? According to the Northern District of Ohio’s decision in Maxum Indemnity ... Keep Reading »
Not Seeing Double: In Reversal, New York Court Holds That Third-Party Liability Payments May Not Offset UIM Benefits
In New York, uninsured/underinsured motorist coverage “does not function … to fully compensate … insureds for their injuries.” Weiss v. Tri-State Consumer Ins. Co., 98 A.D.3d 1107, 951 N.Y.S.2d 191 (2d Dep’t 2012). UIM coverage is subject to limits, and those limits are generally reduced by the amount of coverage available to the person who caused the injury. Standard UIM endorsements also provide that coverage “shall not duplicate” payments the insured receives from ... Keep Reading »
McCarran-Ferguson Lands a Jab on the FAA
As we reported in this space late last year, the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1745 (2011), tilted the scales toward federal power in the field of arbitration, preempting state laws that may stand in the way of enforcing arbitration agreements pursuant to the Federal Arbitration Act ( "FAA"). Naturally, this left the McCarran-Ferguson Act spoiling for a fight, given its restoration to the states of all power to ... Keep Reading »
Change is in the Air: New Jersey Justices Hold Their Noses While Siding with Insurer in UM Disputes
On February 18, 2015, the Supreme Court of New Jersey issued separate opinions in two first-party, uninsured motorist cases against the same auto insurer. Plaintiffs in both cases alleged that the insurer had acted in bad faith by forcing the insured to trial after losing an arbitration. The insurer won both cases, on the ground that its position each time had been "fairly debatable" as a matter of law. But New Jersey’s high court also suggested, in both cases, that ... Keep Reading »
Rumors of Revival Were Greatly Exaggerated: Fifth Circuit Reverses Opinion on Contractual Liability Exclusion
We previously discussed the opinion of the U.S. Court of Appeals for the Fifth Circuit in Crownover v. Mid-Continent Cas. Co., No. 11-10166 (5th Cir June 27, 2014)—an opinion that seemed to revive the contractual liability exclusion by distinguishing a landmark Texas decision that had narrowed the exclusion's scope. That was then. Late last year, the U.S. Court of Appeals for the Fifth Circuit withdrew that order and issued a new opinion on rehearing. The new opinion ... Keep Reading »
McCarran-Ferguson vs. the FAA: Judge Posner Declares TKO in Favor of Arbitration
In a bout before the U.S. Court of Appeals for the Seventh Circuit, two heavyweight federal statutes squared off, with coverage for hundreds of long-tail, asbestos-related personal injury lawsuits on the line. In one corner: the Federal Arbitration Act, enacted by Congress to overcome federal courts’ erstwhile reluctance to enforce arbitration agreements. In the other corner: the McCarran-Ferguson Act, created to curb those courts’ over-reach into insurance regulation ... Keep Reading »
Federal Judges in Brooklyn are Making it Easier to Pursue Fraud Claims Against No-Fault Medical Providers
I was bawn in Williamsboig," he says. "An’ I can tell you t’ings about dis town you neveh hoid of." - Thomas Wolfe The Eastern District of New York, which includes the New York City Boroughs of Brooklyn and Queens, has been home to some of the most colorful no-fault insurance scams in living memory. In March, a Queens attorney entered a guilty plea in what the Government describes as “the largest single no-fault automobile insurance fraud scheme ever charged”—an ... Keep Reading »