The New Jersey Superior Court, Appellate Division, has rejected the argument that an insured’s spouse has a “presumptive right” to the policyholder’s life insurance benefits. Fox v. Lincoln Financial Group concerns a life insurance policy that initially named the policyholder’s first spouse as a beneficiary. After the policyholder divorced, he designated his sister as sole beneficiary. Several years later, the policyholder married a Brazilian citizen. In support of his spouse’s application for American citizenship, the policyholder executed an affidavit in which he agreed to support his spouse at 125 percent of the poverty level. Under the terms of the affidavit,
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Monthly Archives February 2015
New Jersey Supreme Court Issues Two Notable Insurance Bad Faith Opinions
The New Jersey Supreme Court has released two significant insurance bad faith opinions, both in the context of uninsured motorist claims. In Badiali v. New Jersey Manufacturers Ins. Co., the Court acknowledged that an insurer’s reliance upon unpublished appellate decisions does not constitute bad faith. In Wadeer v. New Jersey Manufacturers Ins. Co., the Court recognized that res judicata precludes a claimant from pursuing a bad faith action when the insurer’s alleged bad faith was at issue in a prior coverage action. In both decisions, the Court upheld the well-established “fairly debatable” standard for determining whether an insurer’s claims handling
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New Jersey Appellate Court Upholds Defense Verdict in Case Alleging Unauthorized Modification of Policy Limits
The New Jersey Superior Court, Appellate Division, has upheld a defense verdict in a matter contending that an automobile insurer improperly lowered liability and personal injury protection coverage limits without the consent of the named insureds. Brown v. Government Employees Ins. Co. concerned changes made to a policy over two years after the policy had been purchased. The policy listed a married couple as the named insureds. The insurer’s records reflect that an individual who was believed to be the plaintiff’s spouse had contacted the insurer to request that her adult stepdaughter be added to the policy. At the same
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New York Appellate Court Holds That Landlord is Not Liable for Fall From Roof Accessible From Apartment Window
An intermediate New York appellate court has held that a landlord was not liable for a tenant’s fall from the building’s roof, as the fact that the roof was accessible from the roof did not render the plaintiff’s use of the roof foreseeable. Feuerherm v.Grodinsky concerned an accident that occurred at a seven-unit apartment. The injured tenant had moved into the building at most a few weeks prior to the accident. A portion of the building’s roof was accessible from the injured tenant’s room. After drinking at a bar, the plaintiff tenant arrived home at 3 am, and was found
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New Jersey Court Upholds Application of Named-Storm Deductible to Sandy Claim
A New Jersey trial court has declined to reconsider its previous determination that a $22 million “named-storm” deductible applied to a $54 million property insurance claim for damage arising from Superstorm Sandy. The claim and subsequent lawsuit was brought by insured supermarkets seeking compensation for spoiled food, property damage, business interruption, and other losses following Sandy. The policy defined a “named storm” as a storm declared by the National Weather Service to be a hurricane, tropical cyclone, tropical storm, or tropical depression. The policyholders contended that the deductible did not apply because Sandy was classified as a post-tropical cyclone at
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New York Court Holds That Guilty Plea for Assault & Battery Does Not Preclude Liability Coverage for Incident
The Supreme Court for New York County has held that a policyholder’s guilty plea for assault does not authorize the denial of liability coverage for a lawsuit arising from the same incident. In United Servs. Auto. Ass’n v. Iannuzzi, the insurer sought a declaratory judgment that it had no duty to defend and indemnify a policyholder for a lawsuit arising from an altercation. The insurer’s argument was based upon policy language limiting liability coverage to claims arising from “occurrences,” which is in turn defined as an “accident.” The insurer argued that as the policyholder had pled guilty for criminal assault
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Pennsylvania Superior Court Holds That Fraudulent Acts Exclusion Precludes Liability Coverage for ERISA Class Action
The Pennsylvania Superior Court has held that pursuant to a fraudulent acts policy exclusion, a policyholder was not entitled to liability coverage for a class action verdict arising from the policyholder’s misleading description of an ERISA benefits plan. In Cigna Corp. v. Executive Risk Indem., Inc.,the policyholder sought coverage for a class action challenging the policyholder’s 1998 conversion of its defined benefit pension plan to a cash balance plan. This conversion had the effect of freezing or reducing the benefits of some participants. While a trial court determined that the conversion did not violate ERISA, the court also found that
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District of New Jersey Holds That Bank Has Duty of Care to Prospective Buyers in Foreclosed Home
A magistrate judge in the United States District Court for the District of New Jersey has held that a bank owes a duty of care to prospective purchasers of a foreclosed residence. The underlying case concerned a prospective buyer who tripped on a piece of broken glass while visiting a foreclosed home, causing her to fall and resulting in serious injuries. The injured party filed suit against the bank, real estate agent, real estate agency, and maintenance contractor. In support of its motion for summary judgment and in opposition to plaintiff’s motion for summary judgment, the bank argued that it
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Pennsylvania Superior Court Reverses Trial Court Determination That Sidewalk Defect is “Trivial”
The Pennsylvania Superior Court has reversed a trial court decision granting summary judgment for the defense in a sidewalk defect case, after determining that the trial court erroneously held as a matter of law that the defect in question was “trivial.” Reinoso v. Warminster Heritage concerned an accident at a shopping center in which the plaintiff tripped and fell on a raised piece of sidewalk, resulting in a broken left hand and fractured ribs. The plaintiff’s expert engineer/architect determined that there was a differnce of 5/8 of an inch between sidewalk sections in the area where the plaintiff fell. The
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