In Riconda v. Liberty Insurance Underwriters, Inc., the Supreme Court of Suffolk County, New York examined a motion to set aside a $2.8 million verdict entered against a directors & officers insurer in a coverage dispute. The litigation concerned the sale of a corporation in which the purchase price was never paid, and the purchasing entity ultimately declared bankruptcy. The owner who sold the corporation instituted an action against the directors and officers of the purchasing entity for fraud, self-dealing, and breach of fiduciary duty. The directors and officers sought a defense from their directors & officers liability insurer, which
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Archives for Insurance Law
New Jersey Appellate Division Holds That ATVs Are Not “Private Passenger Vehicles” Covered Under Automobile Insurance Policy
In Starner v. Haemmerle, the Appellate Division of the New Jersey Superior Court considered an action arising from an accident involving an all-terrain vehicle driven on a public road by a fourteen-year old girl, who drove the vehicle with the permission of its adult owner. The ATV flipped, injuring one of the passengers. As the ATV was uninsured, the driver sought coverage for the accident under her parents’ automobile policy, which provided coverage for accidents involving non-owned private passenger automobiles driven by an insured or resident relative. The term “private passenger automobile” was defined in the policy as “a four-wheel
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Middle District of Pennsylvania Holds That UIM Insurance Action Arising From 2003 Accident Timely When Filed Shortly After 2016 Coverage Denial
In Legos v. Travelers Cas. Co. of Conn., the United States District Court for the Middle District of Pennsylvania examined an underinsured motorist insurance claim arising from a 2003 automobile accident. The injured party filed a writ of summons against the other driver in 2005, followed by a lawsuit in 2006. Shortly thereafter, the injured party filed an underinsured motorist claim with his automobile insurer. The insurer acknowledged receiving the claim. In 2012, the injured party settled his action against the driver. In 2016, the injured party’s insurer sent a letter advising that the statute of limitations on the UIM
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New Jersey Appellate Division Holds That Failure to Disclose Excess Nature of Coverage on Certificate of Insurance Does Not Constitute a Misrepresentation
In The State-Operated School District of the City of Paterson v. American Alternative Ins. Co., the New Jersey Superior Court, Appellate Division examined allegations of misrepresentation by a transportation company retained by a school district to transport its students. The school district solicited bids for companies to provide transportation, noting in its bid specifications that the selected company must obtain insurance (including automobile liability insurance) naming the school district as an additional insured. The transportation company chosen by the school district entered into a contract requiring it to obtain such insurance. The company was also required to provide a certificate
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Pennsylvania Superior Court Holds That Vehicle Dismantling Exclusion Does Not Apply to Liability Insurance Claim Regarding Fueling Accident
In Tuscarora Wayne Ins. Co. v. Hebron, Inc., the Pennsylvania Superior Court reviewed a declaratory judgment action brought by a commercial general liability insurer regarding an incident at the insured’s vehicle dismantling facility. While one of the policyholder’s employees was fueling a flatbed truck, a fire started that caused damage to the facility, as well as neighboring vehicles and businesses. The subject policy contained an endorsement providing that the insurance did not apply to “property damage arising out of” the policyholder’s operations, which were identified as “vehicle dismantling.” The term “vehicle dismantling” was not defined in the policy. The liability
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Pennsylvania Federal Court Holds Shopping Center Tenant’s Insurer Has No Duty to Defend Landlord and Property Manager as Additional Insureds With Regard to Accident That Occurred Outside Tenant’s Premises
In Liberty Mutual Ins. Co. v. Selective Ins. Co. of America, the United States District Court for the Eastern District of Pennsylvania considered a demand for defense and indemnification of a lawsuit concerning an accident at a shopping center. An employee of a tenant was seriously injured after falling on a purportedly defective sidewalk outside the tenant’s establishment during a break from work. The employee and his wife filed a negligence action against six entities that owned and/or managed the center. These entities referred the action to their liability insurer, which in turn demanded defense and indemnification from the tenant’s
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Eastern District of Pennsylvania Holds Insurer’s Denial of Uninsured Motorist Claim Brought by Policyholder Injured While Attempting to Prevent Robbery Was Not in Bad Faith
In Smerdon v. Geico Cas. Co., the United States District Court for the Eastern District of Pennsylvania examined an automobile insurer’s denial of an uninsured motorist claim. The claim concerned injuries sustained by the policyholder when she attempted to apprehend a robber of a store. Along with several other individuals, the policyholder chased the robber into the store’s parking lot. After the robber entered the vehicle, the policyholder opened the passenger door in an attempt to remove the keys from the ignition. The robber then started the vehicle, running over the policyholder and causing her to suffer serious injuries that
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California Appellate Court Reinstates Regulation Stipulating That Unfair Insurance Practices Act Claim May be Based Upon a Single Violation
In Pacificare Life and Health Ins. Co. v. Jones, the California Court of Appeal for the Fourth District reversed a trial court decision enjoining three recent regulations enacted by the California Insurance Commissioner with regard to the unfair claims settlement provisions of the state’s Unfair Insurance Practices Act. The first regulation at issue stated that the Act may be violated if a prohibited claims settlement practice is either “knowingly committed on a single occasion,” or “performed with such frequency as to indicate a general business practice.” The plaintiff insurer contended that this regulation was inconsistent with the Unfair Insurance Practices
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Middle District of Florida Applies Bar/Tavern Exclusion to Claim Tendered by Security Company
In Mt. Hawley Ins. Co. v. Tactic Security Enforcement et al., the United States District Court for the Middle District of Florida examined a claim for the defense and indemnification of two lawsuits against the policyholder security company, alleging inadequate security with regard to shooting incidents at a facility where the policyholder provided services. The subject policy contained language excluding coverage for “[a]ny and all operations involving bars, taverns, gentlemen’s clubs and nightclubs.” The plaintiff insurer brought an action seeking a declaratory judgment that it was not required to provide coverage. At trial, the sole issue for the jury was
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New Jersey Court Remands Summary Judgment in Favor of Insurers in Superstorm Sandy Policy Dispute Due to Trial Court’s Failure to Specify Grounds for Decision
In Doerfler v. Federal Ins. Co., the Appellate Division of the New Jersey Superior Court examined lawsuits brought by a policyholder against two insurers with regard to the denial of claims for damage to a residence arising from Superstorm Sandy. In each case, the insurer had denied coverage based upon the policy’s surface water exclusion. The policyholder asserted breach of contract and bad faith claims against the insurers. The bad faith claims were severed pending resolution of the breach of contract claims. Following discovery, the trial court granted the defendant insurers’ motions for summary judgment and denied the plaintiffs’ cross-motions
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