The statute of limitations for a bad-faith failure-to settle claim accrues when an insured suffers a judgment in excess of policy limits and that judgment becomes final and non-appealable, according to the Delaware Supreme Court. In Connelly v. State Farm Mut. Auto. Ins. Co., C.A. No. K14C-09-002 (March 4, 2016), the Court rejected State Farm’s contention that the bad-faith claim accrues only when the insurer allegedly acts in bad faith and breaches its duty to the insured. State Farm had provided a defense to its insured for a motor vehicle accident lawsuit. The driver offered to settle the case with
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Split NJ Supreme Court Rules That Liability Insurer Can Rescind Policy for Doctor’s Material Misrepresentation on Application
Reversing a lower court’s ruling, in DeMarco v. Stoddard the New Jersey Supreme Court held that the Rhode Island Medical Malpractice Joint Underwriting Association (“RIJUA”) did not have to provide any defense or indemnification in a medical malpractice action to a doctor who made a material misrepresentation on his application for insurance. Plaintiff attempted to argue that because medical malpractice insurance is mandatory in New Jersey and a minimum amount of $1,000,000 in coverage is required, then RIJUA should be required to cover the doctor for the statutory minimum, similar to the protection afforded innocent third parties when a motor
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Issues of Fact Preclude Summary Judgment in New York Trip and Fall Case
In Hines v. HSBC Bank USA, Inc., the Wayne County Supreme Court held that a Plaintiff in a trip and fall action provided enough proof of her negligence cause of action to create triable issues if fact that defeated Defendant’s summary judgment motion. The facts in Hines are relatively straightforward. Plaintiff Hines tripped and fell on the sidewalk outside of the HSBC Bank, where she was a regular customer, in what was later determined to be a small depression in the sidewalk. Under New York law, as an owner or possessor of a property open to the public, HSBC had
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New York Homeowners’ Suit Against Insurer for Mold Damage Barred by Policy’s Suit Limitations Provision
Rejecting the homeowners’ argument that the insurer was equitably estopped from asserting a statute of limitations defense, the United States District Court for the Southern District of New York recently held that the two year suit limitations provision of the insurer’s policy barred the insured’s breach of contract action, which was not filed until almost nine years after the date of loss. In granting the insurer’s Motion for Judgment on the Pleadings, the court in Clement v. Farmington Casualty Company found that the insureds failed to prove any affirmative wrongdoing by the insurer that could meet the requirements of the
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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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