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Latest issue of Coverage Opinions is now available

Posted in Uncategorized

The latest issue of Coverage Opinions is now available here.

Below is a list of articles available in the latest issue.

 

Declarations: The Coverage Opinions Interview With Frank Shorter – Olympic Gold Medalist And Lawyer
Running From The Law; The Amateur Trust Fund; From The Guns In Munich To The Bombs In Boston; The Fight Against Drugs In Sports; The Covers Of Life And Sports Illustrated; Creator Of The Running Boom; Breaking The Two Hour Marathon

Randy Spencer’s Open Mic
Brian Williams And Insurance Coverage

Coverage Opinions’s Take On Nationwide’s Super Bowl Commercial

The 10 Most Significant Liability Coverage Cases – Of All Time
Ten cases, more than any others, that exerted huge influence over the national coverage landscape.

Born To Litigate: Springsteen Makes A Coverage Case
What do you call a coverage case that quotes lyrics from a Bruce Springsteen song?

NFL Highlights Film: The Best Of Football Litigation
When The Gridiron And Courtroom Collide

Suing Bill Belichick For Cheating – Yes, It Has Been Done
Forget about deflate-gate. Another Patriots scandal got to the United States Supreme Court.

It’s Westminster Time: Show Dogs That Bite

The “Top 10’s” Strangest Moment
A crazy coincidence and the 2014 “Top 10 Coverage Cases of the Year” article.

The ALI Restatement: Status And Upcoming “Summit Meeting”
The Anyone Who’s Anyone Insurance Event

Interesting Case In The “What’s An Accident?” Category

New York Court Says N-O To Reimbursement Of Defense Costs
Most Extensive N.Y. Case To Address The Issue

Construction Defect: Court’s Lesson On Drafting A “Designated Work” Exclusion

Tapas: Small Dishes Of Insurance Coverage News And Notes
“Coverage for Dummies” Case Reversed

Sovereign Immunity waived by purchase of insurance — Missouri law

Posted in immunity, New Case

In Argonaut Great Central Ins. v. Audrain County, a grocery store insured by Argonaut was burgled and then burned down.  The grocery store’s alarm system was monitored through Audrain County.  Argonaut claimed the alarm monitoring by Audrain was defective, causing or contributing to the damages that Argonaut had to pay to its insured grocery store.  Audrain sought summary judgment on sovereign immunity grounds.  The trial court found the County waived sovereign immunity to the extent of its insurance coverage, and there was no evidence to support a reformation claim  (e.g., that the policy should have had a immunity endorsement).

No duty to defend; assault and battery exclusion unambiguous and listed on the declarations page Ark law

Posted in Contractual Liability, Duty to Defend, New Case

In George v. Great Lakes Reinsurance, 2015 Ark App 36, a gunman fired into a crowd at a party room owned by George.  George was sued, and told Great Lakes to defend him.  Great Lakes defended him under a reservation of rights, and filed a declaratory judgment action (dec action) to determine the rights and liabilities of the parties under the policy.  The insurer got summary judgment and George, the insured, appealed.  The Arkansas Court of Appeals affirmed.

First, it found there was no ambiguity in the exclusion.  And, the appellate court did not buy George’s argument that the exclusion was invalid because it wasn’t listed on the first page of the declarations:

George argues on appeal that this endorsement is not part of the insurance contract because it was not listed on the first page of the policy, which is captioned “Common Policy Declarations.” The endorsement is, however, listed as one of the forms and endorsements in the commercial general-liability-coverage declarations page. And George initialed and dated each page of the insurance contract, including the one containing the endorsement with the assault-or-battery exclusion. Although the endorsement was not listed on one declarations page, it was listed on a separate declarations page; it was attached to the policy when it was issued; and George dated and initialed each page. We affirm the circuit court’s decision that the assault-or-battery endorsement was part of the insurance contract’s terms.

No stacking of automobile liability coverage, Missouri law.

Posted in Contractual Liability, New Case, Vehicle

Hiles had two cars, insured under different policies.  Hiles was at fault in an accident that hurt Dutton. Dutton claimed his damages exceeded the minimum limits required by Missouri’s financial responsibility law (MVFRL), which were the limits on Hiles’ policy.  Dutton claimed the MVFRL required payment under the policy of Hiles’ other car, which was not involved in the accident.  The MVFRL requires coverage for cars that the insured designates, and any car the insured drives but does not own.   The MVFRL does not require coverage on cars owned by the insured but not designated.  Thus, insurance on one car does not have to cover a different car.  “That is, one cannot simply buy a policy of insurance on one vehicle and then argue that the policy covers other vehicles that the insured also owns but chose not to insure.”
Adam Dutton, Appellant vs. American Family Mutual Insurance Company, Respondent.
Missouri Supreme Court – SC94075

Dispute Remains as to Coverage — Missouri law

Posted in Contractual Liability, New Case

On motion for summary judgment, movants established most of their claim for equitable garnishment against insurer except whether policies covered defendant in underlying action.  Verified petition does not establish facts because a verified petition does not require first-hand knowledge as an affidavit does.  Insurer’s offer of defense, with or without reservation of rights, did not establish, beyond any contrary inference, an implied or express waiver of the right to deny coverage.   The more formalities required of insurer’s notice, the more material facts—absence of those formalities—movants must establish to prevail on summary judgment.  Ruling on summary judgment on which circuit court certifies no just reason for delay is subject to appeal.
JOSEPH SMITH, Plaintiff-Respondent, vs. MARYLAND CASUALTY COMPANY, Defendant-Appellant, and ANDREW SHAYATOVICH, Defendant-Respondent.
Missouri Court of Appeals, Southern District – SD33341

Life insurance proceeds are not marital property; Arkansas law

Posted in Contractual Liability, New Case

In Hargrove v. Hargrove, the trial court’s division of life insurance proceeds was error in light of an Arkansas statute which  excluded from the definition of “marital property” “property acquired prior to marriage or by gift or by reason of the death of another, including, but not limited to, life insurance proceeds.” Thus, life insurance proceeds on a spouse’s child by a previous marriage was not marital property, even if marital property was used to pay the premiums.

Compulsory Insurance — non auto case 8th Circuit

Posted in Contractual Liability, New Case

Most people are familiar with laws that require drivers to have insurance.  These are called compulsory insurance laws.  But in Northwest Airlines, Inc. v. Westchester Fire Insurance Co., compulsory insurance laws were applied to an on the ground airplane accident at the Las Vegas airport.

Northwest used PALS to maintain its planes in Las Vegas.  When one of PALS employees forgot to set a parking brake, one of Northwest’s planes rolled off the runway and was damaged in excess of $10,000,000.  PALS was insured by Westchester for $5 million as required by a county ordinance.  PALS did not tell Westchester about the accident (although Northwest did); and PALS did not answer the lawsuit filed by Northwest.  Northwest got a default judgment.  Westchester then sought a declaration that it wasn’t liable on its policy because of PALS failure to cooperate by not telling Westchester about the accident or giving notice of the suit.

But since the insurance was required by law, Westchester could not get out of liability because of the insured’s acts in failing to tell Westchester of the accident or the underlying lawsuit. Rather, under the compulsory insurance doctrine, an insurer cannot avoid paying the injured party because of the insured’s lack of notice or cooperation where the insurance policy was purchased to comply with the requirements of a statute, and the plaintiff was an injured member of the class the statute was intended to protect.

Also, the court noted that Northwest told Westchester about the accident and the lawsuit and that Westchester “spurned” this notice.  This is important because the compulsory insurance doctrine balances the injured party’s right to compensation against the insurer’s right to notice and cooperation.

Choice of Law in Auto Policy, 10th Circuit — Minnesota, Colorado law

Posted in Contractual Liability, Insurance Bad Faith, New Case, Vehicle

In Kipling v. State Farm Mutual Automobile, the plaintiff and her husband were injured in a car accident in Colorado. Plaintiff’s husband was killed.  Plaintiff was in a car provided by her husband’s employer (Quicksilver) when the accident occurred.  The sole cause of the accident was the negligence of the driver of the vehicle that collided with the Suburban. But the driver of that vehicle had inadequate liability insurance . Plaintiff therefore sought underinsured motorist (UIM) benefits under several State Farm policies.  State Farm paid the UIM benefits available under the policy covering the car Plaintiff was in at the time of the accident; and under  a separate policy issued in Colorado by State Farm to Quicksilver on a 2005 Ford pickup.

Plaintiff also sought UIM coverage under Minnesota policies issued by State Farm to Quicksilver. When the claim was denied, Plaintiff sued State Farm in federal court in Colorado.  State Farm argued Minnesota law applied and prohibited stacking of UIM policies (that is, obtaining UIM benefits under more than one policy) and that Plaintiff did not meet the definition of insured under the language of the policies. Plaintiff argued that Colorado law applied, permitted stacking, and prohibited a policy from limiting UIM coverage to those occupying the covered vehicle at the time of the accident, as in the Minnesota policies. The parties did not dispute that if Minnesota law applied, Plaintiff was not entitled to coverage. The district court denied State Farm’s summary-judgment motion, stating that Colorado law applied.

The Tenth Circuit reversed. It found that Colorado conflict of laws applied, and contract conflict-of-laws principles apply even though tort liability underlies any liability-insurance or UIM-insurance claim, and even though the court must consider statutes that override contract provisions on public-policy grounds. Since the trial court did not apply contract conflict of laws analysis, the case was remanded so the trial court could apply those principles in the first instance.

New 10th Circuit case finds claim note waives attorney client privilege

Posted in New Case

Route 66’s hail claim was, for the most part, denied by Seneca after Western Claims looked at the roof and said it wasn’t damaged. Seneca settled with Route 66 and then sued Western Claims and its adjuster for the amount of the settlement and defense costs.

In discovery, Seneca disclosed a claim note that stated Seneca had settled the Route 66 litigation for “$1 million dollars new money” “on advice of Counsel.” Western

Claims then filed a motion seeking to compel Seneca to produce, among other things, documents Seneca relied on in settling the Route 66 litigation. Seneca responded, claiming attorney-client privilege and work-product protection justified its refusal to produce the [attorneys]  correspondence. Over Seneca’s objection, the district court granted Western Claims’ motion to compel the correspondence between it and its attorneys.

At trial, various Seneca Insurance witnesses testified they relied on advice of counsel in settling the underlying case. Thus, the case was distinguished from Frontier Refining, Inc. v Gorman-Rupp Co.,136 F.3d 695 (10th Cir. 1998), where Frontier denied reliance on its counsel’s advice in determining to settle the underlying action.

 Seneca contends Frontier’s holding requires reversal because, like Gorman-Rupp, Western Claims had access to information regarding the reasonableness of the Route 66 settlement from sources other than the Isbell and Abowitz correspondence. This case, however, differs significantly from Frontier in that the “other sources”—namely Seneca’s officers—generally did not rely on their own reasons for settling with Route 66 for $1 million. Instead, they chose to rely on “advice of counsel” to justify the reasonableness of the settlement.

Thus, discovery was appropriate as to the attorneys’ advice to Seneca.

 

Seneca Insurance v. Western Claims

 

No bad faith where law is unsettled — Iowa workers compensation

Posted in Contractual Liability, Disability Benefits, Insurance Bad Faith, New Case

In Paulino v. Chartis, Paulino was injured at work, resulting in Paulino becoming a paraplegic.  As a result, Paulino needed certain living accommodations when he was discharged from rehabilitative services.  Since no specialized living accommodations were available, Paulino remained in the rehabilitative hospital, and Chartis quit paying.  The workers compensation court initially denied Paulino’s claim for more time in the hospital, and then reversed its decision. Later, Paulino sued Chartis for bad faith.  The trial court granted summary judgment to Chartis and the 8th Circuit affirmed.

Under Iowa law, a prima facie claim of bad-faith denial of insurance benefits requires proof of two elements: (1) that the insurance company “had no reasonable basis for denying the plaintiff’s claim” and (2) “the defendant knew or had reason to know that its denial or refusal was without a reasonable basis.” Bellville v. Farm Bureau Mut. Ins. Co., 702 N.W.2d 468, 473 (Iowa 2005). A court may find as a matter of law that the defendant had a reasonable basis if the claim is “fairly debatable.”  A claim is fairly debatable if “it is open to dispute on any logical basis”—that is, “if reasonable minds can differ on the coverage-determining facts or law.”

The Eighth Circuit, like the trial court, found the actions of Chartis “fairly debatable” thus affirming summary judgment.

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