In April, a federal district court in the Western District of Washington issued a decision in National Union Fire Insurance Co. v. Zillow, Inc. While at first blush, it may seem only of interest to those who work with media policies, this decision has potential broader application. In short, the decision rejects the argument that a demand letter and subsequent litigation based on the facts asserted in the demand letter are separate claims and thus should be treated as ... Keep Reading »
Duty to Indemnify
Poisoning the Well: Washington Supreme Court Applies Efficient Proximate Cause to Eviscerate Pollution Exclusion in Liability Policy
Professionals and practitioners in first party property insurance are likely familiar with the efficient proximate cause rule, which requires an insurance policy to provide coverage where "a covered peril sets in motion a causal chain," even if subsequent causes-in-fact of the loss are excluded by the policy. As indicated by our previous coverage [1, 2, 3] of this doctrine, this can be a confusing analysis that leads to unpredictable results. Until recently, the ... Keep Reading »
Connecticut Appellate Court Addresses Trigger, Allocation, Exclusions, and Other Issues of First Impression in Coverage Litigation Over Long-Latency Asbestos Injury Cases
Connecticut’s intermediate appellate court addressed a number of novel issues in a wide-ranging opinion regarding primary and excess insurers’ respective duties to defend and indemnify their common insured for long-tail asbestos-related injury claims. The opinion was rendered unanimously and authored collectively by the three-judge panel of Robert Beach, Douglas Lavine, and Stuart Bear (ret.). The case, styled R.T. Vanderbilt Company, Inc. v. Hartford Accident and ... Keep Reading »
Eleventh Circuit Deems Voluntary Dismissal of a Coverage Action Sufficient to Award Attorneys’ Fees to a Policyholder as the Prevailing Party
In a recent unpublished opinion, the Eleventh Circuit issued a decision that should serve as a warning to insurers to be sure to resolve all issues before dismissing a coverage action, particularly when involved in the settlement of an underlying suit. A Tale of Two Cases In W&J Group Enterprises, Inc. v. Houston Specialty Ins. Co., No. 16-15625 (11th Cir. Apr. 6, 2017), the insurance carrier filed a declaratory action against its policyholder in the Middle ... Keep Reading »
Blowing the Whistle on Willful Misconduct: California Court holds that False Claims Act Suits Are Uninsurable Due to Public Policy
Willful misconduct is uninsurable. It is a fundamental principle of insurance, and it makes sense to both the lay and the lawyerly. But few states go as far as to codify this principle in the insurance code. California is an exception. In Office Depot, Inc. v. AIG Specialty Insurance Company, Case No. 15-02416-SVW-LPRx (C.D. Cal. Jan. 4, 2017), the U.S. District Court for the Central District of California held that Section 533 of California’s Insurance Code relieved ... Keep Reading »
Reading the Crystal Ball: Reservation of Rights Letters under South Carolina Law in the Wake of Harleysville Group Insurance v. Heritage Communities, Inc., et al.
The South Carolina Supreme Court recently took a firm stance on what constitutes a sufficient reservation of rights letter in Harleysville Group Insurance v. Heritage Communities, Inc., et al., -- S.E.2d -- , No. 2013-001281, 2017 WL 105021, at *2 (S.C. Jan. 11, 2017). In Heritage, the court addressed coverage for defective construction at two condominium developments in Myrtle Beach. According to the opinion, the developments were constructed between 1997 and 2000 by ... Keep Reading »
Third Circuit Affirms Rescission of $25 Million Contaminated Products Policy
In H.J. Heinz Co. v. Starr Surplus Lines Ins. Co., No. 16-1447 (3d Cir. Jan. 11, 2017), the Third Circuit affirmed a District Court’s order allowing insurer Starr Surplus Lines Insurance Company (“Starr”) to rescind a $25 million Contaminated Products Insurance (CPI) policy that it sold to food manufacturer H.J. Heinz Company (“Heinz”), on the basis that Heinz failed to disclose material information in its insurance application. After Starr declined coverage, Heinz ... Keep Reading »
Peerless, This is Not: Sixth Circuit Finds No Latent Ambiguity in Consent to Settle Requirement in Excess Policy
Disputes between policyholders and excess insurers often involve events that occurred before the underlying defense costs or indemnity payments reached the excess layer. In Stryker Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 842 F.3d 422 (6th Cir. 2016), reh’g denied (Dec. 13, 2016), the U.S. Court of Appeals for the Sixth Circuit addressed a situation where a policyholder settled a claim without obtaining the excess insurer’s consent to the settlement, ... Keep Reading »
Unlike Friendships, Policy Exclusions Are Not Severable In West Virginia
A homeowners insurance policy often covers every member of a family, and many policies state that the insurance applies separately to each insured. The same policies usually exclude coverage for intentional acts. But what happens when one insured is accused of negligently permitting a different, separately-covered family member to cause harm intentionally? Last month, in American National Property & Casualty Company v. Clendenen, No. 16-0290 (W. Va. Nov. 17, 2016), ... Keep Reading »
In Indiana, an Absolute Pollution Exclusion May Exclude Absolutely Nothing
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 »
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