A recent article in the Sports section of The Miami Herald read "Shooting coach helps Winslow." Perhaps, but it probably didn't help the coach much. The admonition to "eat every carrot and pea on your plate" undoubtedly elicits laughs from the children to whom it is directed. The point is, some things are unambiguously ambiguous. Others are not. Consider these basic principles of Indiana contract interpretation: Limitations on coverage in insurance policies must ... Keep Reading »
Duty to Defend
Colorado Takes A Stand Against Unauthorized Settlements
The “notice-prejudice” rule gives a pass to policyholders who breach the notice or cooperation provisions of their policies, if the breach is found not to have prejudiced the insurer. Sometimes, the late notice does not arrive until after the policyholder has settled an underlying claim; even in those cases—and even where the policy contains a “no voluntary payments” or a “consent-to-settle” clause—dozens of cases have found that the notice-prejudice rule applies. Last ... Keep Reading »
Accidentally On Purpose: Washington Court Finds Coverage For Contempt Of Court Based On “Misunderstanding”
Professional liability policies cover claims based on the insured’s alleged negligent acts, errors or omissions, and not claims for “sanctions or penalties” for “willful” professional misconduct. But the insurer’s duty to defend is very broad. Recently, a debtor in a bankruptcy proceeding filed a motion against the attorney for a judgment creditor, seeking to have her held in civil contempt for an allegedly “willful” violation of a discharge injunction. In Gauthier v. ... Keep Reading »
Accrual to be Kind: Pennsylvania Appellate Court Addresses Statute of Limitations for Declaratory Claim
A Pennsylvania appeals court recently addressed a nuanced procedural question: the applicable statute of limitations in a declaratory action of a coverage dispute. In Selective Way Ins. Co. v. Hospitality Group Svcs, Inc., No. 1430 WDA 2015 (Pa. Super. Ct. July 7, 2015), the court determined that an insurer’s responsibility to commence a timely action for declaratory relief in a coverage dispute begins to toll when the insurer has a factual basis sufficient to allow it ... Keep Reading »
Fifth Circuit Finds Erosion in Texas—Because Endorsements Are Transformative
In Amerisure Mut. Ins. Co. v. Arch Specialty Ins Co., No. 14-20239 (5th Cir. April 21, 2015), a case that applied Texas law, the U.S. Court of Appeals for the Fifth Circuit recently held that the word "expenses," as used in a liability policy, unambiguously applies to attorneys' fees—and that an endorsement dealing with "expenses" had "transform[ed] the policy in an 'eroding limits' policy." Among other things, the case shows that Texans and New Yorkers don't use words ... Keep Reading »
Cyberclaim Coverage Denied: The TCPA Protects Privacy, Not Personally Identifiable Information
In Doctors Direct Ins., Inc. v. Beaute’ E’mergente, LLC, No. 1-14-2919 (Ill. App. Ct. June 22, 2015), an Illinois state appellate court recently affirmed that a medical malpractice liability insurer did not owe a duty to defend or indemnify its insured in an underlying class action lawsuit alleging violations of the Telephone Consumer Protection Act (the “TCPA”) and the Illinois Consumer Fraud and Deceptive Business Practices Act (the “ICFA”), because there was no ... Keep Reading »
Eleventh Circuit Affirms Summary Judgment for Insurer on Basis of “Other Capacity” Exclusion
On June 22, 2015, the Eleventh Circuit affirmed the grant of summary judgment in favor of National Union Fire Insurance Company of Pittsburgh, Pa., in an action where the insured sought coverage under a D&O policy. The court found that the claim was excluded under a provision barring coverage for claims “arising out of” alleged misconduct in a capacity other than as a corporate officer and director, and that, accordingly, there was no bad faith as a matter of ... Keep Reading »
Wait A Minute, Mr. Postman: Tenth Circuit Applies Statutory-Violation Exclusion To Junk Fax Claims That Try To Skirt The TCPA
Enacted in 1991, the Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA), inaugurated the era of "junk fax" class actions, in which recipients of mass fax advertisements may pursue statutory damages of $500 per class member. Insurers responded by adding terms to liability policies that expressly exclude coverage for claims under the TCPA. But the dialectic of coverage litigation is ineluctable, and plaintiffs began asserting, in effect, that the TCPA was ... Keep Reading »
Coverage Not Limited to Schedule of Locations in Fight Over Dam Liabilities
In C. Brewer & Co., Ltd. v. Marine Indem. Ins. Co. of Am., No. SCWC-28958 (Haw. Mar. 27, 2015), the Supreme Court of Hawaii ruled that liability coverage is not limited to only those locations defined in an insurer's schedule of locations. The court found that because a causal connection could be established between the negligent decisions of a business proprietor and the liabilities stemming from those decisions elsewhere, coverage could be applied irrespective of ... Keep Reading »
Et tu, Buddy?: When Excess Insurers Sue for Bad Faith
Insurers don’t, as a rule, like bad faith suits. But life can play funny tricks—as when a judgment against an insured breaches a layer of excess coverage, because the primary carrier failed to settle within its policy limits. In those circumstances, a number of jurisdictions hold that the excess carrier is subrogated to the insured’s right to sue the primary insurer for bad faith failure to settle. Northwestern Mut. Ins. Co. v. Farmers Ins. Co., 76 Cal App. 3d 1031 ... Keep Reading »
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