“Gimme Shelter” is one of the greatest of a lot of great Rolling Stones songs (made greater by Merry Clayton’s gut-wrenching contribution). And, of course, “Gimme Shelter” is a cliché often trotted out in discussions of tax shelters. We’re not going to do that here. Instead, Financial Strategy Group, PLC v. Continental Casualty Co., Case No. 14-6296 (6th Cir. Aug. 4, 2015), puts us in mind of that other great Stones song, “You Can’t Always Get What You Want.” Because ... Keep Reading »
Exclusions/Exceptions
Ninth Circuit Finds Defects in the Construction of a “Known-Loss” Exclusion
A mason who performed work on a residential project was notified in 2006 that cracks had developed in his work. Several months later, the mason purchased a commercial general liability policy that expressly excluded coverage for property damage, if an insured "knew that the … damage had occurred, in whole or in part." In 2007, the project's general contractor sued the mason, claiming that defects in his work had caused the property damage that was the subject of a suit ... Keep Reading »
Who’s the Boss? In Policies Covering Multiple Insureds, the Details Matter
Liability policies for businesses are subject to a number of common exclusions; many, for example, do not cover liability to employees of the business who are injured on the job. Frequently, those policies do provide coverage to additional insured parties, such as lenders or property owners, that deal with the business. Recently, in Mutual Benefit Ins. Co. v. Politsopoulos, No. 60 MAP 2014 (Penn. May 26, 2015), the Supreme Court of Pennsylvania addressed the question ... 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 »
Playing with House Money: Fifth Circuit Holds that Home Designs Can Constitute Advertisements
Insurers – who bear the burden of crafting unambiguous policy language defining the contours of coverage – constantly face difficulty in attempting to predict unexpected liability. And sometimes, Courts can make this job far more difficult. For example, a recent Fifth Circuit decision held that a copyright infringement exclusion did not apply to exclude coverage for a judgment against the insured in a case alleging, well, copyright infringement. In Mid-Continent ... 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 »
A DJ is a Sometime Thing: In Declaratory Judgment Actions Over Coverage, the Sixth Circuit Gives Trial Courts a Wide Berth
The Declaratory Judgment Act, 28 U.S.C. § 2201, gives federal district courts "unique and substantial discretion" over whether to hear suits seeking a declaration of rights. Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). To guide the exercise of that discretion, Courts of Appeals have created lists of relevant considerations—most of which were borrowed from Moore's Federal Practice. See Reifer v. Westport Ins. Co., 751 F.3d 129, 145 n.20 (3d Cir. 2014) ... Keep Reading »
Apartment Complexity: Appellate Court Sorts Out Multiple Coverage Claims for Construction of Uninhabitable Residence
In QBE Ins. Corp. v. Adjo Contracting Corp. (N.Y. App. Div. 2d Dep't Oct. 29, 2014), an intermediate appellate court in New York confronted cross-appeals involving 15 different insurers embroiled in multiple lawsuits, including consolidated class actions. The core issue of the case was whether the insurers for a variety of subcontractors were obligated to provide a defense to tenants' lawsuits against the developer and general contractor of a doomed residential ... Keep Reading »
If it Races like a Tortoise: Connecticut Deconstructs a Policyholder
From Zeno of Elea to the Washington Nationals, images of racing have ceaselessly troubled Western thought. But as ancient metaphysics has given way to philosophy of language, the questions we ask ourselves have changed. In Sonson v. United Services Auto. Ass'n No. 35890 (Conn. Ct. App. Sept. 16, 2014), an automobile policyholder had to show that a "racing" exclusion did not apply, so he argued that Achilles could never overtake the tortoise if he was not "competing ... Keep Reading »
With Sewers Backing Up, Messy Damage Claims are On the Rise
Andy crawled to freedom through five hundred yards of - - - smelling foulness I can't even imagine. Or maybe I just don't want to. Five hundred yards. The length of five football fields. Just shy of half a mile. –The Shawshank Redemption (1994) Many homeowners and other property insurance policies contain an exclusion to address one of the by-products of the increased frequency of severe weather: it bars coverage for property damage caused by "water which backs up ... Keep Reading »