Bad Faith Count Against Insurer Dismissed by New York Court as Duplicative of Breach of Contract Cause of Action

A Nassau County trial court dismissed an insured’s bad faith counterclaim against an insurer in a declaratory judgment action on the basis that New York law does not recognize a claim for bad faith refusal to comply with an insurance contract. In Preferred Contractors Ins. Co. v. Cipco Boarding Co, Inc., the insurer moved to dismiss the insured’s bad faith counterclaim for failure to state a cause of action. While the court recognized that New York does recognize a claim for bad faith failure to settle a tort action within insurance policy limits, the court held that there is no
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New York Court Holds No Coverage for Restaurant’s Losses from Sandy Power Outage

In a case arising from business losses due to power outages caused by flooding during Superstorm Sandy, a New York trial court found that the water damage exclusion of the insurance policy unambiguously excluded coverage for power interruptions caused by flood. In La Casa di Arturo, Inc. v. Tower Group, et al., the policy provided coverage for loss associated with power interruptions that “result from direct physical loss or damage by a Covered Cause of Loss.” Water and flood were specifically excluded as covered causes of loss. Relying on the adjuster’s report and a Con Edison report—both of which concluded
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New York Insurer Can’t Avoid Defending Insured After Late Denial of BI Claim

The United States District Court of the Southern District of New York ruled that an insurer ran afoul of the timeliness requirements of New York Insurance Law § 3420(d)(2) when it disclaimed coverage 10 months after receiving notice of the claim. In Montpelier U.S. Insurance Co. v. 240 Mt. Hope Realty Co., the court held that the insurer’s late disclaimer failed to meet the law’s requirement that written notice of a denial for a bodily injury claim must be given as soon as is reasonably possible to the insured and the injured person. In addition, since the insurer had initially
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New York Court Dismisses Claims Against Insurer for Punitive Damages and Attorney’s Fees But Holds Consequential Damages Claim Can Move Forward in Bad Faith Action

In Millin v. Allstate Indemnity Co., et al., the insureds brought suit against Allstate for breach of contract and bad faith after Allstate partially denied their claim for water damage arising from a water leak in another apartment. Plaintiffs sought actual damages, consequential damages, punitive damages, and attorney’s fees. Allstate moved to dismiss Plaintiff’s claims for punitive damages, attorney’s fees, and consequential damages. Based on the law of New York, the court granted Allstate’s motion to dismiss the claims for punitive damages and attorney’s fees, but denied the motion as to consequential damages, finding that consequential damages are permitted when
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New York Court Holds That Questions of Fact Preclude Summary Judgment to Bar in Dram Shop Action

In Tansey v. Coscia, plaintiff brought a negligence action against a bar and other parties as a result of personal injuries sustained from an assault at the bar by another patron, Nicholas Coscia. Plaintiff alleged that the bar was negligent in unlawfully serving alcohol to Coscia because he was an underage and visibly intoxicated person under the Dram Shop Act. The defendant bar moved for summary judgment on the basis that there was no evidence that it unlawfully served alcohol to Coscia. The Supreme Court of Suffolk County examined the factual evidence in the case, including numerous depositions, and concluded
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New Jersey Federal Court Holds Ambiguous Denial Letter Tolls Suit Limitations Provision in Sandy Suit

The United States District Court for the District of New Jersey recently denied summary judgment to an insurer seeking to enforce the one year suit limitations provision of the insurance policy because the insurer’s denial letter failed to clearly disclaim coverage for the insured’s wind damage claim. In Liguori v. Certain Underwriters at Lloyd’s, London Subscribing to Policy #AJD8955, the insured filed suit 19 months after receiving the denial letter. While the insurer argued that the suit was time barred since it was filed more than one year after the denial, the insured maintained that the denial letter was insufficient
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New Jersey Court Holds Language of Lease Controls in Landlord and Tenant’s Dispute Over Sidewalk Liability

In an unpublished opinion, the Appellate Division of the New Jersey Superior Court found in favor a commercial tenant and against the landlord in an action that focused on the interpretation of the lease between the two parties to determine which party was responsible for maintenance and insurance of the common area sidewalk. In Senatore v. Kmart Inc., plaintiff brought suit against Kmart after falling on an allegedly defective portion of the sidewalk. Kmart, the tenant, tendered its defense to Belmont, the landlord, as an additional insured under Belmont’s policy. When Belmont’s insurer rejected the tender because Belmont had neglected
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Insurer’s Claims for Negligent Misrepresentation, Fraud and Civil Conspiracy Against Adjusters and Attorneys May Proceed

The United States District Court for the Eastern District of Pennsylvania ruled Monday that Church Mutual Ins. Co.’s lawsuit against a public adjusting firm and licensed public adjuster may proceed for claims of negligent misrepresentation, fraud and civil conspiracy. Church Mutual’s claims for civil conspiracy against two attorneys also survived. The action arose from two claims presented by a public adjusting firm on behalf of Church Mutual’s insured, African Episcopal Church of St. Thomas (AEC), for alleged water damage caused by frozen pipes in a chiller system and roof damage caused by hurricane Irene. Investigation into the claims and testimony
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New York Appellate Court Continues Expansive Interpretation of Additional Insured Endorsement

A New York Appellate Court recently reinforced a trend in New York to provide coverage to additional insureds under the standard Additional Insured Endorsement. In Burlington Ins. Co. v. NYC Transit Auth., the court held that the standard AI Endorsement provides additional insured coverage where there is a causal link between the named insured’s conduct and the injury, regardless of whether the named insured was negligent or otherwise at fault for causing the accident. This decision follows holdings in other cases over the past several years that broadly construed the AI Endorsement to provide coverage even when the named insured
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New Jersey Appellate Court Finds Lack of Specificity in Causation of Negligence Claim Does Not Bar Suit

A New Jersey Appellate Court ruled that a plaintiff’s lack of specificity as to what caused her bicycle accident did not support the trial court’s finding that the plaintiff presented no evidence of causation to support her negligence claim. In Walter v. California Avenue Ventures LLC, the Appellate Court reversed the trial court’s summary judgment in favor of the defendants and found that the record established a triable issue of fact on whether the condition of the sidewalk caused plaintiff’s fall and subsequent injuries. In Walter, plaintiff was injured while riding her bike when she hit an object on the
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