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 »
WV Court Rules Earth Movement Exclusion Unambiguously Precludes Coverage Regardless of Whether Landslide Was a Man-Made or Naturally-Occurring Event
In Erie Insurance Property and Casualty Company v. Chaber, No. 16-0490 (W. Va. June 1, 2017), the Supreme Court of Appeals of West Virginia reversed a lower court’s decision, holding that damage caused by a landslide was excluded, regardless of whether the landslide resulted from excavations or naturally occurred, where the policy excluded loss whether such loss is “caused by an act of nature or is otherwise caused.” The court went on to follow the law of other ... Keep Reading »
One Way Out: California District Court Finds Insurer Had Right to Pay Limits Despite Possible Defense
In Film Allman, LLC v. New York Marine and General Insurance Company, Inc., 2:14-cv-7069-ODW, (C.D. Cal. May 23, 2017), a California district court granted summary judgment in favor of an insurer of a production company. The court found no breach and no extra-contractual damages were warranted because the insurer paid full policy limits to settle the claims. Midnight Rider The insurance coverage dispute arose after production company Film Allman, LLC was sued as a ... Keep Reading »
Shot Through the Heart, But the Excess Carrier Isn’t to Blame: Georgia Federal Court Finds Policy’s Broad Firearms Exclusion Bars Coverage
On June 1, 2017, the U.S. District Court for the Northern District of Georgia granted summary judgment in favor of AIG Specialty Insurance Co. in a case involving the application of the firearms exclusion in Powe v. Chartis Specialty Insurance Co., No. 1:16-CV-01336. The court dismissed the case, in which claimant Christopher Powe sought the remaining $3 million of a $4 million settlement against the insureds, property management company HMI Property Solutions, Inc. ... Keep Reading »
Fifth Circuit Reverses Mississippi District Court’s Interpretation of “Ambiguous” Language to Nullify Defense Within Limits Coverage
Insurance policies that include the cost of defending a particular claim or action within the policy’s limit of liability, often referred to as “burning,” “eroding,” or “defense within” limits policies, are common in the management liability insurance market. As we previously reported, a 2015 United States District Court for the Southern District of Mississippi decision cast a cloud of doubt over liability insurers issuing defense within limits policies in Mississippi ... 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 »
Multiple Instances of Defectively Designed, Manufactured, or Installed Windows Does Multiple Occurrences Make
After previously holding that various claims against the insured, Pella, alleged property damage caused by an “occurrence,” thus triggering Liberty Mutual Insurance Company’s (“Liberty”) coverage obligations under various CGL policies, in Pella Corp. v. Liberty Mut. Ins. Co., No. 4:11-cv-00273 (S.D. Mar. 31, 2017), the Southern District of Iowa was then tasked with determining the number of “occurrences.” Pella purchased annual liability policies – CGL policies (with ... Keep Reading »
Oregon Supreme Court Revives Century-Old Statute to Award Attorney’s Fees to Policyholder
The general rule regarding a party’s responsibility for legal fees in U.S. courts, known as the “American Rule,” provides that, barring a contrary contractual obligation or statute, each party is responsible for its own legal fees, regardless of a dispute’s outcome. Although statutory exceptions to this rule are many, the overwhelming majority of those exceptions require that the person receiving a fee award at least be the prevailing party. Not so in Oregon — or at ... Keep Reading »
Texas Supreme Court Clarifies When Insured May Recover Policy Benefits
In an effort to clarify over 20 years of conflicting precedent, the Texas Supreme Court announced five rules that, according to the court, explain the relationship between claims for breach of insurance policy and extra-contractual claims for bad faith and violations of the Texas Insurance Code. USAA Texas Lloyds Co. v. Menchaca, No. 14-0721, slip op. at 6 (Tex. April 7, 2017). Although an insurance policy is an agreement between the parties that is generally governed by ... Keep Reading »
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