In Berg v. Nationwide Mut. Ins. Co., the Pennsylvania Superior Court examined a lengthy dispute arising from a first-party automobile insurance claim. After an accident, the initial damage estimate determined that the insured vehicle should be declared a total loss. The insurer subsequently concluded that the vehicle was repairable and directed a collision facility to undertake repairs. The plaintiff policyholders alleged that the repairs were insufficient and that the vehicle was left with permanent frame damage rendering it unable to withstand a collision. The policyholders filed suit against the insurer and repair facility, asserting claims for breach of contract, insurance
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Archives for Insurance Law
New York Federal Court Holds That Arbitrators Must Decide Whether Party Waived Right to Arbitrate
In Syngenta Crop Protection, LLC v. Ins. Co. of North America, the United States District Court for the Southern District of New York addressed an action against a liability insurer for coverage for asbestos claims. The policyholder first notified the insurer of the claims in 1999. The insurer responded with a reservation of rights letter explaining why the claims may not be covered. However, the insurer took no further action on the claims. In 2008, the policyholder made a formal demand for indemnification. In 2017, the insurer finally issued a denial of coverage. In its denial, the insurer asserted for
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New Jersey Appellate Court Holds That There is No Coverage for Domestic Violence Under a Standard Liability Policy
In D.G. v. B.E.A., the New Jersey Superior Court, Appellate Division addressed a demand for a homeowners’ liability insurer to provide defense and indemnification of a lawsuit raising allegations of domestic violence. The insurer denied coverage on the grounds that the lawsuit did not raise allegations of an “occurrence” as required by the policy, and also because the lawsuit fell within an exclusion for injuries “expected” or “Intended” by the policyholder. The policyholder claimed that the lawsuit should be covered because he was extremely intoxicated at the time of the incident and was unable to form an intent to cause
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New Jersey Appellate Court Holds That Insurer’s Decision to Provide “Courtesy Defense” of Non-Covered Action Does Not Constitute Estoppel
In Northfield Ins. Co. v. Mt. Hawley Ins. Co., the New Jersey Superior Court, Appellate Division, examined a declaratory judgment action brought by a property owner’s insurer against a contractor’s liability insurer. The case arose from a roof installation performed by the contractor and a subcontractor at a hotel in the summer of 2012. Shortly after the work was completed, Superstorm Sandy struck the property, causing roof damage and water damage to the hotel’s interior. The hotel’s property insurer advised the contractor’s insurer of a potential claim. The contractor’s insurer rejected the claim, determining that the damage at issue was
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New York Court of Appeals Rejects “Unavailability of Insurance” Exception In Long-Tail Allocation Cases
In KeySpan Gas East Corp. v. Munich Reinsurance Am., Inc., the New York Court of Appeals examined an action against a liability insurer for indemnification of long-tail environmental damage. The plaintiff power company owned two manufactured gas plants that began operations in the late 1880s and early 1900s, and had remained in operation for several decades. After the plants had ceased operations, a state environmental agency detected long-term environmental damage at both sites arising from contaminants seeping into the ground and leeching into groundwater. The power company was required to perform expensive clean-up operations at both sites. The power company
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Southern District of New York Precludes Coverage Under Insurer’s Professional Liability Policy for Settlement of Claim Arising Prior to Inception of Policy
In Colony Ins. Co. v. AIG Specialty Ins. Co., the United States District Court for the Southern District of New York considered a claim under a professional liability policy brought by Colony Insurance seeking reimbursement for extra-contractual damages paid on a “claims made” commercial general liability policy. The underlying claim concerned a construction defect lawsuit against a number of defendants, including a Colony insured. In September 2013, the underlying plaintiffs’ counsel sent a demand letter to Colony, stating that unless it paid its $2,000,000.00 policy limits as part of a global settlement, the underlying plaintiffs and the Colony insured would
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Clark & Fox Successfully Obtains Dismissal of Insurer in Bachir v. Lloyd’s of London, 2015-03060 (2d Dept. Jan. 24, 2018)
Affirming New York’s long-standing enforcement of insurance policy suit-limitation provisions, the Second Department upheld the dismissal of a group of Lloyd’s of London insurers from a lawsuit seeking payment for damages due to a fire loss at a Long Island restaurant. On January 13, 2008, a fire occurred at the Bayville Lobster House, a property insured by the London syndicates. The insured submitted a claim that was denied because the policy had been cancelled weeks prior to the fire due to late payment of the policy premium. In December 2010, the insured filed a Summons in the Supreme Court, Suffolk
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New York Federal Court Authorizes Deposit of Policy Proceeds in Interpleader Action Involving Priority of Liens
In Allstate Indem. Co. v. Collura, the United States District Court for the Eastern District of New York considered an interpleader action brought by a homeowners’ insurer. After determining the amount owed on a partial loss claim, the insurer learned that several parties were lienholders with potential entitlements to the insurance proceeds. The lienholders included the mortgagee, the bank to which the mortgage was assigned, the mortgage servicer, the United States government (which held tax liens), and a third party that asserted a claim against the policyholder. The insurer sought to deposit the actual cash value payment with the Court,
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New Jersey Supreme Court Holds That Anti-Assignment Clause Does Not Preclude Post-Loss Assignment of Claims
Consistent with numerous other jurisdictions, the New Jersey Supreme Court has held that insurance anti-assignment clauses do not preclude policyholders from assigning claims after a loss. In Givaudan Fragrances Corp. v. Aetna Cas. & Sur. Co., the Court examined claims for the defense and indemnification of an environmental liability action. The plaintiff brought a declaratory judgment complaint against several insurers, contending that it was entitled to coverage as an affiliate of the named insured. While the declaratory judgment action was pending, the corporate successor-in-interest to the named insured executed an assignment of rights under the policy to the plaintiff. Citing
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Florida Supreme Court Adopts Concurrent-Cause Doctrine
Resolving a split among lower-level appeals courts, the Florida Supreme Court has adopted the concurrent-cause doctrine, ruling that coverage exists under an all-risk property policy when multiple perils combined to create a loss and at least one of the perils is covered by the terms of the policy. Under the facts outlined in Sebo v. American Home Assurance Co., No. SC14-897 (Fla. Dec. 1, 2016), John Sebo purchased a Naples, Florida home in April 2005, when it was four years old. American Home Assurance Company AHAC) provided homeowners insurance as of the date of the purchase. The policy, which insured
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