Insurance Coverage and Bad Faith

In Royal Waste Services, Inc. v. Interstate Fire & Casualty Company, the New York Supreme Court, Appellate Division, 1st Department, addressed the issue of cancellation of policies based on nonpayment of the premiums. The court held that if an insured makes timely payment to a broker and the insurer delivers the policy to the broker pursuant to the broker's request, the insurer may not cancel the policy based on nonpayment of premiums if the broker did not remit the payment to the insurer. (June 25, 2020)

In Dynatec Construction Inc., v. Burlington Insurance Company, the Supreme Court of New York, Appellate Division, 2nd Department, addressed whether Burlington Insurance Company was obligated to defend and indemnify 653 Tenth Avenue, LLC as an additional insured under a policy issued to Rock Scaffolding in an underlying tort action. The Burlington policy included as an additional insured, "any person(s) or organization(s) with whom you [Rock Scaffolding] agreed, because of a written contract, written agreement or permit, to provide insurance such as is afforded under this Coverage Part." The Second Department held that 653 Tenth was not an additional insured under the policy issued to Rock Scaffolding, given the absence of contractual privity between Rock Scaffolding and 653 Tenth. (June 18, 2020)

In Tran v. Utica First Insurance Company, the Supreme Court of New York, Appellate Division, 2nd Department, addressed whether an insurer was obligated to defend and indemnify a landlord as an additional insured under a policy issued to the tenant of the subject premises. The court held that an insurer can be relieved of its duty to defend by establishing, as a matter of law, that no possible factual or legal basis exists upon which it might eventually be obligated to indemnify the insured. Here, the landlord was not added as an additional insured until after the accident that was the subject of the lawsuit; therefore the insurer had no duty to defend and indemnify the landlord. (March 20, 2020)

In Green Mountain Insurance Company, Inc. v. Wakelin, the Supreme Judicial Court of Massachusetts interpreted an exclusion in a homeowner’s policy in addressing whether deaths caused by the improper use of a portable generator at an uninsured premises arose out of the uninsured premises. The homeowner’s policy contained an exclusion for bodily injury “arising out of a premises” owned by the insured, but not insured under the policy. Explaining that a distinction exists between tortious conduct that occurs on a premises and personal liability that arises out of a condition of a premises, the court held that the portable generator does not constitute a condition of uninsured property and thus the claims do not arise out of that premises. The court reasoned that the generator was portable, it was purchased for its portability, it was not hard wired into the building’s electrical system, it was only “attached” to the building by a chain and it was not regularly used to power the building. (March 3, 2020)

In USAA Casualty Insurance Company v. Carr, the Supreme Court of Delaware addressed whether an insurer was obligated to defend, indemnify, or provide coverage for claims arising from an assault that resulted in an allegedly accidental death. The court held that whether an assault is an “accident” is determined by the intent of the insured, not by the viewpoint of the victim. Because the insured intended to cause the victim harm (even though she may not have intended to cause death), coverage was excluded by the terms of the policy. (January 29, 2020)

In Aquino v. Untied Property & Casualty Company, the Supreme Judicial Court of Massachusetts addressed a homeowner’s insurance policy that deviated from the form required by statute by excluding coverage for intentional acts (here, arson) of any insured, rather than excluding coverage only for intentional acts of the insured seeking coverage. The court concluded that the insurer owed coverage to the innocent co-owner of the home, but found that the insurer had not committed an unfair claims settlement practice where it relied in good faith on ambiguities in older Massachusetts case law. (January 21, 2020)

In Castlepoint Insurance Company v. Southside Manhattan View LLC, the New York Supreme Court, Appellate Division, 1^st Department, the insurer issued a liability policy that contained a construction exclusion for bodily injury “in connection” with various operations related to the construction and alteration of buildings. The plaintiff in the underlying action was injured while working on a sprinkler system when he fell and came into contact with live electrical wires. Applying well-known principles of insurance contract interpretation, the court found that the insurer had “met its prima facie burden of demonstrating that the injured plaintiff’s work installing or repairing sprinklers was ‘in connection’ with the operations set out in the construction exclusion.” (January 16, 2020)

In Rawan v. Continental Casualty Company, the Supreme Judicial Court of Massachusetts held that a consent-to-settle clause in a professional liability insurance policy did not violate the Massachusetts Insurance Bad Faith statute, M.G.L. c. 176D. The court held that there was no legislative intent to preclude consent-to-settle clauses in professional liability policies, and recognized that consent-to-settle clauses serve a valuable purpose in the professional liability context, including protecting a professional’s reputation and good will, and encouraging professionals to obtain an important but voluntary line of insurance. The court also rejected the argument that only consent-to-settle clauses paired with hammer clauses are permissible. (December 16, 2019)

In Sayles v. Allstate Insurance Company, the Supreme Court of Pennsylvania, addressed whether an automobile insurance policy provision, which requires an insured seeking first-party medical benefits under the policy to submit to an independent medical exam (IME) whenever the insurer requires and with a doctor selected by the insurer, conflicts with the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL). The insured argued that allowing the insurance carrier to include an IME clause in the policy, requiring an IME whether or not good cause exists, constitutes “harassment” by the insurers and contravenes the multitude of insurance statutes designed to protect insurers from this type of conduct. The court found these IME clauses were in conflict with the statutory provisions designed to protect the insured and are void against public policy. (November 20, 2019)

In Kline v. Travelers Personal Security Insurance Company, the Superior Court of Pennsylvania addressed whether an insured may stack underinsured motorist benefits where the insurance company did not issue new rejection of stacking waivers when a second vehicle was added to the policy. The court held that the addition of another vehicle to the policy constituted a “purchase” of a new policy that required new waivers. Following the Supreme Court of Pennsylvania’s recent determination that household vehicle exclusions were against public policy, the court determined that insured was entitled to underinsured motorist benefits from both policies and was entitled to stack the benefits. (November 18, 2019)

In Nesby v. Fleurmond, the Superior Court of New Jersey, Appellate Division addressed whether a driver injured in a motor vehicle accident can seek personal injury protection (PIP) coverage for his unpaid medical expenses under policies issued to the tortious driver’s resident relatives that covered vehicles that were not involved in the accident. The court held that the injured driver was not entitled to benefits because the tortious driver did not actually live with the insured and was not driving an insured vehicle. (November 18, 2019)

In New Jersey Transit Corporation v. Certain Underwriters at Lloyd’s London, the Superior Court of New Jersey, Appellate Division, addressed whether a flood sublimit in insurance policies applied to the insured’s claim for water-related damage in Hurricane Sandy. The court held that the property damage was caused by “wind driven water” and storm surge from a “named windstorm” rather than flooding, therefore the insureds were entitled to the full coverage limits rather than the flooding sublimit. (November 18, 2019)

In River Farm Realty Trust v. Farm Family Casualty Insurance Company, the United States Court of Appeals for the First Circuit held that an insurance company did not violate the Massachusetts’ consumer protection or insurance bad faith statutes. First, the court held that the amount of time taken by the insurer to respond was not unreasonable, where the insured was responsible for a large part of the delay, and the only part of the delay attributable to the insurer was the result of an internal mistake in the file; no evidence suggested that it was the result of a desire to delay or bad faith, and the insurer was otherwise attentive to correspondences with the insured. The court also held that the disparities between the insurer’s initial estimate for the loss, its revised estimate, the insured’s estimate, and the amount ultimately awarded to the insured after a reference proceeding did not support a violation. The insured failed to show that the insurer acted unreasonably or deviated from industry practice in preparing the estimates. (November 19, 2019)

In Neiditch v. William Penn Life Insurance Company of New York, the New York Supreme Court, Appellate Division, Second Department, addressed whether an insurance company may rescind a policy based on an insured’s material misrepresentation in an application for insurance. According to the court, an insurance company may rescind a policy if an insured makes a material misrepresentation. The insurance company must prove that the misrepresentation was material by showing that it would not have issued the same policy had the insured supplied the correct information. Although the jury typically will determine whether a fact is material, a court may make a determination regarding materiality when the materiality is clear and not substantially contradicted. (November 13, 2019)

In Plotkin v. Republic-Franklin Insurance Company, the New York Supreme Court, Appellate Division, Second Department, addressed how the court determines whether an insurance company’s decision to disclaim coverage was timely. According to the court, an insurance company first has notice of a claim when it has sufficient knowledge of the basis for its right to disclaim coverage. An insurance company’s excuses for a delay will be insufficient if the basis for disclaiming coverage was readily apparent. However, if an insurance company can show that its delay was related to its thorough investigation of the facts of the claim, the delay will be excused. The reason for the delay, and not the length of the delay, is what is most important for the court to consider. (November 13, 2019)

In In Re Verizon Insurance Coverage Appeals, the Supreme Court of Delaware addressed whether several insurance carriers were obligated to cover costs incurred by the insured and its affiliates for their defense of several claims including breach of fiduciary duty, payment of unlawful dividends, and violations of fraudulent-transfer statutes. Coverage turned on whether these claims were “Security Claims” as defined in the policies: “a violation of any federal, state, local or foreign regulation, rule or statute regulating securities. . . .” The court found that common-law claims are not regulations, rules or statutes that trigger coverage under the policies. Further, the policies did not cover the defense of statutory violations because the alleged violations did not concern the purchase, sale or offer for sale of securities. (October 31, 2019)

In Joella v. Cole, the Superior Court of Pennsylvania considered two issues: (1) whether a landlord, through its insurance company, can maintain a subrogation action against a negligent tenant; and (2) whether the tenant was an implied co-insured under the landlord’s insurance policy pursuant to the terms of their lease. The court first noted that it had utilized the “case-by-case” approach to determine the availability of subrogation. Under this approach, Pennsylvania courts look to the circumstances of the particular case and examine the terms of a landlord’s insurance policy in conjunction with the provisions of the lease to determine whether a subrogation action may be maintained. Here, the court found that where the lease provision requires a landlord to maintain insurance on the building, the tenant is an implied co-insured under the landlord’s insurance policy based on the reasonable expectations of the parties as expressed in the lease. Accordingly, the landlord’s insurer cannot maintain a subrogation action against the tenant. (October 18, 2019)

In Healthcare Real Estate Partners, LLC v. Summit Healthcare Reit, Inc., the United States Court of Appeals for the Third Circuit examined whether a bankruptcy court can have jurisdiction, independent from the bankruptcy proceedings, over an 11 U.S.C. § 362(k) action seeking damages for violation of an automatic stay arising from the bankruptcy proceedings. While a § 362(k) claim may be adjudicated as a “core proceeding” under 28 U.S.C. § 157(b)(1), there is no requirement that the § 362(k) needs to be filed as part of an existing bankruptcy action. A bankruptcy court has jurisdiction because a § 362(k) is an independent private cause of action which is meant to vindicate a debtor’s right to an automatic stay during a bankruptcy proceeding. While it is necessary to institute a bankruptcy proceeding in order to institute a § 362(k) action, the institution of a new (or continuation of an existing) § 362(k) action does not depend on the continued existe

In Lomma v. Ohio National Life Assurance Corporation, the United States Court of Appeals for the Third Circuit addressed a breach-of-contract claim based on an insurance carrier’s denial of death benefits under a suicide exclusion in a life insurance policy. The court rejected the beneficiaries’ claim that this provision was ambiguous, finding that the language of the suicide exclusion unambiguously limits coverage to premiums paid where the insured commits suicide within the first two years of the policy. (October 8, 2019)

White and Williams attorneys Luke Repici, Edward Koch and Marc Penchansky secured this favorable result for our client.

In Commerce Insurance Company v. Szafarowicz, the Supreme Judicial Court of Massachusetts addressed whether an insurer, who had defended under a reservation of rights, was bound by a settlement/assignment agreement reached in the underlying case. The court held that the insurer was only bound by the agreement if the agreement was found to be reasonable under the totality of the circumstances. (October 1, 2019)

In Barnard v. The Travelers Home and Marine Insurance Company, the Supreme Court of Pennsylvania addressed whether an increase to the limits of underinsured motorist coverage for multiple vehicles that are insured under an existing policy constitutes a “purchase” for purposes of subsection 1738(c) of the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL). The court found that it does constitute a purchase under the MVFRL and explained that an increase of UIM coverage under such circumstances triggers an insurance company’s statutory obligation to offer an insured the opportunity to waive stacking of the new, aggregate amount of UIM coverage. (September 26, 2019)

In Sapa Exclusions v. Liberty Mutual Insurance Company, the United States Court of Appeals for the Third Circuit examined whether liability insurers are obligated to provide coverage to an insured manufacturer who settles a lawsuit alleging the manufacturer’s product was defective. The court reviewed key precedents and applied the plain language of the policies and the “four-corners” rule under Pennsylvania law to review whether the settlement was an “occurrence” under the multiple policies. The majority of the manufacturer’s policies contained definitions implicitly requiring an “occurrence” to be an unexpected/unforeseeable “accident,” which therefore excluded foreseeable product claims based on a manufacturer’s lack of quality control. However, a minority of policies further narrowed the definition of “accident” to mean “neither expected nor intended from the standpoint of the Insured,” thus introducing a subjective intent requirement which could alter the analysis with respect to whether there was a coverable occurrence. The court affirmed a grant of summary judgment on the majority of polices and remanded for further review on the minority of policies. (September 13, 2019)

White and Williams lawyers Patti Santelle, Shane Heskin and Zachery Roth obtained this successful result for our client in this appeal.

In Cortez v. Nugent, the New York Supreme Court, Appellate Division, Second Department, affirmed the Supreme Court’s decision denying the defendants’ motion for summary judgment on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The court held that the defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the accident by submitting competent medical evidence establishing, prima facie, that the alleged injuries to the cervical region of the plaintiff's spine and to the plaintiff's right shoulder did not constitute serious injuries under either the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d). However, the court affirmed that, in opposition, the plaintiff submitted evidence raising triable issues of fact as to whether he sustained serious injuries to the cervical region of his spine and/or to his right shoulder. (September 18, 2019)

In Lavery v. Restoration Hardware Long Term Disability Benefits Plan, the United States Court of Appeals for the First Circuit addressed whether a worker’s visit to his primary care physician regarding a skin lesion during the look-back period of the policy should disqualify his melanoma-related long term disability claim as a pre-existing condition. The court ruled that the employee was entitled to coverage because the primary care physician did not treat the melanoma, provide services for the melanoma, prescribe or recommend drugs for the melanoma, or diagnose his disabling disease as melanoma. (September 3, 2019)

In Allen v. Leon D. DeMatteis Construction Corporation, the New York Supreme Court, Appellate Division, 2d Department, addressed whether additional insureds under an insurance policy have an independent duty to provide an insurance company with notice of a claim. The court held that even if a primary insured has already notified the insurance company of the existence of a claim, additional insureds under the policy have an independent obligation to provide notice to the insurer of a claim. This obligation is limited, however, when multiple insureds, whether primary or additional, are united in interest or are not adverse to one another. When multiple insureds are united in interest, a notice on behalf of one insured is sufficient to give notice on behalf of those insureds who are united in interest. (August 28, 2019)

In Safe Auto Insurance Company v. Oriental-Guillermo, the Supreme Court of Pennsylvania considered whether an unlisted resident driver exclusion (URDE) in a personal automobile insurance policy violates the Motor Vehicle Financial Responsibility Law (MVFRL) when there is no requirement in the MVFRL that a vehicle owner identify all permissive users of his vehicle when obtaining insurance coverage. The court found that the policy’s clear and unambiguous URDE was enforceable and did not violate the MVRFL. (August 20, 2019)

In Greater Buffalo Accident & Injury Chiropractic, P.C. v. Geico Casualty Company, the New York Supreme Court, Appellate Division, 4^th Department, addressed the pleading requirements for a prima facie tort claim. An assignee of no-fault benefits commenced an action against an insurance company for, among other things, prima facie tort. The court held that the prima facie tort cause of action could not stand because the assignee failed to allege that the insurance company’s “sole motivation was disinterested malevolence,” failed to allege special damages, and was not sufficiently particular in that it did not include facts regarding the number of forms that the insurance company requested the assignee to resubmit and the number of claims involved. (August 22, 2019)

In Xudong Yang’s (Dependents’) Case, the Appeals Court of Massachusetts addressed a widow’s attempt to seek death benefits from a workers’ compensation insurer following her husband’s death in a car accident, which the widow claimed occurred during a business trip. The workers’ compensation policy application had listed the employees’ roles as sales and clerical work relating to an import/export business, and had not listed out-of-state travel. The court concluded that the trip had not been for business purposes, and noted that the decision was consistent with sound policy considerations because an insurer should not be liable for risks beyond those the insurer agreed to cover. (August 13, 2019)

In Paramount Insurance Company v. Federal Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, addressed how to determine which policy was the primary policy covering an insured in a personal-injury action. The court found that the trial court prematurely determined that the defendant-insurer’s policy was primary to other policies since discovery concerning policies issued to other parties in the litigation was still outstanding. Further, the court stated that “[t]o determine the priority of coverage among different policies, ‘a court must review and consider all of the relevant policies at issue.’” (July 23, 2019)

In Pennsylvania Manufacturers Indemnity Company v. Pottstown Industrial Complex LP, the Superior Court of Pennsylvania addressed the scope of coverage under a commercial general insurance policy for property damage caused by faulty workmanship. Because the claimant sought to recover for damage to its own property, stored at the insured’s facility, rather than property supplied by the insured, the court held that the claim fell within the definition of an “occurrence” under the policy. The court reasoned that an “occurrence” is not to be interpreted as a performance bond, but to provide coverage for the risk of damage the insured causes to another person’s property. (July 22, 2019)

In Sterngold Dental, LLC v. HDI Global Insurance Company, the United States Court of Appeals for the First Circuit addressed whether an intellectual property exclusion to advertising injury coverage applied to an insured’s claim for defense and indemnity of a trademark infringement action. The court held that the exclusion applied, finding that even if the complaint against the insured constituted an advertising injury, that injury arose out of alleged trademark infringement. (July 2, 2019)

In Frederick Mutual Insurance Company v. Pennsylvania Insurance Department, the Commonwealth Court of Pennsylvania addressed whether an insurer violated the Unfair Insurance Practices Act by cancelling the insured’s homeowners’ insurance policy due to her failure to make repairs to a chimney shared with an adjoining home. The court held the cancellation violated the Act because the insured attempted to make the repairs, and did make the repairs to the portion of the chimney on her property, and she was unable to repair the entire chimney because of her neighbor’s refusal to cooperate. (June 21, 2019)

In Styller v. National Fire & Marine Insurance Company, the Appeals Court of Massachusetts addressed whether an insurer was obligated to pay attorney’s fees and expert fees and expenses awarded against its insured pursuant to its policy’s supplementary payment provision that required the insurer to pay the “costs taxed” against its insured. The supplementary payment provision provided that the insurer “will pay, with respect to any claim we investigate or settle, or any ‘suit’ against an insured we defend . . . [a]ll costs taxed against the insured in the ‘suit.’” Holding that the insurer held no obligation, the court reasoned that the policy used the term “costs taxed” in the technical sense within the context of a legal proceeding. The court further explained that, within the context of a legal proceeding, “costs taxed” does not refer to attorney’s fees because costs and attorney’s fees are treated differently under Massachusetts law. (June 26, 2019)

In Certain Underwriters at Lloyds Subscribing to Policy PLH-0013397 v. Public Service Electric and Gas, the Superior Court of New Jersey, Appellate Division, held that a homeowner's damages are not limited to the cost of alternate shelter reimbursed by their homeowners insurance carriers and the homeowner may also seek additional damages based on a broader concept of inconvenience. (June 17, 2019)

In Ezell v. Lexington Insurance Company, the United States Court of Appeals for the First Circuit held that an insurance company had not violated the Racketeer Influenced and Corrupt Organizations Act (RICO) or otherwise fraudulently misrepresented the amount of payments that would be made under structured settlements to the claimants, even though the settlement agreements did not mention the 4% commissions that would be taken from the annuities by the life insurers who issued the annuities. The court reasoned that the insurer’s representation in the settlement agreements only concerned the amount to be annuitized, not the amount of the payments. (June 12, 2019)

In Matter of Zurich American Insurance v. Hereford Insurance Company, the New York Supreme Court, Appellate Division, Second Department, considered whether an automobile insurer seeking subrogated recovery on behalf of an insured was permitted to recover at arbitration where the insured had previously failed to recover from the tortfeasor at trial. The court found that because the insured was unsuccessful in proving the tortfeasor negligent at trial, the arbitrator was incorrect in finding the tortfeasor liable in the arbitration. (June 12, 2019)

In Carothers v. Progressive Insurance Company, the New York Court of Appeals found that insurance companies in New York State may withhold payment for medical services provided by professional corporations (which must be wholly owned by members of that profession) when there is “willful and material failure to abide by” state licensing and incorporation laws, even in the absence of fraud. (June 11, 2019)

White and Williams Partner Jay Shapiro successfully represented the insurance company in this case.

In Genworth Life Insurance Company v. Commissioner of Insurance, the Appeals Court of Massachusetts addressed whether insurance companies operating in Massachusetts can secure approval for proposed rate increases without using the Division of Insurance’s electronic form filing system, SERFF. The court held that insurance companies must use SERFF to secure rate increases, per the Division of Insurance’s prior bulletin, which was a form of sub-regulatory guidance. Despite the fact that the insurance company in question had provided the insurance commissioner with actual notice of its requested increase via Federal Express and email, its failure to make the request through SERFF rendered the request invalid. (June 3, 2019)

In Kurach v. Truck Insurance Exchange, the Supreme Court of Pennsylvania granted a Petition for Allowance of Appeal on the following issue:

Did the Superior Court err as a matter of law in finding that the limitation of payment of General Contractors Overhead and Profit from actual cash value in a replacement cost policy, although violative of binding precedent, was nonetheless valid and enforceable? (May 29, 2019)

In Biochemics, Inc. v. Axis Reinsurance Company, the United States Court of Appeals for the First Circuit addressed whether a pharmaceutical company and its CEO were entitled to damages based on the insurer’s breach of the duty to defend in connection with an SEC investigation against the company and its officers where the SEC investigation commenced prior to the inception of the policy. The court agreed with the insurer’s position that the SEC investigation was a “claim” (under the language of the policy) that was “first made” before the policy took effect, and therefore not covered. (May 23, 2019)

In Greater N.Y. Mutual Insurance Company v. Utica First Insurance Company, the New York State Supreme Court, Appellate Division, 1^st Department, addressed an insurer’s duty to indemnify its insured for damages sustained as a result of a building fire. Following an investigation, it became clear that employees of the insured lied to the insurer about using a torch on the roof of the building. The court found that the employees’ statements were a breach of the policy’s cooperation clause, and that as a result the insurer had no duty to indemnify the insured for the fire damage. (May 23, 2019)

In Villavicencio v. Erie Insurance Company, the New York State Supreme Court, Appellate Division, 2^nd Department, addressed an insurer’s right to disclaim coverage for untimely notice under the Insurance Law. The insurer disclaimed coverage to its insured after the insured had been properly served with the summons and complaint but failed to notify the insurer of the lawsuit until after a default judgment had been granted against it. The court held that the insurer was entitled to an irrebuttable presumption of prejudice under the Insurance Law since the insured’s liability had been determined by a court of competent jurisdiction prior to notice. Therefore, the insurer’s disclaimer was valid. (May 22, 2019)

In Navigators Insurance Company v. Scottsdale Insurance Company, the New York Supreme Court, Appellate Division, 1^st Department, addressed whether an insurer had to pay pre- or post-judgment interest that accrued after the insurer paid its limit of liability. The insurance policy had a per-occurrence limit of liability of $1 million. Consistent with the policy’s language, the insurer’s payment of the policy limit extinguished its obligation to pay any pre-judgment interest that might accrue after that date. In addition, the court held that under the policy’s language, the insurer’s unconditional payment of the policy limit to the plaintiffs in the underlying action before the entry of judgment also extinguished its obligation to pay any post-judgment interest. (May 9, 2019)

In Arch Insurance Company, et al. v. Murdock, et al., the Superior Court of Delaware held that an insurer which issued coverage denials based on a fraud exclusion, written consent provision, and cooperation clause did not act in bad faith in issuing those denials. The court noted that the insurer’s application of California law to its insurance policy, while incorrect, was reasonable and therefore did not constitute bad faith. While the court acknowledged that the issue of coverage is one of disputed fact, the issue of bad faith did not need to be submitted to the jury, as the insurer had reasonable grounds for relying on its defense to liability. (May 1, 2019)

In Liang v. Progressive Casualty Insurance Company, the New York Supreme Court, Appellate Division, Second Department, addressed how and when a court may grant rescission of an insurance policy. In the underlying action, the plaintiff sought coverage under an automobile insurance policy for the plaintiff’s deceased mother. Progressive denied coverage because the plaintiff’s deceased mother was not a “household resident” with the plaintiff. The court noted that the right to rescind a policy under New York law is available only when an insurer demonstrates that “the insured made a material representation.” The court held that the insurer failed to demonstrate that the insured made a material misrepresentation in the insurance application because “household resident” was an undefined term in the policy and was therefore ambiguous under the circumstances here. (May 1, 2019)

In Sosa v. Massachusetts Bay Insurance Company, the Superior Court of New Jersey, Appellate Division, addressed whether damage caused by a water-main break under a public street that released water that flowed down a driveway to a first-floor unit was excluded by the water damage exclusion of the homeowner’s policy as “flood,” “surface water,” or “water below the surface of the ground.” The court held that the homeowner’s claim was not excluded because a water-main break is not a natural phenomenon such as a flood or a rising surface water, nor was the water “below the surface of the ground” when it reached the property. (April 24, 2019)

In Anderson v. Allstate Insurance Company, the Supreme Court of the State of New York, Appellate Division, Third Department, addressed whether parties to an insurance contract may fairly shorten statute of limitations for breach of contract. A property owner commenced a breach of contract action against its insurer after the insurer denied coverage for a burglary. The court noted that while the statute of limitations generally starts to run on the date coverage is disclaimed, here the insurance policy contained language stating that, no suit could be brought “unless commenced within [24] months next after inception of the loss.” Because the property owner brought the lawsuit beyond 24 months of when the burglary occurred, the court held that the lawsuit was untimely and dismissed the lawsuit. (April 11, 2019)

In Breeze National., Inc. v. Century Surety Company, the New York Supreme Court, Appellate Division, 1st Department, considered whether the language in an additional insured endorsement covered the additional insured’s liability in a wrongful death action. The insurer had agreed to insure the additional insured only with respect to liability “caused, in whole or in part by” the primary insured’s acts or omissions. The insurer argued that the primary insured was never adjudicated to be negligent. However, the court found that the phrase “caused, in whole or in part by” included proximate cause, and a finding of negligence was not necessary. (March 26, 2019)

In Haines v. Taft, the Supreme Court of New Jersey, in a consolidated appeal, addressed whether the legislature intended to deviate from its highly regulated no-fault system of first-party self-insurance to cover medical expenses arising from automobile accidents when it amended the statutory scheme to allow an insured to elect smaller amounts of personal injury protection (PIP) under a standard policy. The court held that no evidence suggested a clear intention of the legislature to deviate from the carefully constructed no-fault first-party PIP system of regulated coverage. (March 26, 2019)

In Bradley v. William Penn Life Insurance Company of New York, the New York Supreme Court, Appellate Division, 2nd Department, considered whether the insurer properly disclaimed coverage under a life insurance policy because of a missed payment. The beneficiary claimed that the policyholder never received notice of premium due, as required by state law, but the insurer argued that it complied with the statute. The court found that the burden of proving valid cancellation of a policy rests with the insurer, and that the insurer in this case failed to meet its burden. The insurer was aware the policyholder had changed his address but failed to send a notice to that address. The policy was therefore valid at the time of the policyholder’s death. (March 20, 2019)

In All America Insurance Company v. Lampasona Concrete Corporation, the Appeals Court of Massachusetts addressed whether the insurer had no duty to defend or indemnify under a commercial general liability policy. The insured, a concrete subcontractor who had worked on the construction of a hospital, had been sued by the general contractor for improper installation of the concrete slab lying underneath the finished first floor of a hospital. Although the insurer had denied coverage in part because of an exclusion for the insured’s own work, the court concluded that that exclusion was not applicable where the faulty installation damaged other building components that were not the work of the concrete subcontractor. Although the insurer also argued there had been no “occurrence” to trigger coverage, the court concluded that the puncturing of the vapor barrier and migration of water through the concrete slab to the layer above it fit within the definition of “occurrence.” (March 19, 2019)

In Creamer v. Arbella Insurance Group, the Appeals Court of Massachusetts addressed whether a homeowner’s policy held by the seller of a property covered a homebuyer’s claim for damages. While the sellers owned the property, oil leaked from their fuel line contaminating the property, yet the sellers concealed the oil spill when selling the property to the homebuyer. The seller’s policy provided for coverage for property damage caused by an occurrence, which the policy defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in . . . ‘property damage.’” Concluding that the homeowner’s policy provided coverage for the homebuyer’s claim, the court explained that the homebuyer’s injury occurred from the initial, accidental release and not the subsequent concealment of the oil spill. (March 13, 2019)

In M&M Realty of New York, LLC v. The Burlington Insurance Company, the New York Supreme Court, Appellate Division, 1^st Department ,addressed the standard for determining when an insurance company is required to provide defense and indemnity for an additional insured. The court held that the allegations in the underlying complaint and the known facts suggested a reasonable possibility of coverage and the standard for determining an additional insured’s entitlement to defense was the same as that for determining a named insured’s entitlement to defense. (March 5, 2019)

In In re Progressive Specialty Insurance Company v. Guzmarino, the New York Supreme Court, Appellate Division, 1^st Department, addressed whether a petition made by an insurance company to stay an uninsured motorist arbitration was properly denied. The court stated that “on the initial application for a stay of arbitration, the burden is on the party seeking the stay to establish the existence of evidentiary facts, sufficient to conclude there is a genuine preliminary issue.” The court held that the insurance company “failed to meet its burden because its submission consisted of mere conclusory allegations.” (March 5, 2019)

In Easthampton Congregational Church v. Church Mutual Insurance Company, the United States Court of Appeals for the First Circuit held that an insurance policy issued to a church provided coverage for a partial ceiling collapse. Coverage turned on the definition of “decay,” which was not defined by the policy. The court held that the definition was ambiguous, and could refer to either “progressive decline” or “rot,” and that the ambiguity had to be resolved in favor of the insured church. (February 22, 2019)

In U.S. Specialty Insurance Company v. Navarro, the Supreme Court of New York, Appellate Division, 1st Department, addressed whether an insurer is equitably estopped from denying coverage because the insurer did not deny or disclaim coverage until approximately four years after it first received notice of a claim. In the underlying action, the insured submitted a claim for benefits as a supplementary uninsured/underinsured motorist under a policy issued by the insurer. The insured did not challenge that the vehicle was outside the scope of the policy. The court held that “equitable estoppel may not be invoked to create coverage in this case, since the [plaintiff] was not insured under the policy in the first instance.” The court also held that the insurer’s “denial or disclaimer of coverage was not untimely…[s]ince the denial of coverage is based on noncoverage rather than an exclusion or defense.” (February 5, 2019)

In Cohen & Slamowitz, LLP v. Zurich America Insurance Company, the Supreme Court of New York, Appellate Division, 2d Department, addressed how and when a court ought to declare that policy language is ambiguous. In the underlying action, the plaintiff sustained damage to its office telephone system in downtown Manhattan as a result of Hurricane Sandy. After filing a claim for business income losses, the defendant disclaimed coverage on the basis that the damages were not the result of physical damages to “dependent property” because the premises where the telephone system was damaged was not owned by the plaintiff. The plaintiff challenged the disclaimer on those bases. The Second Department held that “[t]he mere assertion by one that contract language means something different to him or her, where it is otherwise clear, unequivocal and understandable when read in connection with the whole contract, is not in and of itself enough to raise a triable issue of fact” on summary judgment. The Second Department held that, based on the clear policy language, “the defendants established their prima facie entitlement to judgment as a matter of law.” (January 23, 2019)

In Gallagher v. Geico Indemnity Company, the Supreme Court of Pennsylvania addressed whether an insured injured while riding his motorcycle could stack the UIM limits under his separate auto policy on top of the UIM limits for his motorcycle policy. At issue was the applicability of a provision in the automobile policy which excluded UIM coverage for injuries suffered while occupying a vehicle owned by the insured but not insured under the automobile policy. The court held the exclusion was unenforceable because it acts as a de facto waiver of stacked coverage without an express written waiver, and therefore, violates the Pennsylvania Motor Vehicle Financial Responsibility Law. (January 23, 2019)

In Katchen v. Government Employees Insurance Company, the Superior Court of New Jersey, Appellate Division, held that an auto insurer may combine UM and UIM coverage in a single section and include exclusions not listed on the policy’s declaration page. The court also held an insurer may exclude UIM coverage for an accident involving a vehicle owned by the insured but not covered under the subject policy. (January 22, 2019)

In James v. State Farm Insurance Company, the Superior Court of New Jersey, Appellate Division, addressed the applicability of immunity afforded to motor vehicle insurance providers under N.J.S.A. 17:28-1.9, where the plaintiffs argued the insurer provided lesser coverage than the plaintiffs had allegedly requested. The court held that the plaintiffs had an affirmative duty to review the insurance policy obtained from the insurer for correctness. The court further held that plaintiffs were obligated to alert the insurer of the inconsistencies between what they allegedly requested and what the policy provided. (January 18, 2019)

In D.K. Property, Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., the New York Supreme Court, Appellate Division, 1st Department, reaffirmed that a policyholder may sue an insurer for consequential damages resulting from an insurer’s failure to provide coverage if such damages were foreseen or should have been foreseen when the contract was made. The court concluded that the policyholder stated a claim for consequential damages because the complaint specified the types of consequential damages claimed and alleged that such damages were reasonably contemplated by the parties prior to contracting. (January 17, 2019)

In Scottsdale Insurance Company v. Byrne, the United States Court of Appeals for the First Circuit addressed whether an insurer had no duty to defend and indemnify its insured on the grounds that the claims were excluded from coverage. The court held that the insurer had a duty to defend because the complaint left ambiguous whether all of the insured’s alleged misconduct fell within the exclusions and the insurer failed to demonstrate grounds for allocating the judgment between covered and uncovered claims. (January 16, 2019)

In Montgomery Hospital and Medical Center v. Bureau of Medical Care Availability and Reduction of Error Fund, the Commonwealth Court of Pennsylvania considered an action in which a patient sued a hospital for malpractice because a surgical sponge was left inside the patient. Under the Medical Care Availability and Reduction of Error (MCARE) Act, the MCARE fund provides coverage for healthcare providers when a patient asserts a claim more than four years after an alleged negligent act, but within the statute of limitations. While the underlying surgery occurred more than four years prior to the claim by the patient, the patient had received multiple treatments and consultations by radiologists who the MCARE fund argued were agents of the hospital. The court determined that the MCARE fund could decline coverage where an apparent agency relationship existed between the hospital and the radiologists in order to show “ongoing” care by the healthcare provider. The MCARE fund could therefore assert that the ongoing care removed the underlying medical malpractice action from the four-year window. (January 4, 2019)

In Stennett-Bailey v. Allstate Insurance Company, the New York Supreme Court, 2d Department, held that an insured was not entitled to benefits where the insured failed to make timely premium payments. The court granted summary judgment to the insurance carrier because it submitted evidence which demonstrated that the plaintiff was notified that the policy would be canceled if the premium was not paid by a certain date. (December 26, 2018)

In Homeland Insurance Company of New York v. Corvel Corporation, the Supreme Court of Delaware addressed the statute of limitations for bad faith insurance actions. Holding the insured’s action time-barred under Delaware law, the court concluded that a bad faith action accrues when the necessary elements of the action may be pleaded. The court explained that the bad faith elements may be pleaded before a judicial determination of coverage. (November 20, 2018)

In Alpizar-Falls v. Favero, a proposed class action claim, the United States Court of Appeals for the Third Circuit addressed the extent to which the Consumer Fraud Act applies to the performance of insurance contracts. The court held that a plaintiff can state a viable claim under the Consumer Fraud Act where an insurance company is alleged to have fraudulently performed a contract with a consumer. (November 15, 2018)

In Lee v. 354 Management, Inc., the Supreme Court of New York, Appellate Division, 2d Department, addressed whether an insurer had a reasonable excuse for defaulting on an answer. In the underlying action, an insurer with a duty to defend its insured received a complaint filed against its insured, but failed to retain counsel and file an answer on behalf of the insured within the prescribed time. The insurer averred that the time delay was due to the fact that it was negotiating with another party “as to who had the duty to defend” under the circumstances, and that this time delay is a “reasonable excuse” under the Civil Practice Law & Rules (CPLR) for its default. The Second Department disagreed, holding that where the defendant’s insurance carrier knowingly permitted the default to occur, such a circumstance did not constitute “a reasonable excuse for failing to answer the complaint.” (November 14, 2018)

In E.E. Cruz & Company, Inc. v. Axis Surplus Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, addressed whether the plaintiff insured, a contractor on a deck replacement project on the Throgs Neck Bridge, was entitled to recover under the defendant insurers’ insurance policies for remediation costs the insured incurred and damages awarded against the insured as a result of a fire that broke out on the bridge during the performance of the insured’s work. The court held that the costs were covered under the policies. In so holding, the court rejected the insurers’ argument that the remediation costs undertaken by the insured were voluntary payments given the emergency nature of the remediation required and that the insured’s damages would grow without remediation. (October 30, 2018)

In State Farm v. Cavoto, the Superior Court of Pennsylvania held that, pursuant to the Pennsylvania Motor Vehicle Financial Responsibility Law, chiropractors are not entitled to reimbursement for therapeutic exercises provided to a patient injured in a car accident when responsibility for supervising those exercises is delegated by the chiropractor to adjunct unlicensed personnel. (October 17, 2018)

In Repwest Insurance Company v. Country-Wide Insurance Company, the Supreme Court of New York, Appellate Division, 1st Department, considered whether “an automobile liability policy’s territory of coverage clause that covers any accident within the United States and the occurrence of the accident in the forum state are sufficient to confer personal jurisdiction over the primary insurer of the offending vehicle.” The court found that the connection is not sufficient to comport with federal due process. “Federal due process requires first that a defendant have minimum contacts with the forum state such that the defendant should reasonably anticipate being haled into court there, and second, that the prospect of having to defend a suit in the forum state comports with traditional notions of fair play and substantial justice.” The court found that the defendant’s territory of coverage clause did not establish minimum contact with the forum state. Further, the defendant had no connection with the forum state, and thus, conferring jurisdiction also violates fair play and substantial justice. (October 2, 2018)

In Guntrum v. Citicorp Trust Bank, the Superior Court of Pennsylvania addressed whether a default judgment and subsequent damages award was properly entered against a credit disability insurer. The court held that where the insurer failed to appear to contest damages, the property owner’s lay testimony as to the value of his property was competent and could be relied upon. (September 21, 2018)

In Robinson v. Global Liberty Insurance Company of New York, the New York Supreme Court, Appellate Division, 2d Department, addressed whether an insurer properly denied coverage for an underlying motor vehicle accident on the ground that the insureds failed to cooperate in the investigation and defense of the underlying action. The court explained that, to effectively deny coverage based upon lack of cooperation, the insurer must demonstrate that it acted diligently in seeking to bring about the insured’s cooperation, that the insurer’s efforts were reasonably calculated to obtain the insured’s cooperation, and that the insured’s attitude after the insured’s cooperation was sought was one of “willful and avowed obstruction.” The court held that evidence demonstrating that the insurer hired an investigator to locate one of the insureds, and that the investigator communicated with that insured but that the insured refused to cooperate was sufficient to meet the “heavy” burden of proving lack of cooperation. (September 19, 2018)

In QBE Americas, Inc. v. ACE American Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, addressed whether a Fee Arrangement Exclusion contained in insurance policies barred coverage for underlying actions which alleged that the plaintiffs, a group of insurance companies who deal in lender-placed insurance, “charged excessive premiums and/or engaged in various types of misconduct in connection with their lender-placed insurance business.” In finding that the trial court interpreted the Fee Arrangement Exclusion too broadly, the court explained that the relevant question is not whether the underlying actions “concern” the insureds’ compensation system generally because the Fee Arrangement Exclusion only applies to claims “alleging” or “arising out of allegations” that the insureds were connected with the prohibited conduct identified in the exclusion. (September 20, 2018)

In Lupu v. Loan City, LLC, the United States Court of Appeals for the Third Circuit addressed the scope of the duty of a real estate title insurer in Pennsylvania to defend the insured party against claims brought by the borrower/mortgagor. The court held that under Pennsylvania law, the insurer was not bound by the “complete defense” rule, whereby a single covered claim triggered an obligation for the title insurer to defend the entire action, including claims not covered under the policy. (September 10, 2018)

In Clemens v. New York Central Mutual Life Insurance Company, the United States Court of Appeals for the Third Circuit held that the wholesale denial of a petition for $946,526.43 in attorney’s fees in a bad faith action was proper and, in doing so, formally endorsed the proposition that, when a fee-shifting statute provides a court with discretion to award fees, the court’s discretion allows it to deny the request altogether if the amount sought is “outrageously excessive” based on the circumstances. (September 12, 2018)

In Holyoke Mutual Insurance Company in Salem v. Vibram USA, Inc., the Supreme Judicial Court of Massachusetts held that the allegations in the underlying complaint were sufficient to trigger the insurers’ duty to defend the insured under a provision of the policies covering the improper use of another’s advertising idea. There, the insured had been sued by the estate of a famous marathon runner for allegedly improperly using the runner’s name to advertise the insured’s running shoes. The complaint generally alleged that the runner’s family used his name to advertise and promote their various running-related ventures. The insurers argued that the complaint raised claims related only to the runner’s right of publicity, and not an advertising idea. The court held that because coverage focuses on the nature of the claim, not its relative strengths or weaknesses, the general allegations in the complaint were sufficient to trigger the insurers’ duty to defend. The court also rejected the insurers’ argument that an advertising idea was required to have secondary meaning or otherwise embody principles of trademark law. (September 12, 2018)

In LifeWatch Services, Inc. v. Highmark, Inc., the United States Court of Appeals for the Third Circuit addressed the viability of an antitrust claim under the Sherman Act related to the denial of insurance coverage for telemetry monitors. Because the court found that plaintiff adequately pleaded both an agreement among defendants to deny coverage and an unreasonable restraint of trade arising from that agreement, plaintiff’s antitrust claim was viable. It also found that plaintiff had standing because it properly alleged antitrust injury. However, the court remanded for determination of whether the McCarran-Ferguson Act – which provides that the Sherman Act does not apply to the business of state-regulated insurance – exempts defendants from antitrust liability. (August 28, 2018)

In Colella v. GEICO General Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether an insurer can be collaterally estopped from contesting coverage in a declaratory judgment action where it failed to intervene in the underlying action against the insured. The court found that collateral estoppel did not apply because the insurer was not a party, or in privity with a party, to the underlying action. (August 22, 2018)

In RSI Bank v. The Providence Mutual Fire Insurance Company, the Superior Court of New Jersey, Appellate Division, addressed whether an indemnification agreement could be a valid restitution condition of pre-trial intervention in a criminal matter. The court held that such a condition is appropriate only if the specific amount is stated and there is an assessment of the participant’s ability to meet the obligation. (August 7, 2018)

In Personal Service Insurance Company v. Relievus, the Superior Court of New Jersey, Appellate Division, resolved a conflict between New Jersey laws regarding the time for appeal from an arbitrator's decision regarding personal injury protection benefits. The court held that the 45-day time period to file a summary action with the court is tolled if the appellant files an appeal within the 30-day time frame for appeal to a three-person panel. (August 3, 2018)

In In Re TIAA-CREF Insurance Appeals, the Supreme Court of Delaware addressed the issue of whether a financial institution’s practice of retaining profits from selling shares after the date an investor requested those shares be sold amounted to ill-gotten gains that were uninsurable under New York law. The court found that these profits were proper as they were part of a risk-sharing arrangement, and as it did not create an opportunity for the financial institution to profit at its investors’ expense. The court thus held that New York’s public policy of prohibiting enforcement of insurance agreements in cases of disgorgement did not apply to the facts of this case. (July 30, 2018)

In Piller v. Ostego Mutual Fire Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed an insurer’s decision to disclaim coverage and void a policy due to misrepresentations on the insured’s application. “To establish the right to rescind an insurance policy, an insurer must show that its insured made a material misrepresentation of fact when he or she secured the policy . . . A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented.” The court ultimately granted the insurer’s motion for summary judgment because the application contained a material misrepresentation about the amount of time the insured spent in the home. (August 1, 2018)

In One Reason Road, LLC v. Seneca Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether a landlord was entitled to coverage as an additional insured under an insurance policy the defendant insurer issued to the landlord’s tenant with respect to an underlying personal injury action. In holding that the insurer was obligated to defend and indemnify the landlord for the underlying action, the court found that the underlying accident fell within the scope of the additional insured provision of the policy, which provided that the landlord was only an additional insured with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to the tenant. The evidence submitted by the landlord established that the underlying accident occurred on a portion of the subject property that had been leased to the tenant. (July 25, 2018)

In Roemer v. Allstate Indemnity Insurance Company, the Supreme Court of New York, Appellate Division, 3d Department, reviewed a bad-faith claim asserted against a property insurer. After a fire, the insurer began advancing policy proceeds to the insured during a 16-month period for debris removal and other services. Then the insurer denied coverage citing a “lack of insurable interest” in the property after it was discovered that the insured did not own the property. The court held that the defendant failed to present any admissible evidence to explain why it ultimately denied coverage, especially after the defendant was covering costs for 16 months. The court also found that the insurer failed to raise any triable issues of fact, especially when the insured submitted evidence that she made her insurance agent aware of her lack of ownership of the subject property, and the insurer never indicated to the insured that coverage might ultimately be denied if it was found that the insured did not own the property. (July 19, 2018)

In Continental Insurance Company v. Honeywell International, Inc., the Superior Court of New Jersey, Appellate Division, held that the continuous-trigger theory applied to an insurance coverage dispute wherein a defendant manufacturer continued to manufacture asbestos-containing products after insurance for those products became unavailable. The court refused to recognize an equitable exception to the unavailability exception to the continuous-trigger theory which would have forced the defendant manufacturer to contribute to the allocation of available insurance. (June 27, 2018)

In Cohen v. Sive, Paget & Riesel, P.C., the New York Supreme Court, Appellate Division, 1st Department, addressed whether a law firm committed malpractice by failing to advise its client to promptly notify its insurer of its claim as required by the client’s policy. The law firm argued that its client knew of the claim a month before it retained the law firm, and therefore the insurer would have denied the claim anyway. The court held that the record did not conclusively demonstrate that a month’s delay would have precluded coverage; entry of summary judgment was therefore inappropriate. (June 14, 2018)

In State Farm Fire and Casualty Company v. McCabe, the New York Supreme Court, Appellate Division, 3d Department, addressed whether an insurance carrier was entitled to a declaration that a homeowner’s insurance policy did not cover an underlying action arising from an assault because the injuries fell within an exclusion for intended injuries or willful and malicious acts. The court held that because the issues as to insurance coverage and exclusions were not identical to the issues decided in the related criminal proceeding and the insured did not have a full and fair opportunity to address some of the issues in the criminal proceeding, collateral estoppel did not apply. The court also held that the insurer failed to establish that some of the insured’s injuries were unintended so as to bar coverage under the policy exclusion. (June 14, 2018)

In State Farm v. Dooner, the Superior Court of Pennsylvania addressed whether a passenger's automobile insurance covered an accident when the passenger grabbed the steering wheel, causing an accident. The court held that the grabbing of the steering wheel did not create possession of the vehicle by the passenger such that her insurance policy would apply and even if it had created possession, that possession would not be lawful such that the coverage would apply. (June 4, 2018)

In Berg v. Nationwide Mutual Insurance Company, Inc., the Superior Court of Pennsylvania addressed whether an insurer acted in bad faith by repairing a vehicle rather than declaring it a total loss. The court held that an insurer’s obligation to not look to its own economic considerations in order to deprive the insured of the fair value of its claim, does not preclude the insurer from employing a formula to determine whether a damaged vehicle is an economic total loss. Accordingly, the insurer did not act in bad faith by relying on an appraisal that considered the vehicle’s salvage value and there was no evidence of record suggesting the vehicle was beyond repair. The court further held that an insurer’s duty of good faith and fair dealing does not necessarily encompasses an inspection of repairs prior to returning a vehicle to an insured. (June 5, 2018)

In AIG Property Casualty Company v. Cosby, the United States Court of Appeals for the First Circuit held that an insurer had a duty to defend Bill Cosby under a homeowner's policy and an umbrella policy in defamation suits brought by women who had accused him of sexual assault. The court rejected the insurer’s claim that the “sexual misconduct” exclusions in the policies barred coverage. The court held that a more specific “sexual misconduct” exclusion in the umbrella policy applicable to limited charitable board directors' and trustees' liability rendered the more general “sexual misconduct” exclusion ambiguous, such that the insurer was required to defend. (June 7, 2018)

In State of New Jersey v. McIntyre-Caulfield, the Superior Court of New Jersey, Appellate Division, held that the potential for a guilty plea to cause “devastating personal financial havoc” was sufficient good cause to permit a civil reservation. The court recognized that a guilty plea without a reservation could be used as an admission in a pending civil suit for wrongful death and also as a basis to deny insurance coverage, leaving the defendant in financial ruin. (May 18, 2018)

In Contact Chiropractic, P.C. v. New York City Transit Authority, the New York Court of Appeals addressed whether the three-year statute of limitations that governs disputes with respect to penalties created by statute applied in an action to recover first-party benefits from a party that is self-insured. The court determined that the source of the claim was wholly statutory, meaning that the three-year period of limitations should control. (May 1, 2018)

In Turner Construction Company v. Endurance American Specialty Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, considered whether an architect and a construction manager were entitled to additional insured status under contractor’s liability insurance policies where the property owner and the contractor entered into a written contract, and the contractor’s policies provided that they would provide an additional insured status to “any person or organization with whom [the contractor] agreed, because of a written contract or written agreement or permit to provide insurance such as is afforded under this policy . . . .” The court held that the architect and the construction manager were not additional insureds because “to obtain additional insured status, [they] were required to have a direct contract with [the contractor]. Because [they] had [no] such agreement with [the contractor], they do not qualify for coverage under the language of the additional insured endorsement.” (May 3, 2018)

In Nadkos, Inc. v. Preferred Contractors Insurance Company Risk Retention Group LLC, the New York Supreme Court, Appellate Division, 1st Department, considered the issue of “first impression” whether a risk retention group (RRG)—which is a liability insurance company created by organizations or persons engaged in similar business or activities—is required to comply with New York Insurance Law § 3420(d)(2), which requires a timely notice of disclaimer of coverage. The court held that a foreign RRG, formed in another state, “does not need to comply with § 3420(d)(2) because it is preempted by” the federal Liability Risk Retention Action of 1986 (LRRA), 15 USC § 3901, et seq.. Specifically, the court held that, in enacting the LRRA, that “Congress intended to exempt [risk retention groups] broadly from state law requirements that make it difficult for risk retention groups to form or to operate on a multi-state basis.” (May 3, 2018)

In Lola Roberts Beauty Salon, Inc. v. Leading Insurance Group Insurance Company, Ltd., the Supreme Court of the State of New York, Appellate Division, 2d Department, addressed whether an insurance company could be liable for consequential damages for the alleged failure to timely investigate, adjust, and settle a beauty salon’s property damage claim. The court held that, even if the insurance company breached its express and implied duties handling the salon’s claim, the salon was not entitled to consequential damages because the insurance carrier’s alleged injurious conduct was not a proximate cause of the salon’s loss of business. (April 18, 2018)

In Navigators Insurance Company v. Murdock, the Supreme Court of Delaware addressed whether an insurance company was entitled to interlocutory appeal of a partial denial of its motion for summary judgment on whether Delaware law applied to the issues and whether Delaware public policy prohibited the insurer from paying for the insured’s fraud. The court held interlocutory appeal was not warranted because applications for interlocutory appeal are addressed to the sound discretion of the court and the “strict standards” for certification were not met. (April 6, 2018)

In Skiffington v. Liberty Mutual Insurance Company, the Appeals Court of Massachusetts held that a third-party claimant was not entitled to reimbursement for loss-of-use of her vehicle, or fees related to title, registration, and inspection. There, the third-party claimant’s vehicle was declared a total loss after an accident in which the insurer’s insured was determined to be at fault. The insurer reimbursed the third-party claimant for the loss of her vehicle. The third-party claimant then filed a bad faith action seeking recovery of damages for loss-of-use of her vehicle, as well as for payment for title and registration fees, and the residual value of her inspection sticker. The court held that the third-party claimant was not entitled to recover loss-of-use damages because it was undisputed that she had no out-of-pocket loss-of-use costs. The court also held that the third-party claimant was not entitled to recover damages related to the title, registration, and inspection, because they did not constitute “property damage,” and they were not otherwise covered under any other provision of the standard automobile policy. (March 8, 2018)

In United National Insurance Company v. Travelers Property Casualty Company of America and Zurich-American Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, addressed whether a motion court properly dismissed an insurer’s causes of action for equitable indemnity and equitable reapportionment. In affirming the motion court’s order, the court held that no recognized cause of action for equitable indemnity and equitable reapportionment exists under New York law. (February 27, 2018)

In Dae Associates, LLC v. AXA Art Insurance Corporation, the Supreme Court of New York, Appellate Division, 1st Department, addressed the scope of coverage provided to an art gallery under an all-risk policy of insurance, with regard to purchases of stolen art work made at the art gallery. The policy provided coverage for loss or damage from any external cause. The court found that this coverage did not extend to defective title, and as such the policy did not apply to the art gallery’s contractual liability to purchasers of stolen artwork that was returned to its rightful owner. (February 13, 2018)

In Migliaro v. Fidelity National Indemnity Insurance Company, the United States Court of Appeals for the Third Circuit addressed whether, under the National Flood Insurance Program, the insurer’s rejection of a policyholder’s proof of loss constituted a “written denial of all or part of the claim.” The court held that the rejection of a proof of loss is not a per se denial of the claim in whole or part, but when a policyholder files suit against the insurer in response to the rejection, the policyholder will be deemed to have treated it as a denial of the claim. (January 29, 2018)

In Calleja v. A1 229 West 42nd Street Property Owner, LLC, et al., the Supreme Court of New York, Appellate Division, 1st Department, considered whether a landlord’s action against its tenant was barred by the “Stipulated Order” in the tenant’s bankruptcy proceeding, wherein the landlord waived and released any claims or causes of action arising under its lease with the tenant, and the lease was “rejected and terminated.” The court held because the potential insurance proceeds are not included in the bankruptcy estate, the third-party action against the tenant is not barred by the “Stipulated Order” in the tenant’s bankruptcy proceeding. (January 18, 2018)

In Netherlands Insurance Company v. Endurance American Specialty Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, addressed whether an informal bid proposal document was a written contract within the meaning of an additional insured endorsement that afforded coverage to “[a]ny entity required by written contract . . . to be named as an insured.” The court held that – although the parties may have intended to execute a more formal agreement later – the proposal constituted a written contract within the meaning of the additional insured endorsement and required the contractor to obtain an insurance policy naming the owner as an additional insured. (January 9, 2018)

In Graftech International, Ltd. v. Pacific Employers Insurance Company, the Court of Appeals of Ohio addressed whether a pollution exclusion in an aluminum manufacturer’s policy precluded coverage for personal injury lawsuits brought by workers who allege they were injured by a hazardous substance introduced into the work environment during the smelting process. In approving the application of the exclusion, the court found that a localized release of substances in one part of a plant is sufficient to constitute a fouling of the “environment” as defined in the exclusion. The court noted that “environment” was defined to include a “structure or the air therein,” which would include the air inside a manufacturing plant. (December 28, 2017)

In Vertex Restoration Corporation v. Catlin Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether a subsidence exclusion in a commercial general liability insurance policy excluded coverage for costs incurred by a general contractor in repairing damage to a building in the course of new construction. The court held that the insurer failed to establish that the subsistence exclusion applied to the general contractor’s loss. (December 20, 2017)

In Erie Insurance Exchange v. Moore, the Superior Court of Pennsylvania addressed whether an insurer owed a duty to defend and indemnify an insured in the context of a personal injury claim arising from the infliction of a gunshot wound during an altercation between an insured and a third party. The policies at issue provided coverage for an occurrence or accident, and excluded coverage for conduct that intended or expected harm. The court found that the alleged events – in which a chaotic brawl ensued and the insured fired his gun wildly in an attempt to fight off the third party – fit within the applicable policies’ definition of a covered occurrence, rather than the definition of excluded conduct deliberately intended to inflict harm. Accordingly, the court held that a duty to defend and indemnify was owed. (November 22, 2017)

In Ashkenazi v. AXA Equitable Life Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed an insurer’s counterclaim for fraud against its insured for material misrepresentations contained in the insured’s applications. The Court found for the insurer reasoning that the applications grossly overstated his financial circumstances. The insurer also provided evidence of its underwriting manual and practices indicating that but for the misrepresentations, it would not have issued the policies. (November 30, 2017)

In Mount Vernon Fire Insurance Company v. Visionaid, Inc., the United States Court of Appeals for the First Circuit held that a coverage dispute between an insured and its insurer did not present a conflict of interest that would permit the insured to choose its own attorney to defend a suit brought by an ex-employee alleging discrimination. The court reasoned that although the insurer refused to pay for defense counsel to bring embezzlement counterclaims against the ex-employee, it still had a common interest with the insured in supporting those counterclaims to provide leverage in the underlying lawsuit. No evidence was provided that assigned defense counsel was trying to torpedo those counterclaims. (November 15, 2017)

In Ralex Services, Inc. v. Southwest Marine & General Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether the defendant-insurer was obligated to provide coverage to or indemnify the plaintiff-insured in an underlying action where the insured settled the underlying action without seeking the insurer’s prior consent. Because the insured undertook its own defense in the underlying action, agreed to settle the underlying action, and incurred defense costs without first obtaining the insurer’s consent, the court held that the insured was not entitled to insurance coverage for the underlying action. (November 8, 2017)

In Celani v. Allstate Indemnity Company, the New York Supreme Court, Appellate Division, 4th Department, addressed whether the defendant-insurer was required to disclose pre-disclaimer claim notes containing statements made by the insured and a legal opinion prepared by the insurer’s outside counsel. In requiring disclosure of the pre-disclaimer claim notes, the court explained that there must be full disclosure of accident reports prepared in the ordinary course of business that were motivated, at least in part, by a business concern other than preparation for litigation. In contrast, the court held that disclosure of the legal opinion and related claim notes was not proper because, although reports prepared in the regular course of business are discoverable, documents prepared by an attorney that are primarily of a legal character and made to furnish legal services are privileged and not discoverable, regardless of whether there was pending litigation at the time they were prepared. (November 9, 2017)

In Great Divide Insurance Company v. Lexington Insurance Company, the Supreme Judicial Court of Massachusetts addressed the priority of coverage between two excess automobile insurance policies that both covered a single motor vehicle accident involving the employee of an insured refuse company, who struck and killed a bicyclist while driving a garbage truck owned by a different insured company. The policy issued to the refuse company was a hybrid policy, which provided primary coverage where the accident involved a vehicle owned by the refuse company. It also contained an “other insurance” clause which stated that, for non-owned vehicles, it was excess “over any other collectible insurance.” The policy issued to the owner of the truck was a true excess policy. The insurer for the truck owner argued that the fact that the refuse company’s policy mostly covered primary risk, and the premium charged was in line with a primary policy, meant that its “other insurance” clause did not have the usual meaning of such clauses, such that the refuse company’s hybrid policy must be exhausted before the truck company’s true excess policy was triggered. The court rejected those arguments, and held that both policies covered the loss equally to the extent of their respective policy limits. (November 1, 2017)

In One Beacon Insurance Company v. Celanese Corporation, the Appeals Court of Massachusetts held that an insurer need not reimburse attorney's fees incurred by its insured after the insurer agreed to defend and indemnify its insured without reservation of rights, and its insured refused to cede control and permit that insurer to select defense counsel. The court found that the insurer had the right to control its insured’s defense because it waived any reservation of rights, and the insurer did not have a conflict of interest that would prevent it from exercising that control. The court noted that the insured had not procured reputation insurance and nothing under the policy required the insurer to protect the insured’s reputation by defending against baseless claims instead of settling. (October 16, 2017)

In Koerner v. Geico Casualty Company, the Superior Court of Pennsylvania addressed when an insurance coverage lawsuit is mooted by the insurance carrier’s decision to tender the policy limits. The court held that, even though the insured refused to accept the carrier’s payment of policy limits, the breach-of-contract claim was moot because the insured was entitled to no more than the policy limits. Consequently, the court held that the insured’s request for declaratory relief based on purported discovery violations concerning the breach-of-contract claim was also mooted. (October 16, 2017)

In Air Master & Cooling, Inc. v. Selective Insurance Company of America, the Superior Court of New Jersey, Appellate Division, considered whether several successive commercial general liability insurance policies were triggered by a lawsuit involving construction defects that resulted in progressively worsening latent property damage. For the first time, the court adopted the “continuous-trigger” theory of coverage in the construction defect context. The “continuous-trigger” theory aggregates coverage from all insurers that were on the risk from the date the defect was created through the date the property damage manifested. (October 10, 2017)

In Burke v. Independence Blue Cross, the Supreme Court of Pennsylvania addressed whether a 2008 Amendment to the Insurance Company Law of 1921 requiring private insurance companies to provide coverage for treatment of autism spectrum disorders invalidated express, contractual place-of-services exclusions pertaining to the delivery of such services in schools. The court held that the policy’s place-of-services exclusion is ineffective under the 2008 Amendment because it forecloses coverage pertaining to the categories of care specified in the law. (October 5, 2017)

In Good v. Frankie & Eddie’s Hanover Inn, LLP, the Superior Court of Pennsylvania held that the absence of definitions for the term “occurrence” and the phrase “each common cause limit” in an insurance policy did not render the policy ambiguous such that the aggregate limit was available for a single liquor liability claim. (September 21, 2017)

In Safe Auto Insurance Company v. Oriental-Guillermo, the Superior Court of Pennsylvania addressed whether automobile insurance coverage that specifically excluded non-relative drivers with whom the policyholder lived was enforceable under the Motor Vehicle Financial Responsibility Law. The court held that the exclusion did not violate public policy, placing the burden on the insured to name non-relative household members on automobile insurance policies rather than placing the burden on the insurance company to insure every possible unknown household member. (September 18, 2017)

In The Burlington Insurance Company v. NYC Transit Authority, the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insurance claimant may be permitted to refuse to honor its own contractual indemnification obligations regarding a personal injury claim when the claimant’s insurer has become subrogated to the underlying claim. The court found that allowing the claimant to refuse to honor its own contractual indemnification obligations would create an unjust windfall to the claimant, who already received a payment from the insurer to settle the underlying personal injury action. (August 22, 2017)

In Burlington Insurance Company v. NYC Transit Authority, the New York Supreme Court, Appellate Division, 1^st Department, addressed the issue of when an insurance company can be estopped from disclaiming coverage. At issue was whether a New York City municipal entity was owed coverage as an additional insured for allegations in an underlying action, under an insurance policy issued to a third party. After the court determined that the city entity was not an additional insured under the subject policy, the city entity argued that the insurance company should nevertheless be estopped from disclaiming coverage because it had waited until the end of fact discovery in the underlying action before issuing its disclaimer. The court rejected that argument, holding that because the city entity was not an additional insured, the insurance company was not required to disclaim coverage. (August 22, 2017)

In McBride v. New York Property Insurance Underwriting Association, the New York Supreme Court, Appellate Division, 2d Department, in an action by a homeowner against its insurer for breach of the homeowner’s policy, considered, among other things, whether a cause of action for breach of the implied covenant of good faith and fair dealing, which alleged that the insurer failed to properly inspect and appraise the damage, was duplicative of the homeowner’s cause of action for breach of contract under the homeowner’s policy. The court held that the breach of the covenant of good faith and fair dealing was not duplicative of the breach of contract cause of action. (July 5, 2017)

In Garcia v. Government Employees Insurance Company, the New York Supreme Court, Appellate Division, 2nd Department, addressed the circumstances in which an insurance contract is divisible and/or separable, such that failure to pay a portion of or an additional premium results in the cancellation of only a portion of the insurance contract, versus the contract as a whole. The court found that an insurance contract is not divisible "when by its terms, nature, and purpose, it contemplates and intends that each and all of its parts and the consideration therefor shall be common each to the other and interdependent. On the other hand, the contract is considered severable and divisible when by its terms, nature, and purpose, it is susceptible of division and apportionment." (June 28, 2017)

In Lexington Insurance Company v. Allstate Insurance Company, the New York Supreme Court, Appellate Division, 2nd Department, addressed when a mortgage holder’s insurer may seek indemnification from a homeowner’s insurer. The policyholders’ mortgage holder allegedly improperly cancelled the homeowner’s insurance causing the mortgage holder’s insurer to be primarily liable. The court found that the mortgage holders’ insurer could recover under an equitable theory if it makes a prima facie case that the homeowner’s policy was improperly cancelled. (June 28, 2017)

In Mount Vernon Fire Insurance Company v. Visionaid, Inc., the Supreme Judicial Court of Massachusetts held that the duty to defend, under either contract or the common law, encompasses no duty either to prosecute an insured’s counterclaim or to fund the prosecution of an insured’s counterclaim. The court concluded that Massachusetts law does not require an insurer, with a duty to defend, to prosecute an affirmative counterclaim, either pursuant to the contractual language or the common-law “in for one, in for all” rule. The court also held that the insurer’s obligation to pay defense costs is co-extensive with the duty to defend. (June 22, 2017)

In Gil v. Clara Maass Medical Center, the Superior Court of New Jersey, Appellate Division, considered whether insurance policies covering a hospital extended to an allegedly negligent physician on the basis that he was the hospital’s “employee” or “leased worker” or because his limited liability company was affiliated or associated with the hospital. The court concluded that the policy language could not be plausibly interpreted to provide coverage to the physician or his limited liability company. (June 19, 2017)

In Satec, Inc. v. The Hanover Insurance Group, Inc., the Superior Court of New Jersey, Appellate Division, addressed the need for expert opinion in a broker liability action. The court held that the fiduciary relationship between the insurance broker and insured requires expert support. The court found that the insured’s expert proffered a conclusory “net opinion” because the expert could not identify the source of his espoused standard of care. (June 7, 2017)

In Haines v. Taft, the Superior Court of New Jersey, Appellate Division, addressed whether N.J.S.A. 39:6A-12 precludes an insured from recovering medical expenses from a tortfeasor above those collectible or paid under an insured’s PIP provision in a standard automobile insurance policy, including medical expenses exceeding any elected PIP option allowed in a such a policy pursuant to N.J.S.A. 39:6A-4.3(e). The court held that these damages are recoverable and could be sought from a tortfeasor. (June 1, 2017)

In Leggette v. Government Employees Insurance Company, the Superior Court of New Jersey, Appellate Division, addressed New Jersey’s “Deemer Statute,” which requires an insurer authorized to do business in New Jersey to provide PIP coverage for out-of-state policies whenever the insured automobile is “used or operated” in the state. The court held that PIP coverage under the Deemer Statute was not triggered where an out-of-state pedestrian was not using or operating her motor vehicle in the state at the time of the accident. (May 30, 2017)

In Schultz v. Tilley, the Appeals Court of Massachusetts held that questions on a homeowner's insurance policy application regarding the “breed and bite history” of an animal kept on premises, and prior “losses,” were ambiguous and therefore, the homeowner’s responses, which failed to reveal prior bites to other dogs and a prior payment of a veterinary bill for an injured dog, but which were based on the homeowner’s reasonable interpretation of those questions, did not constitute material misrepresentations warranting rescission of the policy. (May 18, 2017)

In Fiduciary Insurance Company of America v. Medical Diagnostic Services, P.C., the New York Supreme Court, Appellate Division, 1st Department, examined when an insured may recover attorneys’ fees from an insurer. The general rule is that an insured may recover attorneys’ fees if the insurer successfully defends against an insurer’s declaratory judgment action seeking a judgment that the insurer has no duty to defend or indemnify its insured. That rule was not implicated here because the insured’s assignee, a chiropractic practice, was seeking reimbursement for chiropractic services rendered to the insured in a no-fault action. Such a claim did not concern a right to defense or indemnity from the insured. (May 16, 2017)

In Almonte v. Citibank NMTC Corporation, the New York Supreme Court, Appellate Division, 1st Department, addressed whether a janitorial services company breached a contract to procure insurance when it obtained an insurance policy with a self-insured retention. The court held that the contract was ambiguous as to whether a self-insured retention was a permissible form of insurance coverage where the contract provided, in part, that “any self-insured coverage shall be deemed insurance coverage hereunder.” The court also held that there was an issue of fact as to whether any objection to the self-insured retention was waived given that the certificate of liability insurance evinced the self-insured retention and there was no previous objection to it. (May 9, 2017)

In Lazar Glanz v. New York Marine and General Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed the circumstances under which an insured may use Insurance Law § 3420 to recover the amount of an unsatisfied judgment from defendant’s insured. The court found that Insurance Law § 3420(a)(3) requires the injured party to demonstrate that he or she acted diligently in attempting to ascertain the identity of the insurer, and thereafter expeditiously notified the insurer. In this case, the court found that the plaintiff did not notify the insurer until after the insured did so, meaning he had failed to act diligently in attempting to ascertain the insurer’s identity and expeditiously notify it of his claim. (May 3, 2017)

In Windows v. Erie Insurance Exchange, the Superior Court of Pennsylvania considered whether the undefined term “backs up” found in a water-damage exclusion was ambiguous. The court found that the term was ambiguous as a “back up” could occur when any water or sewage enters the premises through a sewer line or drain pipe, no matter where it originated, or when water or sewage “backs up” through drains from where it originally drained out of the house. (May 1, 2017)

In Landsman Development Corporation & RLI Insurance Company v. Technology Insurance Company, the New York Supreme Court, Appellate Division, 4th Department, addressed whether a general contractor was properly identified as an additional insured under its subcontractor’s policy. The policy had an additional insured endorsement, which provided that an insured shall include as an additional insured the persons or organizations shown in the schedule. The schedule stated: “[b]lanket as required by written contract.” The court found that because there was no written contact between the general contractor and its subcontractor at the time of the underlying accident, the general contractor did not qualify as an additional insured. (April 28, 2017)

In The Hanover Insurance Group, Inc. v. Raw Seafoods, Inc., the Appeals Court of Massachusetts addressed whether an unknown cause of damage to products at a processing facility constituted an “occurrence” within the meaning of a commercial general liability (CGL) policy. Concluding that the damage constituted an “occurrence,” the court explained that the defendant had been found negligent on a res ipsa theory in the underlying litigation. Thus, the insurer was bound by this judgment and negligence is akin to an accident such that the damage constituted an “occurrence.” (April 26, 2017)

In Silva v. Norfolk & Dedham Mutual Fire Insurance Company, the Appeals Court of Massachusetts addressed whether an insurer’s postjudgment offer to settle the matter for the policy limits, exclusive of postjudgment interest, is a violation of Massachusetts law. Concluding it is not, the court explained that such an offer was proper, but if the personal injury victim had declined the offer, the insurer’s obligation to pay postjudgment interest on the entire judgment would continue. (April 26, 2017)

In General Refractories Company v. First State Insurance Company, the United States Court of Appeals for the Third Circuit considered whether a policy exclusion that disclaims losses “arising out of asbestos” will prevent a manufacturer from obtaining indemnification for negotiated settlements with plaintiffs who have suffered adverse health effects from exposure to asbestos. The court held that the phrase “arising out of,” when used in a Pennsylvania insurance exclusion, unambiguously requires “but for” causation. Because the losses related to the underlying asbestos suits would not have occurred but for asbestos, the manufacturer was not entitled to indemnification. (April 24, 2017)

In Pennsylvania Manufacturers’ Association Insurance Company v. Johnson Matthey, Inc., the Commonwealth Court of Pennsylvania considered whether, as a matter of law, liability insurance coverage for environmental property damage claims is triggered only at the time the property damage is first manifested. The court reasoned that limiting coverage for environmental contamination claims to policies in effect at the time that contamination is first detected would present the problematic scenario of permitting insurers to limit or terminate coverage, in anticipation of future claims that have not yet materialized but can be predicted with near certainty. Accordingly, the court held that a liability policy can be triggered after the coverage period ends if undetected environmental contamination occurred during the policy period. (April 24, 2017)

In Caira v. Zurich American Insurance Company, the Appeals Court of Massachusetts considered whether an insurer committed an unfair claim settlement practice when it conditioned the payment of its primary policy limit on a release of all claims against its insureds, despite the availability of excess insurance. The court found that the insurer acted reasonably in insisting on a release, because “to pay without a release is not a settlement.” The availability of excess insurance “was not material” to the insurer’s settlement position. (April 21, 2017)

In Thompson v. Board of Trustees, Teachers’ Pension and Annuity Fund, the Superior Court of New Jersey, Appellate Division, addressed the burden of proof for accidental disability benefits for mental disability arising from incidents involving mental and physical stressors where physical injury was temporary or minor. The court held that the disability must result from direct personal experience of a terrifying or horror-inducing event that involves actual or threatened death or serious injury or a similarly serious threat to the physical integrity of the member or another person. (April 11, 2017)

In Pergolese v. The Standard Fire Insurance Company, the Superior Court of Pennsylvania addressed whether the addition of a new vehicle to an existing multi-vehicle policy required the insured to execute a new statutorily mandated waiver of stacked coverage. The court held that the newly purchased car was not insured under the after-acquired vehicle provision, which merely extends existing coverage until the insured notifies the insurer that he wishes to add the new car to the existing policy. Here, the insured actually added the newly purchased car to his policy; thereby, requiring the insured to execute a new waiver form to relinquish stacked coverage. (April 11, 2017)

In Liberty Mutual Fire Insurance Company v. Casey, the Appeals Court of Massachusetts determined whether bodily injuries were covered under a homeowners policy when the injuries were the result of an assault perpetrated by the insured while under the influence of alcohol and marijuana. The court concluded that the insured had the capacity to form the intent to harm where he admitted that he intended the act and “that his anger at [the victim] was part of his reason for doing so.” (March 29, 2017)

In Doe v. Standard Insurance Company, the United States Court of Appeals for the First Circuit addressed the year of disability onset in determining long-term disability payments under ERISA. The court held that where an insurer charges an additional premium for “Own Occupation” insurance, the assessment of an environmental lawyer’s disability turns on when she is unable to perform the material duties in her specialized area of legal practice. Here, the insurance carrier’s reliance on a generic “lawyer” description rather than environmental lawyer job description was arbitrary and capricious. (March 24, 2017)

In Green v. Pennsylvania Property and Casualty Insurance Guaranty Association, the Superior Court of Pennsylvania considered whether, under the Pennsylvania Property and Casualty Insurance Claim Act (the Act), a pre-insolvency denial of coverage defeats the existence of a covered claim against Pennsylvania Property and Casualty Insurance Guaranty Association, where insolvency prematurely terminates coverage litigation against a defunct insurer. The court held that a denial of coverage, in the absence of judicial confirmation, does not defeat all pretense to a covered claim under the Act. (March 21, 2017)

In Harco Construction, LLC v. First Mercury Insurance Company, the Supreme Court of New York, Appellate Division, 1st Department, addressed the scope of an insurer’s duty to disclaim coverage to a company who requested additional insured coverage under the policy. The court held that the insurer demonstrated, prima facie, that the company did not qualify as an additional insured under the policy. As such, the court held that the insurer was not required to disclaim coverage, as the denial of coverage was based on lack of coverage rather than on a policy exclusion. (March 15, 2017)

In Ramirez v. Commerce Insurance Company, the Appeals Court of Massachusetts addressed whether an insurer, under the standard Massachusetts automobile insurance policy, must pay as damages both the actual cash value of a replacement vehicle and the applicable sales tax, even when the insured has not purchased a replacement vehicle and incurred a sales tax. The court held that the insurer was not obligated to pay the sales tax, as the insurer is only required to place the insured in as good of a position as he was in at the time of his loss. (March 7, 2017)

In Estate of Gen Yee Chu v. Otsego Mutual Fire Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether insured homeowners made a material misrepresentation of fact by stating on their insurance application that their house was a two-family dwelling when the house contained three separate dwelling units. In concluding that the insureds made a material misrepresentation on their insurance application, the court held that the insurer established that it would not have insured the premises if it had been aware that it was a three-family dwelling. Although the insureds testified that they believed the house was a legal two-family dwelling, the court explained that an insurer may rescind a policy if the insured made a material misrepresentation of fact even if the misrepresentation was innocently or unintentionally made. (March 1, 2017)

In Ford v. American States Insurance Company, the Supreme Court of Pennsylvania, Western District, addressed whether an insurer’s underinsured motorist coverage form complies with the Motor Vehicle Financial Responsibility Law if the insurer’s form is not a verbatim reproduction of the statutory rejection form. The court held an insurer’s form complies even if the form contains de minimis deviations from the statutory form. (February 22, 2017)

In Matter of Government Employees Insurance Company v. Fletcher, the New York Supreme Court, Appellate Division, 2d Department, held that an insurer could not disclaim coverage on the ground of lack of cooperation where the insurer failed to demonstrate that the conduct of the insured constituted “willful and avowed obstruction.” The court found that the insurer’s diligent efforts to obtain the insured’s cooperation and mere inaction on the part of the insured, without more, are insufficient to establish non-cooperation. (February 15, 2017)

In Anderson v. National Union Fire Insurance, the Supreme Judicial Court of Massachusetts addressed the proper measure of punitive damages for unfair and deceptive insurance settlement practices in violation of Mass. Gen. Laws c. 93A, § 9(3) and c. 176D, § 3. The Court held that post-judgment interest cannot be included in the calculation of the underlying judgment for the purpose of multiplication of damages under c. 93A, § 9(3). The court reasoned that post-judgment interest is not an element of compensatory damages. Rather, it provides compensation for a delay in payment, and thus is separate and distinct from the underlying judgment. (February 2, 2017)

In Givaudan Fragrances Corporation v. Aetna Casualty & Surety Company, the Supreme Court of New Jersey considered whether an anti-assignment clause in an insurance policy could bar the assignment of a post-loss claim where the claim had not been reduced to a money judgment. The Court determined that once an insured loss occurs, an anti-assignment clause in an occurrence policy cannot provide a basis for an insurer to decline coverage based on the insured’s assignment of the right to invoke insurance coverage for that loss. Accordingly, the court held that the anti-assignment provisions in the insurance policy did not apply, and assignment was not barred. (February 1, 2017)

In Concordia General Contracting Company, Inc. v. Preferred Mutual Insurance Company, the New York Supreme Court, Appellate Division, 2nd Department, addressed whether an insurance company must defend and indemnify a contractor in an underlying personal injury action brought by a subcontractor. The court found that the underlying construction contract was not an “insured contract” as defined in the policy because such definition specifically stated coverage only extended to third parties and the injured party was himself a party to the contract. (January 25, 2017)

In Morgan v. Massachusetts Homeland Insurance Company, the Appeals Court of Massachusetts addressed whether an insurer committed unfair or deceptive claim settlement practices in violation of G. L. c. 176D, 3(9) and G. L. c. 93A in settling an auto insurance claim. The court held that the insurer did not engage in any unfair or deceptive practices, as it considered the retail book value of the vehicle and offered a settlement value to the insured, which was accepted. (January 20, 2017)

In Tower Insurance Company of New York v. Zaroom, the New York Supreme Court, Appellate Division, 1st Department, found that an insurance company had no duty to defend or indemnify homeowners in a personal injury action because they did not reside at the insured premises as required for coverage. The court found that the term, “reside,” in the insurance policy was not ambiguous. (December 15, 2016)

In Petty v. Federated Mutual Insurance Company, the Superior Court of Pennsylvania addressed whether a UIM waiver form signed by the named insured complied with the statutory requirements for waivers. The court found that the body of the form was identical to the statutory language and minor changes to the heading and format did not remove the form from compliance. (December 14, 2016)

In J. Lawrence Construction Corporation v. Republic Franklin Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, considered whether an insurance company was obligated to provide supplementary uninsured/underinsured motorist benefits to the driver of an insured vehicle who was struckwhile walking to the vehicle with the intent to enter it. The court declared that the insurer had no duty to provide coverage because the policy covered only a person “occupying” the insured vehicle, and the driver was not adequately connected to the vehicle to qualify as an occupant at the time of the accident. (December 14, 2016)

In Zurich American Insurance Company v. Endurance American Specialty Insurance Company, the New York Supreme Court, Appellate Division, 1st Department,addressed the circumstances sufficient to cause a third party to become an additional insured. The insurance policy issued by Endurance stated that, “The following are included as additional insureds: Any entity required by written contract.” Endurance refused to extend coverage to Zurich on the basis that the agreement between Zurich and the insurance holder was never signed. The court found that because Endurance’s policy required only a written contract, and the written contract between Zurich and the insurance holder contained no signature lines and stated that acceptance of the order constituted agreement to be bound by the terms, that Zurich was in fact an additional insured and no signed writing was necessary. (December 8, 2016)

In Sanders v. The Phoenix Insurance Company, the First Circuit Court of Appeals held that a homeowner’s insurer’s duty to defend was not triggered by either a pre-suit demand letter sent to the insured pursuant to the Massachusetts Consumer Protection Act, c. 93A, or by a pre-suit mediation between the insured and the claimant, at which the insured settled with the claimant and assigned its claims against the insurer. In doing so, the court distinguished the c. 93A demand letter from a CERCLA letter which would trigger the duty to defend, because failing to respond to the CERCLA letter would substantially compromise the insured’s position. The court also held that there was no duty to indemnify the insured. The policy provided that no action with respect to the insured’s personal liability coverage could be brought against the insurer until the obligation of the insured had been determined by a final judgment or an agreement signed by the insurer. The court held that because the insured had settled with the claimant in the insurer’s absence, there was no action against the insurer for indemnification under the terms of the policy. Finally, the court held that the insurer could not be liable for unfair or deceptive trade practices in insurance pursuant to c. 176D, because there was no predicate duty to defend or indemnify the insured, and because liability was not reasonably clear. (December 7, 2016)

In Joseph v. Interboro Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, held that the insurer properly rescinded the policy by showing that the insured made a material misrepresentation when she secured the policy, which induced the insurer to issue a policy it otherwise would not have. In order to establish materiality as a matter of law, “the insurer must present documentation concerning its underwriting practices that show that it would not have issued the policy if the correct information had been disclosed.” (November 30, 2016)

In Rass Corporation v. The Travelers Companies, Inc., the Appeals Court of Massachusetts held that an insurer had violated the Massachusetts Consumer Protection Act, M.G.L. c. 93A,as well as the Massachusetts unfair claims settlement practices statute, M.G.L. c. 176D. There, the insurer agreed to defend the insured in the underlying action under a reservation of rights, and unilaterally imposed a decrease in the insured’s defense counsel’s hourly rate from $275 to $200. Prior to trial, the defense counsel reached a settlement with the plaintiff for $175,000, which was reasonable in light of the insured’s potential exposure. The $175,000 would resolve both a covered claim as well as an uncovered claim. The insurer had previously acknowledged its obligation to indemnify the insured on the covered claim, and the court held that the insurer was aware of the strength of the covered claim against the insured and the potentially high exposure faced by the insured on that claim. The insurer offered to contribute $10,000 to $20,000 toward the settlement, but only on the condition that the insured waive its right to dispute the insurer’s refusal to pay the defense counsel’s full hourly rate. The insured rejected the insurer’s offer, and settled without contribution from the insurer. The court held that the insurer’s offer of contribution, which was far below the likely exposure, and the condition placed on it, constituted a failure to effectuate a fair and equitable settlement of claims in which liability had become reasonably clear, in violation of c. 176D. The court also held that the insurer violated a separate provision of c. 176D because, by surrendering control of the defense to the insured under a reservation of rights, and at the same time refusing to pay the defense counsel’s reasonable hourly rate, the insurer had unfairly compelled the insured to seek the unpaid fees through litigation. (November 10, 2016)

In Ensey v. Government Employers Insurance Company, the United States Court of Appeals for the Third Circuit determined whether an insurance company violated New Jersey’s Consumer Fraud Act (CFA) when during a mid-term policy change it did not advise its insured of an option to increase UM/UIM coverage limits, send a buyer’s guide and coverage selection form after increasing bodily injury limits (BIL) coverage limits, and allowed an unlicensed agent to increase the BIL limits. The court found no violation of any affirmative statutory duties under the CFA, which also precluded recovery under New Jersey’s Truth in Consumer Contract, Warranty and Notice Act. Further, the court found no evidence of any mutual mistake required to receive a reformation remedy. 

In Tudor Insurance Company v. Narayan Sundaresen, the Supreme Court, Appellate Division, First Department, addressed whether a “Contractor or Subcontractor Limitation” endorsement in a general liability insurance policy barred coverage for an underlying personal injury action. The Court held that the exclusion was triggered because the evidence demonstrated that the injured worker who brought the underlying action was hired either by the insureds (who were also owners of the premises) or the general contractor, and that the injured worker was therefore a “contractor or subcontractor of the insured” for purposes of the exclusion. The Court therefore held that the insurance company had no duty to defend or indemnify the insured. (October 27, 2016)

In Seneca Specialty Insurance Company v. T.B.D. Capital, LLC, the Supreme Court, Appellate Division, Second Department, addressed whether an action to declare an insurance policy rescinded and void was subject to dismissal under CPLR 3211(a)(4) on the basis that the policyholder had already commenced an action in Indiana against the insurer. The Court upheld the dismissal under CPLR 3211(a)(4) based on substantial identity of the parties and the causes of action alleged in the Indiana and New York actions and because the Indiana action was filed “first-in-time.” (October 26, 2016)

In Southwest Marine & General Insurance v. Preferred Construction Insurance, the New York State Supreme Court, Appellate Division, 1st Department, held that there were unresolved issues of fact surrounding coverage because, although the additional insured endorsement did not reference the additional insured, the insurer issued a certificate of insurance that did identify the additional insured. The Court held that, where the policy leads to two conflicting interpretations, “the parties may submit extrinsic evidence as an aid in construction.” (October 20, 2016)

In Parthasarathy v. Commonwealth of Pennsylvania, Department of Transportation, the Commonwealth Court of Pennsylvania considered whether a 41-day lapse in vehicle insurance coverage was de minimis such that the vehicle owner was in “substantial compliance” with the Vehicle Code 75 Pa. C.S. §1786(d). Pursuant to the Code, generally, a vehicle registration shall be suspended for three months if appropriate vehicle insurance is not secured. However, §1786(d)(2)(i) provides an exception if the lapse in insurance coverage was for a period of less than 31 days and the owner did not operate the vehicle during that time. The court determined that because the lapse in the owner’s vehicle insurance policy was for a period of 41 days, the owner did not satisfy the exception at §1786(d)(2)(i), and held that the owner had violated the Vehicle Code. (September 29, 2016)

In Gilbane Building Company v. St. Paul Fire & Marine Insurance Company, the New York State Supreme Court, Appellate Division, 1^st Department, held that the endorsement, “Additional Insured-By Written Contract,” unambiguously required that the named insured execute a written contract with the party seeking coverage as an additional insured. Even though the named insured entered into a construction contract which required it to add a third- party construction manager as an additional insured, the court ruled that, because there was no written agreement between the named insured and the construction manager, the policy did not provide coverage to the construction manager as an additional insured. (September 15, 2016)

In In Re Viking Pump, Inc., the Supreme Court of Delaware addressed a challenge by excess insurers to assignments of excess policies to the insured successors without the excess insurers’ consent. The court held that under New York law a no-transfer provision is valid only with respect to transfers made prior to loss. The court noted that the precise amount of liability need not be identifiable at the time of assignment to give rise to the excess insurers’ obligation to insure the risks for which they contracted. (September 12, 2016)

In Auto-Owners Insurance Company v. Stevens & Ricci Inc., the United States Court of Appeals for the Third Circuit considered whether an insurance carrier had a duty to indemnify its insured for amounts paid to settle an underlying class action alleging violations of the Telephone Consumer Protection Act of 1991 (TCPA) for sending unsolicited faxes. The court held that the carrier did not have a duty to indemnify because the alleged damages were not fortuitous and therefore did not constitute property damage. Further, the claimed privacy intrusion did not result from the content of the faxes and therefore was not advertising injury. (September 1, 2016)

In OneBeacon America Insurance Company v. Narragansett Electric Company, the Appeals Court of Massachusetts addressed which jurisdiction’s law should apply in a coverage dispute between a Rhode Island public utility and its insurers for environmental contamination at several Rhode Island sites. Despite the environmental damage that occurred solely in Rhode Island and the interests of Rhode Island ratepayers of the public utility in having their Rhode Island law applied, the court concluded that Massachusetts law applied. In making this determination, the court relied on the Massachusetts connection to the insurance contracts as a whole and the circumstances connected to their issuance. (August 31, 2016)

In McLaughlin v. American States Insurance Company, the Appeals Court of Massachusetts addressed whether an insurer was liable for unfair insurance settlement practices by failing to conduct a thorough investigation of the damage to a homeowner’s irrigation system caused by its insured. The court held that the insurer failed to conduct a reasonable investigation of the claim and failed to make a reasonable offer of settlement even after liability of its insured became reasonably clear. (August 12, 2016)

In Bowerman v. National Life Insurance Company, the United States Court of Appeals for the Third Circuit addressed an insured’s entitlement to continuing residual disability benefits after his 55th birthday. In finding that the insured was no longer entitled to benefits, the court found that the policy unambiguously provided a definition of “occupation” that used one standard (“occupation of the Insured at the time such disability begins”) in the period of continuous disability up to the first ten years or age 55 whichever is later, and a second standard to define the term after that (“any occupation for which the Insured is or becomes reasonably fitted by education, training or experience.”). (July 7, 2016)

In Rego Park Holdings, LLC v. Aspen Specialty Insurance Company, the New York Supreme Court, Appellate Division, 2nd Department, held that an insurer seeking to rely on a policy exclusion “bears the burden of establishing that the exclusion is stated in clear and unmistakable language,” is “subject to no other reasonable interpretation,” and “applies in the particular case.” Here, the court held that because the policy clearly stated that it did not insure for any damage to the adjoining properties and the language was not susceptible to any other reasonable interpretation, the insurer was not required to defend or indemnify the insured in an underlying action for damages to the adjoining properties. (June 29, 2016)

In Narragansett Electric Company v. Century Indemnity Company, the United States Court of Appeals for the Second Circuit held that an insurance company did not breach its duty to defend its insured in connection with a cost-recovery action because the policy’s pollution exclusion barred coverage. The court concluded that the insured’s complaint could not reasonably be read to allege a sudden and accidental release that caused the contamination at the site, and therefore, fell within the pollution exclusion. (June 23, 2016)

In Winbrook Communication Services, Inc. v. United States Liability Insurance Company, the Appeals Court of Massachusetts held that because the insurer had violated its duty to defend, it was bound by the facts as established by default judgment against the insured on a claim of negligent misrepresentation. The court also interpreted the “personal profit” exclusion in a directors and officer’s policy, which excluded coverage for loss arising out of the insured “gaining in fact any profit, benefit, remuneration or advantage to which such Insured was not legally entitled,” and held that an opportunity may constitute an advantage sufficient to trigger the exclusion. (June 14, 2016)

In Enrique v. State Farm Mutual Automobile Insurance Company, the Supreme Court of Delaware addressed whether an insurer’s failure to offer policy limits or seek remittitur after a verdict in excess of the limits creates a presumption of bad faith. The court held that such a presumption would ignore the reality of valuing personal injury claims and that the presumption does not exist. (June 14, 2016)

In Aetna Health Plans v. Hanover Insurance Company, the New York Court of Appeals addressed whether a health insurer who pays for medical treatment that should have been covered by the insured’s no-fault automobile insurance carrier, may maintain a reimbursement claim against the no-fault insurer within the framework of the Comprehensive Motor Vehicle Reparations Act. The court held that because the No-Fault Law does not contemplate such reimbursement to a health insurer, as opposed to a health care provider, a health insurer may not maintain a reimbursement claim. (June 14, 2016)

In Fay Da Realty Corporation v. Peerless Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether an insurer breached an insurance contract when it denied the insured coverage in an underlying personal injury action based on the insured’s late notice of claim. The court held that in order to deny coverage based on a late notice of claim, the insurer must first show that the insured failed to give notice as required by the insurance policy. The court held that the insurer failed to make this threshold showing as the complaint alleged that the insured had no knowledge of the underlying personal injury action until after a default judgment was entered, the insured notified the insurer of the default judgment three days later, the insurer did not produce a copy of the subject insurance policy, and made no attempt to show that the insured’s conduct was in breach of the notice requirements of the policy. (June 15, 2016)

In Mt. Vernon Fire Insurance Company v. Visionaid, Inc., the United States Court of Appeals for the First Circuit addressed whether an insurer may be required, as part of its defense of a claim against its insured, to provide and pay for counsel to prosecute its insured’s counterclaim against the claimant. The court decided to certify questions to the Supreme Court of Massachusetts regarding whether an insurer may owe a duty to its insured to prosecute the insured’s counterclaims, whether an insurer has a duty to fund the prosecution of such counterclaims, and if such a duty exists, under what circumstances could a conflict of interest arise. (June 9, 2016)

In Drydren Mutual Insurance Company v. Goessl, the New York Court of Appeals addressed New York’s highest court’s role in reviewing findings of fact. The issue before the court was which of two insurance policies should have provided coverage for an underlying tort action. The Appellate Division and Law Division reached opposite conclusions based on their own findings of fact. The court upheld the Appellate Division’s factual findings, holding that they more nearly comported with the weight of the evidence. (June 7, 2016)

In Axis Surplus Insurance Company. v. GTJ Company, Inc., the New York Supreme Court, Appellate Division, 1st Department addressed whether an insurer was obligated to continue defending an underlying claim when facts that have not yet been presented to the Supreme Court through summary judgment motion practice suggest that there was no covered occurrence. The court held that the insurer was obligated to maintain the status quo and continue providing an underlying defense because the allegations in the four corners of the underlying complaint fell squarely within the insurer’s obligation to defend, which is broader than the duty to indemnify. (May 26, 2016)

In State Farm Mutual Automobile Insurance Company v. Buckley, the Supreme Court of Delaware held that the insurance company covering a school bus must provide Personal Injury Protection (PIP) benefits to a minor passenger who was struck by another vehicle while crossing the street after receiving the signal to cross from the driver of the insured bus. The court found that the relationship between the proper operation of the school bus in picking up and discharging student passengers was clearly involved in the accident bringing it within the scope of Delaware’s PIP statute, which provides that PIP benefits are available to any person injured in an accident involving a covered motor vehicle. (May 19, 2016)

In Mt. Hawley Insurance Company v. Seville Electronics Trading Corporation, the New York Supreme Court, Appellate Division, 2d Department, addressed whether, pursuant to New York’s direct action statute, an insurer was obligated to satisfy a judgment obtained against its insured in the underlying action. The court held that although the notice required from an injured party “is measured less rigidly than that required of an insured,” the injured party failed to show that it acted “diligently in attempting to ascertain the [insurer’s] identity and in expeditiously notifying [the insurer].” (May 18, 2016)

In Century Surety Company v. Essington Auto Center, LLC, the Superior Court of Pennsylvania addressed whether an insured may make a binding judicial admission in its pleadings regarding the proper interpretation of a policy term. The court held that the interpretation of a contractual term is a legal conclusion and may not be established by judicial admission. (May 18, 2016)

In Viking Pump, Inc. v. TIG Insurance Company, the New York Court of Appeals held that in deciding whether excess insurers should pay based on “all sums” or “pro rata” allocations of loss, a court should look to the language of the contract. In interpreting the policies, which either contained a non-cumulation provision or a non-cumulation and prior insurance provision, the court held that the “all sums allocation is appropriate in policies containing such provisions.” Further, the court held that because the excess policies at issue “primarily hinge their attachment on the exhaustion of underlying policies that cover the same policy period as the overlying excess policy, and that are specifically identified by either name, policy number, or policy limit,” the excess policies are triggered by vertical exhaustion of the underlying available coverage within the same policy period. (May 3, 2016)

In Freeway Company LLC v. Technology Insurance Company, Inc., the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insurer had a duty to defend and indemnify Freeway Company, LLC in the underlying action. The record established that Freeway failed to keep itself informed of potential claims, and the court held that it failed to establish that its failure to give timely notice of the occurrence to Technology should be excused on the ground that it had a reasonable belief in non-liability. As the policy was issued before Insurance Law 3420 was amended to require prejudice, Technology had no duty to defend or indemnify Freeway. (April 28, 2016)

In Utica Mutual Insurance Company v. Herbert H. Landy Insurance Agency, the United States Court of Appeals for the First Circuit addressed whether a real estate insurance broker was entitled to a defense from its insurance carrier for errors and omissions in its provision of professional services. The court held that the carrier was obligated to defend its insured because the complaint alleged various activities that constituted a professional liability claim, and that the exclusion for “any type of unfair competition” did not apply, since the lawsuit did not allege any kind of consumer confusion. (April 19, 2016)

In Great American Insurance Company of New York v. L. Knife & Son, Inc.,the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insurance policy was void ab initio on the ground that the insured misrepresented the total insurable value (TIV) of the insured premises and its contents. The court noted that, although the insurer’s quotation for the policy contains the statement that it was basing the premium on the “$7 million TIV,” the insured’s broker did not provide any information on the insurance application regarding the TIV of the contents. The court further noted that the insurer’s own investigation of the property, which could have uncovered the TIV of the property and its contents, resulted in no underwriting activity, and other internal insurance company documents suggested that the decision to issue the policy and the premium charged were not connected to the TIV. The court, therefore, held that the insurance policy was not void ab initio because the insurer failed to establish as a matter of law that the insureds made any misrepresentation. (April 14, 2016)

In Capek v. Allstate Indemnity Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether a landlord's package insurance policy provided coverage for a fire that caused damage to the premises, where the policy excluded coverage for sudden and accidental direct physical loss caused by fire resulting from vandalism. The court held that the insurer established its entitlement to judgment as a matter of law because the subject policy expressly provided that it did not cover vandalism, which was defined in the policy as “willful or malicious conduct resulting in damage or destruction of property.” The court explained that because the evidence submitted by the insurer established that the fire at issue was intentional, the fire constituted “willful or malicious conduct resulting in damage or destruction of property” and was not covered by the subject policy. (April 6, 2016)

In The Provencal, LLC v. Tower Insurance Company of New York, the New York Supreme Court, Appellate Division, 2d Department, addressed whether a commercial property insurance policy provided coverage for the collapse of a retaining wall caused by heavy rains. The insurer disclaimed coverage for damage to the retaining wall pursuant to an exclusion concerning flood and surface water. The insured argued that because the insurer did not identify the exclusion in its letter disclaiming coverage, the insurer was precluded from relying on it. The court considered common-law waiver and estoppel principles and held that waiver did not apply because the failure to disclaim based on an exclusion will not give rise to coverage that does not exist. As for estoppel, the court held that because the insured failed to make the requisite showing of prejudice, there was no basis to estop the insurer from relying on policy exclusions not detailed in the letter disclaiming coverage. (April 6, 2016)

In Spoleta Construction, LLC v. Aspen Insurance UK Limited, the New York Court of Appeals addressed whether the initial letter forwarded by the additional insured to the insurer constituted a notice of occurrence under the insurance policy. The court held that the initial letter requested that the insurer be put on notice and provided details required by the insurance policy. The court rejected the insurer’s argument that it interpreted the initial letter as seeking only a defense and indemnity pursuant to the indemnification provision in a subcontract because the letter did not expressly state that the additional insured was seeking coverage. (March 24, 2016)

In Toner v. The Travelers Home and Marine Insurance Company, the Superior Court of Pennsylvania considered whether an insurance carrier was required to provide its insured with a waiver of stacking of uninsured/underinsured benefits form after she added new cars to her single vehicle policy. After finding that the statutorily created waiver forms were required for both single and multi-vehicle policies, the court determined that the carrier was not required to provide the insured a new waiver form after the addition of new vehicles to the policy. The court reasoned that the extension of coverage to additional vehicles under an after-acquired-vehicle provision in an existing single-vehicle policy did not represent the purchase of new insurance such that a new stacking waiver form was required. (March 21, 2016)

In City of New York v. National Catholic Risk Retention Group, Inc., the New York Supreme Court, Appellate Division, 1st Department, found that a plaintiff was an additional insured on an insurance policy in which the additional insured endorsement of the policy limited coverage for additional insureds to liability that arises out of the insured’s operations. The court held that because the underlying complaint alleges that the insured acted wrongfully and because the underlying claims against the plaintiff arise out of a decision made upon the recommendation of the insured, the plaintiff is entitled to a defense under the policy. (March 17, 2016)

In Kim v. Franco, the New York Supreme Court, Appellate Division, 2d Department, dismissed a complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law Section 5102(d) as a result of the subject accident. The court determined that the plaintiff failed to raise a triable issue of fact in response to the defendant’s submission of medical evidence establishing that the plaintiff’s alleged injuries did not constitute serious injuries under either the permanent consequential limitation of use or significant limitation of use categories of Insurance Law Section 5102(d). (March 16, 2016)

In Karl v. North Country Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, held that the insurer properly disclaimed coverage based upon the injured party’s failure to provide timely notice of the occurrence and of the commencement of the lawsuit. In this case, a restaurant patron sued the restaurant in February 2008 and was aware of the restaurant insurer’s identity, but did not notify the insurer until June 2008. The court held that the insurer properly disclaimed coverage based upon the patron’s failure to promptly forward a copy of the Summons and Complaint. (March 9, 2016)

In Connelly v. State Farm Mutual Automobile Insurance Company, the Supreme Court of Delaware addressed, as a matter of first impression, when a claim that an insurer acted in bad faith by failing to settle a third-party insurance claim accrues for purposes of the statute of limitations. The court held that such a claim accrues when an excess judgment against an insured becomes final and non-appealable, not when the insurer allegedly acts in bad faith. (March 4, 2016)

In ADB Net Corporation v. Columbian Mutual Life Insurance Company, the New York Supreme Court, Appellate Division, 1^st Department, discussed whether an attorney-in-fact has the right to sue for life insurance proceeds. ADB Net Corp. sued Columbian as attorney-in-fact for seven beneficiaries of Columbian’s life insurance proceeds. The court noted that life insurance proceeds are freely assignable in New York, and Columbian had been put on notice of the assignments. However, Columbian chose to disburse the assigned funds to the original beneficiaries rather than to the beneficiaries’ assignee. The court held that the attorney-in-fact claims should be dismissed, since an attorney-in-fact is essentially an alter ego and the beneficiaries had already been paid. (March 3, 2016)

In Aspen Insurance UK Limited v. Nieto, the New York Supreme Court, Appellate Division, 2d Department, discussed an insurer’s duty to defend and indemnify its insureds where it was alleged that notice was untimely. Aspen established its entitlement to judgment as a matter of law by demonstrating that the insureds were notified of the underlying claim approximately 17 months before they notified Aspen of the occurrence. Since the policies were issued in 2008, which was before the amendment to Insurance Law § 3420 which requires a showing of prejudice, Aspen did not have to show prejudice for the insured’s failure to provide timely notice. (March 2, 2016)

In National Union Fire Insurance Company of Pittsburgh, PA v. Compaction Systems Corporation of New Jersey, the New York Supreme Court, Appellate Division, 1^st Department, addressed whether a third-party claimant could pursue a claim for contribution against an insured’s successor-in-interest on the basis that the contribution claim was outside the scope of a prior settlement agreement between the insurer and the third-party claimant. The court held that under the plain language of the settlement agreement and release entered into between the insurer and the third-party claimant in the underlying coverage action, the claims released are those asserted against the third-party claimant for its own acts and liability as a landfill operator and transporter. Therefore, the court held that the third-party claimant is not precluded from asserting a third-party complaint against the successor-in-interest to the insured, for its proportionate share of liability, if any. (February 25, 2016)

In Ramara, Inc. v. Westfield Insurance Company, The United States Court of Appeals for the Third Circuit addressed whether an additional insured endorsement is triggered when the four corners of the complaint do not make allegations against the primary insured due to Worker’s Compensation Act immunity. Ramara, Inc., the owner of a parking garage, engaged Sentry to be its general contractor. Sentry, in turn, engaged Fortress as a subcontractor to install concrete at the garage. Fortress was issued a policy from Westfield Insurance Company and both Ramara and Sentry were named as additional insureds. An employee of Fortress was later injured on the job and brought suit against Ramara and Sentry, but did not include Fortress as the company with immunity under the Pennsylvania Workers Compensation Act. Since no “acts or omissions” on the part of Fortress were alleged in the four corners of the complaint, Westfield denied coverage. The Third Circuit determined that, through both a proximate cause theory and the “but for” test, it is clear to see that Fortress’, the primary insured, actions were at least potentially at fault in this case and that the potential that the claim falls within coverage triggers a duty to defend. Where the Workers’ Compensation Act is relevant to a coverage determination, insurers must interpret the allegations of the underlying complaint recognizing that the Act’s existence was taken into account when the complaint was drafted. (February 17, 2016)

In Vincel v. State Farm Fire and Casualty Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether a homeowners insurance policy provided coverage for a dog attack, where the insured was considered an out-of-possession owner of the premises, and at the time of the dog attack, the insured’s mother resided at the subject premises. Despite the insurer’s contention that the homeowners insurance policy required the insured to be a resident of the premises in order for her mother to be insured under the policy, the court noted that the terms “household” and “reside” were not defined in the subject policy, and under the circumstances, there were triable issues of fact as to whether the subject premises was the insured’s household and whether the insured resided at the premises within the meaning of the policy. (February 17, 2016)

In Freedom Medical Supply, Inc. v. State Farm and Casualty Company, the Supreme Court of Pennsylvania considered the meaning of the terms “usual and customary charge” in Section 1797(a) of the Motor Vehicle Financial Responsibility Law (MVFRL). The provision concerns the calculation of reimbursements for the provider of medical products to automobile accident victims from automobile insurers. The statute did not provide a definition for the terms, but a Pennsylvania Department of Insurance Regulation provided two bases insurers “may utilize” for calculating the reimbursement: the provider’s bill for services, or the data collected by the carrier. The Court held that the regulation, 31 Pa. Code 69.3, did not function as a limitation on insurers to merely those two bases, citing the “may utilize” language in the regulation as grounds for finding the regulation permits insurers discretion in using those bases among others in calculating reimbursements. (February 16, 2016)

In Westfield Insurance Company v. Astra Foods Inc., the Superior Court of Pennsylvania addressed (1) whether the judicially created borrowed employee doctrine was the same as a leased worker defined in an employer’s insurance policy; and (2) whether the inclusion of a leased worker under the insurance policy’s employer’s liability exclusion was against public policy. The court held a borrowed employee is distinct from a leased worker because the borrowed employee is a creature of case law and is more narrowly defined than a leased worker under the terms of the insurance policy. The court further held that the inclusion of a leased worker under the insurance policy’s employer’s liability exclusion was not against public policy because: (1) the insurer was not required to offer coverage to the insured for personal injury claims by workers not directly employed by the insured; (2) the insured did not purchase the policy principally to cover leased workers; and (3) the leased worker exclusion does not operate to foreclose the vast majority of the insured’s expected claims. (February 12, 2016)

In Templo Fuente De Vida Corporation v. National Union Fire Insurance Company, the Supreme Court of New Jersey considered whether an insurance company must establish prejudice before denying coverage based on the insured’s breach of the policy’s notice condition to provide notice “as soon as practicable” in a “claims made” policy. The court held that, because the policy was not a contract of adhesion but was agreed to by sophisticated parties, the insurance company was not required to show it suffered prejudice before disclaiming coverage. (February 11, 2016)

In Lexington Village Condominium v. Scottsdale Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, held that a party seeking the equitable relief of reformation may use “mutual mistake or fraud” as a basis. The party seeking reformation must “show in no uncertain terms, not only that mistake or fraud exists, but exactly what was really agreed upon between the parties.” Here, because the insurer did not provide sufficient evidence it would not have issued a policy that provided the coverage the insured was seeking if the insured had properly disclosed its loss history, age of buildings, and type of wiring installed, the insurer is not entitled to judgment as a matter of law. (February 3, 2016)

In DeMarco v. Stoddard, D.P.M., the Supreme Court of New Jersey considered whether the Rhode Island Medical Malpractice Joint Underwriting Association (RIJUA) was required to defend and indemnify a podiatrist in a medical malpractice action pending in New Jersey following rescission of the podiatrist’s malpractice liability policy. The court determined the RIJUA owed neither a duty to defend nor a duty to indemnify its insured, who had misrepresented the proportion of his practice generated in Rhode Island, which was a fact that formed the basis for his eligibility for insurance through the RIJUA. (December 1, 2015)

In Tower Insurance Company of New York v. Anderson, the New York Supreme Court, Appellate Division, 1^st Department, addressed the issue of the date an insurer first had “sufficient knowledge of potential material misrepresentations” by its insureds to rescind the policy. The insurer disclaimed coverage on March 5, 2012, but did not commence the declaratory action to rescind until June 4, 2012. The court held that as early as March 5, 2012, the insurer “suspected a material misrepresentation” yet it continued to accept Anderson’s premium payments and renewed the policy after that date. Therefore, the insurer was found to have waived its right to rescind the policy. (November 24, 2015)

In Burke v. Independence Blue Cross, the Superior Court of Pennsylvania addressed whether an insurer was required to provide insurance coverage for “in-school” applied behavioral analysis; notwithstanding, a place-of-service exclusion which specified that the insurer would not cover services provided in schools or other identified locations. The Court held that Pennsylvania law (40 P.S. § 764h) requires coverage of medically necessary treatment for autism spectrum disorders, including “in school” applied behavioral analysis, regardless of whether the policy excluded such coverage. (November 13, 2015)

In Bingham v. Supervalu, Inc., the United States Court of Appeals for the First Circuit addressed a dispute involving a company acting as insurer of one of its subsidiaries and whether that company’s delay in settling litigation with the estate of a woman injured by a shopping cart was actionable under Chapter 176D, a Massachusetts statute prohibiting those “in the business of insurance” from “unfair and deceptive practices” or “[f]ailing to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.” The court held that the company was not in the business of insurance because it did not sell insurance. The court further held that, although the company owned an insurance agency as a subsidiary, that insurance agency was wholly uninvolved in the litigation and its existence did not render the parent company “in the business of insurance.” (November 13, 2015)

In Harrell v. State Farm Insurance Company, the New York Supreme Court, Appellate Division, 3d Department, addressed whether an insurer had a duty to defend and indemnify its insureds under an automobile liability policy in an underlying personal injury action. The court held that, because the plaintiff-child primarily resided with and is related to the insured, there was no coverage for the plaintiff-child’s injuries as the automobile liability policy unambiguously excluded coverage for injuries suffered by the plaintiff-child. (November 12, 2015)

In H.P. Hood, LLC v. Allianz Global Risks US Insurance Company, the Appeals Court of Massachusetts considered whether loss of a bottled product due to a defective cap was covered under the “resulting loss” provision of an insurance policy. To fall within the “resulting loss” provision, the damage subject to the exclusion provision and the ensuing damage must be separable events differing in kind, not just degree. The court held the losses were not separable when the faulty design rendered the entire product defective. (November 2, 2015)

In Orient Overseas Associates v. XL Insurance America, Inc., the New York Supreme Court Appellate Division, 1st Department, addressed the sufficiency of a claim for legal fees in an insurance coverage dispute. In its original complaint, Orient Overseas had asserted a claim which sought the recovery of extra-contractual damages such as attorneys’ fees for the alleged bad faith of defendant, Westport. The lower court dismissed that cause of action and thereafter, Orient Overseas filed an amended complaint which again asserted bad faith claims against Westport. The court granted Westport’s motion for legal fees incurred in connection with its motion to dismiss the bad faith claim, finding that because the claim had been dismissed from Orient Overseas’ original complaint, it was frivolous to assert the same claim in the amended complaint. (October 27, 2015)

In Hanover Insurance Company v. Urban Outfitters, Inc., the United States Court of Appeals for the Third Circuit examined the scope of the "prior publication" exclusion of a commercial general liability contract, which bars coverage for a continuous string of injurious advertisements that are first published before the policy period begins. The court held that where infringing advertisements, with a common, clearly identifiable advertising objective, are published before and during the relevant policy period, the prior publication exclusion applies to excuse an insurer from its duty to defend where that insurer has assumed coverage responsibility after the insured has commenced the liability triggering conduct. (October 23, 2015)

In Stoms v. Federated Service Insurance Company, the Supreme Court of Delaware held that, under Delaware law, an employer has the right to purchase uninsured motorists (UM) coverage for some employees and reject it for others. The court also held that the insurance policy is not ambiguous for providing UM coverage for “directors” and “officers” on the basis that the terms “directors” and “officers” must be given their traditional corporate law meanings and could not reasonably be interpreted to include a finance manager. (October 20, 2015)

In Indian Harbor Insurance Company v. F&M Equipment, Ltd., the United States Court of Appeals for the Third Circuit interpreted the meaning of the word “renewal” with regard to an insurance contract. The court held that for a contract to be considered a renewal contract, it must contain the same, or nearly the same, terms as the original contract. (October 15, 2015)

In Nurse v. Omega U.S. Insurance, Inc., the Appeals Court of Massachusetts addressed whether a two-year limitations period set by statute (M. G. L. c. 175, § 99) for suits arising from certain insurance policies could be tolled by the discovery rule. Here, water damage from a broken pipe in early December was not discovered until late December, and suit was filed in late December two years later. The court determined that, as the discovery rule applied to statutes of limitation that begin to run when a cause of action accrues and this statute’s plain text required the action be “commenced within two years from the time the loss occurred,” the discovery rule did not toll the time for filing and the action was untimely. (October 5, 2015)

In Allstate Insurance Company v. Ramlall, the New York Supreme Court, Appellate Division, 2d Department, held that evidence submitted in support of a motion for summary judgment must be in admissible form. The court ruled that a copy of the insured’s unsworn MV-104 accident report constituted inadmissible hearsay and could not be considered on summary judgment. (October 7, 2015)

In State Farm Mutual Automobile Insurance Company v. Commonwealth of Pennsylvania, Insurance Department, the Commonwealth Court of Pennsylvania addressed whether an insurer may cancel an insured’s automobile insurance policy when an insured’s license is suspended for underage alcohol consumption. The court held that the insurer violated Act 31 of the Crimes Code, which prohibits an insurance company from cancelling an automobile insurance policy based on a license suspension for underage alcohol consumption. (September 24, 2015)

In Yar-Lo, Inc. v. Travelers Indemnity Company, the New York Supreme Court, Appellate Division, 3d Department, addressed the issue of when an insurance company must provide coverage to an insured for lost business income. After a sewage system malfunction, the insured suffered substantial damage to its premises and eventually terminated its lease and vacated the property. The court found that the insured failed to establish that terminating its lease was a direct result of the covered loss and found in favor of the insurance company. (July 30, 2015)

In Morley Maples, Inc. v. Dryden Mutual Insurance Company, the New York Supreme Court, Appellate Division, 3d Department, addressed the issue of an insured’s burden to overcome an arson defense on a motion for summary judgment. The court held that the insured had the burden to establish that the fire had not been intentionally set, instead of merely challenge the validity of the insurance company’s investigation. (July 30, 2015)

In Tower Insurance Company of New York v. Brown, the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insured was entitled to a defense and indemnity in an underlying personal injury action brought by a tenant of the insured’s premises. The court held that, because the insured failed to establish that he resided at the premises, as required by the policy, the insurance company properly denied coverage. (July 28, 2015)

In Kung v. Scottsdale Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether an insurance company was liable for an unsatisfied judgment individuals obtained against an insured construction company for the negligent and improper construction of the individuals’ home. The court held that the insurance company was not liable because it properly disclaimed coverage in the underlying action. (July 22, 2015)

In Babcock & Wilcox Company v. American Nuclear Insurers, the Supreme Court of Pennsylvania considered whether an insured forfeits insurance coverage by settling a tort claim without the consent of its insurer, when that insurer defends the insured subject to a reservation of rights. In a case of first impression, the court adopted a “fair and reasonable” standard, limited to cases where an insurer defends subject to the reservation of rights, breaches its duty to settle, and the policy is ultimately found to cover the relevant claims. The court held that if the settlement was fair and reasonable from the perspective of a reasonable prudent person in the same position of the insured and in light of the totality of the circumstances,” the insured may accept a settlement over the insurer’s refusal. (July 21, 2015)

In Arrowpoint Capital Corporation v. Arrowpoint Asset Management, LLC, the United States Court of Appeals for the Third Circuit concluded that the trial court’s denial of a preliminary injunction in a trademark infringement case was based upon an improper interpretation of what kind of confusion is actionable under the Lanham Act. The court ruled that when interpreting what constitutes confusion, a broad interpretation should be used, and the analysis should not be limited to determining only if there was confusion among an actual customer. (July 16, 2015)

In Allstate New Jersey Insurance Company v. Lajara, the Supreme Court of New Jersey held that a civil defendant sued by an insurance company for violating the Insurance Fraud Prevention Act has a right to a jury trial. In seeking to recover money paid to defendant for fraudulently obtaining personal injury protection benefits, the insurance carriers sought to proceed with a bench trial. In reversing the lower court’s decision, the court concluded that the monetary recovery sought by the plaintiff was a legal, not equitable, remedy and the New Jersey Constitution guaranteed the defendant the right to a trial by jury. (July 16, 2015)

In Estee Lauder Inc. v. OneBeacon Insurance Group, LLC, the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insurance company may raise a late notice defense after suit is filed against it. The court held that the insurance company “waived its right to assert the affirmative defense of late notice when it failed to raise that ground in its letter of disclaimer” to its insured. (July 9, 2015)

In Castlepoint Insurance Company v. Hilmand Realty, LLC, the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insurance company was barred by the doctrine of estoppel from denying coverage in an underlying personal injury action. The court held that the insurance company did not take inconsistent positions by hiring counsel to vacate a default against its insureds in the underlying action, “thereby allowing for a continued defense and preservation of the insureds’ rights,” and seeking a declaration that, in the event coverage was triggered, it “was vitiated by untimely notice of claim.” (July 9, 2015)

In Cypress Point Condominium Association, Inc. v. Adria Towers, LLC, the Superior Court of New Jersey, Appellate Division, considered whether consequential damages to the common areas of a condominium complex and the unit owners’ property, caused by the subcontractors’ defective work in a roof installation, constituted “property damage” and an “occurrence” under the relevant policy. The court held that the unintended and unexpected consequential damages caused by the subcontractors’ defective work constituted “property damage” and an “occurrence” under the policy. (July 9, 2015)

In Selective Way Insurance Co. v. Hospitality Group Services, Inc., the Superior Court of Pennsylvania addressed when the statute of limitations begins to run on a declaratory judgment action by an insurance company regarding its duty to defend and indemnify its insured in a third-party action. The court held that the statute of limitations begins to run when the insurance company has a sufficient factual basis to support its contentions in a declaratory judgment action that it has no duty to defend and indemnify the insured. The court explained that the insurance company could have sufficient information at the time it receives the complaint but may not until further developments in the third-party action. (July 7, 2015)

In Imperium Insurance Company v. Utica First Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether the insurer provided written notice of disclaimer of coverage in a reasonable time. The insurer delayed three days after completing its investigation before sending its notice of disclaimer. However, the insurer demonstrated that its delay was reasonably related to a prompt, diligent, and necessary investigation. As such, the court granted summary judgment to the insurer. (July 1, 2015)

In Universal American Corp. v. National Union Fire Insurance Company of Pittsburg, P.A., the New York Court of Appeals considered whether an insuring agreement for computer systems fraud that applies to “a fraudulent entry of Electronic Data or Computer Program” encompasses losses caused by an authorized user’s submission of fraudulent information into the insured’s computer system. The court found the insurance policy to be unambiguous and held that the reasonable expectation of the average insured upon reading the policy is that the policy applies to losses from fraudulent access, not to losses from the content submitted by authorized users. (June 25, 2015)

In Preferred Mutual Insurance Company v. Vermont Mutual Insurance Company, the Appeals Court of Massachusetts considered whether an insurer had a duty to defend under a homeowner’s insurance policy when the language of the complaint alleged the resident insured’s actions were made in the course of his employment. The court, by adopting the two-prong “continuity” and “profit motive” test, determined a duty to defend existed because the facts of the complaint did not establish the “business pursuits” exclusion applied to all potential liability. Additionally, the “other insurance” clause in the homeowner’s policy had no bearing on the insured’s duty to defend because it related solely to the insurer’s indemnity obligations. (June 17, 2015)

In Parler v. North Sea Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed the application of the assault and battery exclusion in a bar’s insurance policy. The court held that the claims asserted by the injured patron arose out of an assault, and therefore, fell within the exclusion of the policy. The fact that the bar stool made physical contact with the patron and not the intended target does not negate the fact that the act was done with the intent to commit an assault and battery, which is all that is required for the exclusion to apply. (June 17, 2015)

In Wolfe v. Allstate Property & Casualty Insurance Company, the United States Court of Appeals for the Third Circuit addressed whether an insurer has a duty to consider the potential for punitive damages when weighing its obligation to accept a settlement demand within the policy limits. The court held that the insurer had no duty to consider the potential for punitive damages, which was not a compensable item of damages, when it attempted to negotiate a settlement. Therefore, evidence of the underlying punitive damages award was not relevant in the bad faith case against the insurer. (June 15, 2015)

In Tower Insurance Company of New York v. Sanita Construction Company, Inc., the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insurer had a duty to defend and indemnify a judgment creditor which had “stepped into the shoes” of the insured. The judgment creditor argued that the insurer failed to advise its insured of the insured’s right to independent counsel in the underlying action. The court held that the right to independent counsel does not establish an affirmative duty on an insurer’s part to advise its insured of that right. The court held further that the attorney assigned by the insurance company did not breach a duty of care to the insured and that the judgment creditor forfeited any right to coverage based on its untimely notice. (June 4, 2015)

In OneBeacon America Insurance Company v. Narragansett Electric Company, the Appeals Court of Massachusetts addressed whether the Massachusetts statute of limitations had passed on claims relating to several insurers’ duty to indemnify an insured with respect to certain environmental pollution claims, a question which turned on a determination of when the insured’s claim for indemnity had first accrued. The court determined that the claim accrues when legal liability for damages was established. Here, that was when governmental agencies imposed mandatory requirements that the insured take action to clean up the site. (June 3, 2015)

In CIFG Assurance North America, Inc. v. Credit Suisse Securities, the New York Supreme Court, Appellate Division, 1st Department, addressed whether claims for fraud and violations of certain provisions of Insurance Law were time-barred. At issue was whether the alleged fraud was, or could have been, discovered more than two years before the complaint was filed. Evidence was presented that showed that there was notice of the alleged fraud five years prior to the date the complaint was filed. Such notice included public reports and actions filed against the same party containing similar allegations. Since there was knowledge of possible fraud, there was a duty to conduct an inquiry at the time the information was acquired. The failure to conduct such an inquiry resulted in the court imputing knowledge of fraud from the time the information was acquired, and determining that the claims were time-barred. (May 28, 2015)

In Cardigan Mount School v. New Hampshire Insurance Company, the United States Court of Appeals for the First Circuit addressed whether an action for declaratory judgment complied with pleading requirements when neither party could produce the insurance policy at issue. Although the alleged facts of the complaint, supported by secondary records and witness recollections, were clearly circumstantial, the court held a plausible basis existed for believing a policy had been issued, and permitted the case to continue. (May 27, 2015)

In Mutual Benefit Insurance Company v. Politsopoulos, the Supreme Court of Pennsylvania addressed the scope of an employer’s liability exclusion in an umbrella commercial liability insurance policy, particularly the policy’s separation-of-insureds clause. The court held that the employer's liability exclusion in a restaurant's umbrella commercial liability insurance policy is ambiguous and does not bar coverage for an injured restaurant employee's negligence suit against property owners named as additional insureds under the policy. (May 26, 2015)

In Mohney v. American General Life Insurance, the Superior Court of Pennsylvania addressed three primary issues related to a bad faith claim under a disability policy: (1) whether an expert’s finding that an insured “may” not have been totally disabled constituted a “reasonable basis” to deny total disability benefits; (2) whether insurance industry standards for the disability claims handling practices at issue were sufficiently complex to warrant expert testimony; (3) whether the insured’s conduct after receiving notice of termination of coverage was relevant to the issue of “bad faith.”

 The court held that:

• expert testimony that the insured might be capable of performing his job functions on a trial basis was insufficient evidence to conclude that he was no longer “totally disabled;”

• the claims handling standards at issue were sufficiently complex to warrant expert testimony from the insured’s “bad faith” expert; and

the trial court erred in considering the insured’s post-denial conduct in assessing his bad faith claim. (May 8, 2015)

In Wolfe v. Ross, the Superior Court of Pennsylvania addressed whether a motor vehicle exclusion in a homeowner’s policy operated to preclude recovery. Since the decedent’s use of the insured’s son’s dirt bike was both the proximate cause and cause in fact of the injury, the exclusion applied. The fact that the insured served alcohol to the minor does not change the fact that the policy language excludes coverage for injuries arising out of use of a motor vehicle. (May 7, 2015)

In Resolute Management Inc. v. Transatlantic Reinsurance Co. the Appeals Court of Massachusetts addressed whether a reinsurer could bring a claim for unfair and deceptive business practices pursuant to G. L. c. 93A, § 11. In order for a § 11 claim to be pursued, the center of gravity of the claim must be primarily or substantially located within the Commonwealth of Massachusetts, and it is a defendant’s burden to prove otherwise. The court thus held the §11 claim could proceed to discovery even though the reinsurer failed to plead facts sufficient to withstand a claim that the center of gravity was not within the Commonwealth of Massachusetts. (April 29, 2015)

In Rourke v. Pennsylvania National Mutual Casualty Insurance Co., the Commonwealth Court of Pennsylvania addressed underinsured motorist insurance coverage for a 19-year-old former foster child of an insured who continued to live with the insured. The court held that the individual’s age was not a factor in determining whether he was a “ward” of the insured under the policy, and because he met all of the other criteria for being covered under the policy, he was entitled to UIM benefits. (April 28, 2015)

In KelMar Designs, Inc. v. Harleysville Insurance Company of New York, the New York Supreme Court, Appellate Division, 1^st Department, addressed whether an insurer’s coverage would provide primary or excess coverage to plaintiff. The policy at issue provided excess coverage to plaintiff because it did not “specifically” require it to be primary. However, the court held that because the insurer’s policy and another policy obtained by plaintiff purported to be excess to the other, the excess provisions in the policies cancelled each other out and both insurers were co-insurers on a primary basis, and thus required to share plaintiff’s defense costs in the underlying action (April 30, 2015)

In An v. Victoria Fire & Casualty Co., the Superior Court of Pennsylvania addressed whether a clause in an automobile policy limiting liability coverage to only the named driver violates Section 1718(c) of the Pennsylvania Motor Financial Responsibility Law and public policy. The court held that Section 1718(c) does not apply to the “named driver only” insurance policy and that the insurance policy does not violate public policy because it provides a low-cost and affordable policy in return for limited coverage. (April 17, 2015)

In Lancer Indemnity Co. v. JKH Realty Group, LLC, the Supreme Court of New York, Appellate Division, 2d Department, found that a shopping plaza’s commercial general liability insurance policy provided coverage for a wrongful death action for the death of an employee at the shopping plaza. The court held that the shopping plaza demonstrated that a parking lot exclusion did not apply to the underlying claim because the decedent’s claim arose out of operations necessary or incidental to the building, and not out of the “ownership, maintenance or use” of the rear parking lot. (April 23, 2015)

In Erie Ins. Exchange v. Lobenthal, the Superior Court of Pennsylvania addressed whether an insurance carrier properly and timely notified an additional insured of its reservation of rights to disclaim liability.  The court held that the insurance carrier’s notice was not effective because the insurance carrier sent reservation of rights letters to the additional insured’s parents and attorney, but not the additional insured.  The court further held that the insurance carrier’s reservation of rights letter was untimely because it was sent approximately seven months after the complaint in the underlying case was filed. (April 15, 2015)

In Lee & Amtzis, LLP v. American Guarantee and Liability Insurance Company, the New York Supreme Court, Appellate Division, 1^st Department, addressed whether certain transactions fell within the “insured’s status” and “business enterprise” exclusions of coverage of a law firm’s professional liability policy. Generally, these exclusions apply where a lawyer is sued for malpractice and the claim also arises in whole or in part from the lawyer's status as the manager of a business enterprise in which the lawyer has a controlling interest. The Court held that the record established that the attorneys’ activities were of a hybrid nature and that the partners of the law firm were serving two masters, the client and the separate business venture. Therefore, the exclusions applied. (April 7, 2015)

In Granite State Insurance Company v. Clearwater Insurance Company, the United States Court of Appeals for the Second Circuit addressed whether a reinsurer may escape liability because of the insurer's alleged late notice, despite the fact that the reinsurer had shown no prejudice from the delay. In a summary order, a three-judge appellate panel, applying Illinois law, interpreted the state's law as not requiring prejudice as an element of a reinsurer's late notice defense. (April 2, 2015)

In Castlepoint Insurance Company v. Sewnarine Jaipersaud, the New York Supreme Court, Appellate Division, 1^st Department, addressed whether an insurer that issued a homeowner’s insurance policy had a duty to defend the insured in a personal injury action. The court held that the insurer had no duty to defend because the insurer demonstrated, through the insured's admission in a statement to an investigator and the investigator's inspection of the premises, that the insured’s home was not covered by the subject policy. (April 2, 2015)

In Chiulli v. Liberty Mutual Insurance, the Appeals Court of Massachusetts addressed whether an insurer, facing a bad faith claim over refusing to provide a reasonable settlement offer in a prior suit against its insured, could move to dismiss pursuant to the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute on the grounds that taking the prior case to trial on behalf of its insured is protected petitioning activity. The court concluded that the insurer was not entitled to the protections of the anti-SLAPP statute because such an application of the statute would eviscerate the Massachusetts consumer protection statutes. (April 2, 2015) 

In Matusevich v. Middlesex Mutual Assurance Company, the United States Court of Appeals for the First Circuit addressed whether damage to the lower level of an insured’s home should be excluded from coverage because the lower level was a “basement” under the Standard Flood Insurance Policy issued by the insurer and authorized by FEMA as part of the National Flood Insurance Program, which defined basement, in part, as subgrade on all sides. The lower level, clearly subgrade on three sides, was an inch subgrade of the concrete slab on the fourth side, but not subgrade to the ground underneath the slab.  The court concluded that the surface of the concrete slab was the proper measuring point, making the lower level a “basement” subgrade on four sides and, therefore, the damage to the lower level was excluded from coverage under the policy. (April 1, 2015)

In Dutkewych v. Standard Insurance Company, the United States Court of Appeals for the First Circuit addressed an insurer’s decision to limit an insured’s Long Term Disability Benefits under an ERISA plan to twenty-four months under the Mental Disorder Limitation where the insured had chronic Lyme disease. The court found that the insurer’s position, that the Mental Disorder Limitation applied because a mental disorder, regardless of cause, contributed to the disability, was a reasonable interpretation and its application to this insured’s case was supported by substantial evidence. (March 30, 2015)

In Torre v. Liberty Mutual, the United States Court of Appeals for the Third Circuit considered whether a Standard Flood Insurance Policy covered the cost of removing storm-generated debris not owned by the property owners from a portion of their land. The court found the cost of removing the debris was not covered by insurance because the policy term “insured property” applies to structures and items of property, but not land. (March 26, 2015)

In CorVel Corporation v. Homeland Insurance Company of New York and First Health Settlement Class v. Chartis Specialty Insurance Company, the Supreme Court of Delaware held that settlements in two class action lawsuits brought for violations of a Louisiana statute were not a “penalty” for purposes of an exclusion in the insureds’ errors and omissions insurance policies.  Deferring to the Louisiana court’s interpretation of its own statute, the court found that damages under the statute constituted “statutory damages,” not “penalties.” Therefore, the exclusion did not apply. (March 6, 2015) 

In Bayswater Development, LLC v. Admiral Insurance Company, the New York Supreme Court, Appellate Division, 1st Department, addressed whether an insurance company was obligated to defend and indemnify a developer in connection with claims arising out of damages suffered as a result of the use of Chinese Drywall.  The court held that the insurance company had no duty to defend and indemnify because Florida law controls and “[c]ourts in Florida have consistently held that pollution exclusions…[like those at issue in this case]…preclude coverage for damage caused by ‘Chinese Drywall’ claims.” (March 12, 2015)

In Cigna Corp. v. Executive Risk Indemnity, Inc., the Superior Court of Pennsylvania addressed the fraudulent acts exclusion under a fiduciary liability policy. The insured’s employees alleged that retirement plan amendments had the net effect of impermissibly reducing benefits in violation of ERISA. The court noted that it is against public policy to provide insurance coverage for intentional acts. The court held that insured’s conduct amounted to fraud, and that the fraudulent act exclusion operates as an exception to the more general wrongful acts coverage provision. (February 27, 2015)

In State Farm Indemnity Company v. National Liability & Fire Insurance Company, the Superior Court of New Jersey, Appellate Division, addressed whether an insurer seeking contribution from another insurer for Personal Injury Protection (PIP) benefits could compel arbitration of the contribution claim before a court had first determined whether the second insurer owed coverage.  The court held that under the governing statute the entire dispute, including the question of coverage, should be submitted to arbitration. (March 4, 2015)

In 128 Hester LLC v New York Marine & General Insurance Company, the New York Supreme Court, Appellate Division, 1^st Department, addressed the issue of rescission of insurance policies due to misrepresentations made by the insured in its application for insurance.  The court held that even if issues of fact exist as to whether the insured’s loss occurred during the policy period, the insurer was entitled to summary judgment and rescission of the policy because the insured made a material misrepresentation in its policy application (failed to provide a requested loss history).  The court also noted that even an innocent misrepresentation is sufficient to allow policy rescission. (March 5, 2015)

In American Int’l Specialty Lines Ins. Co. v. Kagor Realty Co., the New York Supreme Court, Appellate Division 1^st Department, addressed whether the insurer was estopped pursuant to Insurance Law 3420(d) from enforcing the policy’s “retroactive date.”  The court noted that the policy’s “retroactive date” was to provide coverage to claims made during the policy period that were based on events that took place after a particular date.  Because the record demonstrated that the lead paint pollution conditions that were alleged to have caused the incident commenced prior to the retroactive date, no coverage existed and the insurer could enforce the retroactive date. (February 26, 2015)

In Badiali v. New Jersey Manufacturer’s Insurance Group, the Supreme Court of New Jersey addressed an insurance company’s reliance on non-precedential case law as the basis for denial of uninsured motorist benefits to refute a bad faith claim.  The court held that the non-precedential case law provided the company “fairly debatable” reasons for its denial of coverage sufficient to overcome a claim of bad faith. (February 18, 2015)

In Wadeer v. New Jersey Manufacturers Insurance Co., the Supreme Court of New Jersey addressed the application of res judicata to an uninsured motorist insurance bad faith lawsuit where a bad faith claim had been raised and litigated, but not formally pled, in the underlying uninsured motorist suit.  The court held that the bad faith lawsuit was barred by res judicata because it had been raised, fairly litigated, and decided by the court in the trial on the underlying suit, even though it had not been formally pled in the complaint. (February 18, 2015)

In Platek v. Town of Hamberg, the New York Court of Appeals addressed whether an insurance policy’s water loss exclusion excludes coverage for a loss where an explosion is caused by water outside the residence. The court found that the water loss exclusion was unambiguous and barred coverage for loss that occurred when water from a burst water main flowed onto the insured’s property, flooding the basement of his home. (February 19, 2015)

In 24 Fifth Owners, Inc. v. Sirius America Insurance Company, the New York Supreme Court, Appellate Division, 1^st Department, addressed whether an insurer’s denial of coverage letter on late notice grounds sufficiently apprised the insured of the basis for the denial.  The court held that the letter sufficiently apprised the insured that notice was considered untimely relative to both the date of occurrence, and the insured’s receipt of the lawsuit. (January 29, 2015)

In S Bros. Inc. v. Leading Insurance Services, Inc., the New York Supreme Court, Appellate Division, First Department, addressed whether an insurance company’s initial refusal to provide coverage in the underlying action was an act of bad faith. The court held that the insurance company did not act in bad faith because there was no evidence establishing that it denied coverage to “‘delay and avoid payment on [the insured’s] claims’” and the insurance company “had an arguable basis for disclaiming coverage.” (January 22, 2015)

In Travelers Indem. Co. v Orange & Rockland Utils., Inc., the New York Supreme Court, Appellate Division, First Department addressed the issue of when an insurer has a duty to defend with respect to hazardous waste sites.  The court held that the insured’s argument was insufficient that it did not give timely notice under the policies because it did not have actual notice of any pollution. The court found that because there were documents that showed that pollution was likely and because the insured had been interacting with government regulators, the insured had sufficiently been placed on notice of the pollution.

In Bruno v. Erie Ins. Co., the Supreme Court of Pennsylvania ruled that an insureds’ negligence claim was not barred by the gist of the action doctrine, as the claim was based on an alleged breach of a social duty imposed by the law of torts, and not a breach of a duty created by the underlying contract of insurance.(December 15, 2014)

In Passatempo v. McMenimen, the Appeals Court of Massachusetts addressed whether an insurer (Nationwide) could be liable for the deceptive acts of an insurance broker who worked for another insurer acquired by Nationwide after the broker’s discharge.  The court concluded that Nationwide was liable for the acts of the broker because, first, the prior insurer was vicariously liable for the broker’s breach of fiduciary duty and, second, Nationwide became liable as the successor in interest to the prior insurer. (December 11, 2014)

In Vineyard Sky, LLC v. Ian Banks, Inc. the New York Supreme Court, Appellate Division, First Department, addressed whether a commercial general liability policy covered damage to property owner’s building that was caused by insured’s failure to adequately cover the  roof.  The court held that the commercial general liability policy provided coverage for claims brought by third parties, but not first-party coverage for damage to property owner’s building. (December 4, 2014)

In FSLM Associates LLC v. Arch Insurance Group, the New York Supreme Court, Appellate Division, First Department, addressed whether the plaintiffs’ claim was “excluded from coverage under the policy endorsement entitled Exterior Insulation and Finish System Exclusion.”  The court held that subject product was applied to a building “as a coating to…level the concrete masonry wall in preparation for the installation of the exterior insulation finish system.”  Thus, the “‘clear and unmistakable language’ of the policy exclusion applies.” (November 18, 2014)

In this multi-forum litigation, The North River Insurance Company v. Mine Safety Appliances Company,  the Supreme Court of Delaware denied a permanent injunction to an excess insurance carrier against an insured from assigning to tort claimants the right to recover settlement proceeds under an excess insurance policy in foreign jurisdictions.  The Court  held that there was little to no evidence in the record that there was a risk for inconsistent judgments amongst the jurisdictions nor was there insufficient proof of “actual, rather than probable success on the merits.”  The Court held that the power to enjoin prosecution of litigation in a foreign jurisdiction is discretionary, and should be exercised cautiously. (November 10, 2014)

In Burke v. Independence Blue Cross, the Supreme Court of Pennsylvania addressed the issue of whether an insured party has the right to judicial review of an administrative decision by an independent external review agency that denied insurance coverage for autism-related services, given the language of 40 P.S. §764h(k)(2) (“Act 62”) which states, “[a]n insurer or covered individual … may appeal … an order of an expedited independent external review disapproving a denial or partial denial.” The Court determined that the plain text of this unambiguous statute was not the best indication of legislative intent. Reasoning that an external reviewer acts as an agent on behalf of the Department of Insurance under Act 62, the Court held that judicial review of the administrative decision denying coverage was appropriate. (October 31, 2014)

In The North River Insurance Company v. Mine Safety Appliances Company, the Supreme Court of Delaware addressed whether North River, a New Jersey liability insurer, was entitled to a permanent injunction prohibiting Mine Safety Appliances Company (MSA), a Pennsylvania manufacturer of safety products, from assigning to any tort claimants the right to recover under any insurance policy issued by North River to MSA.  Based on numerous other similar cases pending in Pennsylvania and West Virginia, North River argued that the injunction was necessary to prevent inconsistent judgments across forums.  The court noted that MSA’s use of multiple filings in multiple forums did not automatically tip the balance of equities against MSA and noted further its reluctance to interfere with the prosecution of lawsuits in other jurisdictions.  On this basis, the court denied North River’s request for permanent injunctive relief. (November 6, 2014)

In Verril Farms, LLC v. Farm Family Casualty Ins. Co., the Appeals Court of Massachusetts addressed whether, under a business owners special property coverage policy, ordinary payroll costs can be included when calculating loss of business income, even when the insured resumed operations at temporary locations during the restoration period.  Because the policy was designed to place the insured in a position as if no loss had occurred and because the policy required the continuation of business operations as soon as possible after the loss, the court held that ordinary payroll costs must be included when determining the net profit or loss component of the loss of business income calculation. (November 4, 2014)

In Matter of Allstate Insurance Company v. Marke, the New York Supreme Court, Appellate Division, Second Department, addressed an insurer’s right to stay an arbitration initiated by its insured.  The court held that, where the insurance policy does not contain an agreement to arbitrate, the insurer is not bound by the CPLR 7503(c) requirement that petitions to stay arbitration be brought within 20 days of the commencement of the arbitration. (October 29, 2014)

In Katz v. Castlepoint Ins. Co., the New York Supreme Court, Appellate Division, Second Department, addressed whether income tax returns are discoverable in an insurance coverage dispute in order to demonstrate the location of an insured’s primary residence.  The court found that the insurance company failed to make a strong showing that the information was indispensable to its claim or defense, or could not be obtained from another source, and therefore denied its request. (October 22, 2014)

In Auto Flat Car Crushers, Inc. v. Hanover Insurance Company, the Supreme Judicial Court of Massachusetts addressed whether the policyholder’s claim for multiple damages under the Massachusetts statute regarding unfair and deceptive trade practices (Chapter 93A) against its insurer for failing to pay defense costs in an earlier suit could proceed where, during the pendency of the suit, the policy holder accepted reimbursement for the full disputed defense costs with interest. The court concluded that because Chapter 93A does not require a demonstration of uncompensated loss or a judgment on an underlying claim, the policy holder may proceed with its Chapter 93A claim against its insurer. (October 15, 2014)

In Sea Trade Maritime Corp. v Marsh USA, Inc., etc., the New York Supreme Court, Appellate Division, First Department, addressed whether an insurer accurately expressed the scope of its policy to a maritime corporation that entered into it.  The maritime corporation’s ship suffered damage as a result of an alleged terrorist bombing.  The insurer issued the corporation less of an award pursuant to the policy’s terms because the corporation did not give notice to the insurer of the ship’s precarious location prior to it suffering harm in that location.  The corporation brought an action against the insurer for negligently failing to procure the requested coverage – i.e., coverage where notice was not needed.  The court found that the evidence established that the corporation’s agent was familiar with the insurer’s rules.  Thus, the court held that the corporation did not offer evidence to support bringing a third amended complaint against the insurer. (September 30, 2014)

In National Union Fire Insurance Company of Pittsburgh, PA v. 221-223 West 82 Owners Corp., the New York Supreme Court, Appellate Division, First Department, addressed whether the insurer was obligated to defend or indemnify a construction company in an underlying personal injury action, where the underlying plaintiff’s bill of particulars established that the injuries at issue did not qualify as “grave injur[ies]” within the meaning of Workers’ Compensation Law Section 11.   The court held that the insurer was entitled to rely on the underlying plaintiff’s bill of particulars, and further held that the insurer did not have an obligation to defend or indemnify the construction company. (September 25, 2014)

In B&R Consolidated, LLC v. Zurich American Insurance Company, the New York Supreme Court, Appellate Division, Second Department, addressed whether an untimely disclaimer by an insurer automatically estops the insurer from disclaiming on the basis of late notice.  The court held that, where the matter does not involve death or bodily injury, the untimely disclaimer by an insurer does not automatically estop the insurer from disclaiming on the basis of late notice unless there is a showing of prejudice to the insured due to the delay.  The court found that the insured was prejudiced by the late disclaimer such that the insurers were estopped from disclaiming coverage. (September 24, 2014)

In Moses v. Nationwide Mutual Fire Insurance Company and Ward v. Nationwide Mutual Fire Insurance Company, the Supreme Court of Delaware held that an automobile policy did not provide coverage for a wrongful death claim which arose from an insured’s participation in a homicide. The court found no direct relationship between the insured’s use of his vehicle and the plaintiffs’ injury as the vehicle only provided transportation to and from the crime scene. (September 25, 2014)

In AmerisourceBergen Corp. v. ACE, the Superior Court of Pennsylvania addressed whether ACE properly denied coverage under a “prior or pending litigation” exclusion.  The court upheld the trial court ruling that ACE, under the terms of its claims-made policy, correctly denied coverage given that the claims at issue were originally filed almost a year prior to the effective date of the policy. (September 15, 2014)

In Alabama Insurance Guaranty Association v. Reliance Insurance Company in Liquidation, the Commonwealth Court of Pennsylvania, determined that an insurance policy purchased by the Alabama Reinsurance Trust Fund (a fund formed under Alabama law by a group self-insured employers that provides excess coverage above the self-insured retention levels of the individual employer groups) was a policy of reinsurance rather than direct insurance and should be treated as reinsurance for purposes of claim administration.  The fact that an Alabama court held the policy to be direct insurance had no preclusive effect on the Liquidator as the Liquidator was not a party to that litigation and so neither Full Faith and Credit nor collateral estoppel applied to the Alabama court decision. (September 12, 2014)

In Scottsdale Indemnity Company v. Beckerman, the New York Supreme Court, Appellate Division, Second Department, addressed whether an insurer was obligated to defend or indemnify the insureds, individually and in their official capacities, with respect to claims for damages resulting from, an alleged de facto taking and violation of Eminent Domain Procedure Law.  The court held that the defendants’ claims were “specifically excluded from coverage by the clear and unambiguous language of the policy,” which provided an exclusion for “‘any injury or damage arising out of or resulting from a taking that involves or is in any way related to the principles of eminent domain, inverse condemnation…or dedication by adverse use or by whatever name used.’” (September 10, 2014)

In Clarke v. MMG Ins. Co., the Superior Court of Pennsylvania addressed whether an insured injured while riding his motorcycle was precluded from receiving Underinsured Motorist (UIM) benefits from his motor vehicle insurance policy, which covered his cars but not his motorcycle.  The court looked at the plain language of the policy and the Household Exclusion provision and determined that the Exclusion prohibited UIM coverage only when the insured failed to maintain any UIM coverage under any policy.  Since the insured maintained a separate insurance policy with UIM coverage for his motorcycle, he was not precluded from seeking further UIM coverage from his policy covering his cars. (September 4, 2014)

In Guideone Ins. Co. v. Darkei Noam Rabbinical Coll., the New York Supreme Court, Appellate Division, Second Department, addressed the issue of denial of insurance coverage based on late notice for insurance policies issued prior to the 2008 amendment to Insurance Law § 3420.  The 2008 amendment to Insurance Law § 3420 permits an insurance company to deny coverage based on late notice only if it can show it was prejudiced by the insured’s late notice. The court held that because the subject policy was issued in 2004, prior to the amendment to Insurance Law § 3420, the insurance company was entitled to deny coverage based on late notice when the insured waited approximately nine months to notify the insurer of a personal injury claim. (August 20, 2014)

In National Union Fire Insurance Company of Pittsburgh v. TransCanada Energy USA, the New York Supreme Court, Appellate Division, First Department, addressed whether insurers’  documents pre-dating the insurers’ rejection of an insured’s claim were protected by the attorney-client privilege or the work product doctrine or as materials prepared in anticipation of litigation.  The court found that the coverage counsel, who prepared the documents, were primarily engaged in claims-handling, which is an ordinary business activity for an insurance company.  The court held that documents prepared in the ordinary course of an insurer’s investigation of whether to pay or deny a claim are not privileged and they do not become so merely because the investigation was conducted by an attorney.  The court did not address whether any documents prepared after the insurers denied coverage were protected attorney work product. (July 31, 2014)

In Warrantech Consumer Products Services, Inc. v. Reliance Insurance Company, the Supreme Court of Pennsylvania held that 40 P.S. § 221.21 of the Insurance Department Act terminates coverage for all “risks in effect” under a policy of insurance no later than 30 days after an insurer enters liquidation.  Consequently, the policyholder’s claim seeking reimbursement under two insurance policies issued by the liquidating insurer failed. (July 21, 2014)

In USF Insurance Company. v. Langlois, the Appeals Court of Massachusetts addressed whether an insured was entitled to coverage under a policy that contained a criminal acts exclusion, where the named insured was both a family trust and a corporation that leased the building owned by the family trust and where one of trustees, who was also a director of the insured corporation, intentionally set fire and caused damage to the insured property.  Because the insureds’ interests were “‘inextricably intertwined,’”  the other members of the trust were not innocent coinsureds.  Thus, the court held that the criminal acts exclusion barred coverage for the other members of the trust and for the corporation. (July 22, 2014)

In Pacific Indemnity Company v. Lampro, the Appeals Court of Massachusetts considered whether, under a general liability insurance policy, a landscape company’s failure to follow certain restrictions was covered under the policy, which defined an occurrence as “‘an accident, including continuous or repeated exposure to . . . harmful conditions.’”  Because the landscape company simply exceeded the scope of its work, the court held that the damage to the property, was not accidental, but was merely an “undesirable” outcome of its work and was not covered under the liability policy. (July 24, 2014)

In Segundo Lema. v. Tower Insurance Company, the New York Supreme Court, Appellate Division, Second Department, addressed whether the defendant insurer established its prima facie entitlement to judgment as a matter of law by submitting evidence demonstrating that the plaintiff made a material misrepresentation in the application for homeowners insurance. The court held that the insurer made its prima facie showing based, in part, on an affidavit from its underwriting manager which showed that it would not have issued the policy if the application had disclosed that the subject premises was actually a three-family dwelling, as opposed to a two-family dwelling. (July 9, 2014)

In Erie Insurance v. Catania, the Superior Court of Pennsylvania addressed the applicability of the “regularly used non-owned vehicle” exclusion to an uninsured motorist claim.  The court held that because plaintiff was driving a work vehicle that he regularly drove but did not own, the policy exclusion applied to preclude coverage. 

In Hansen v. Sentry Insurance Company, the United States Court of Appeals for the First Circuit considered whether intentional misconduct by an officer of an insured triggered the insurer's duty to defend that officer under a commercial general liability policy, where that policy required that the insurer pay damages for injury caused by an offense "arising out of your business."  Determining that the policy's language unambiguously requires an injury caused by an officer of the insured corporation to be the result of conduct by the officer within his corporate duties, the court held that the insurer was not required to defend that officer in the underlying claims because those claims were premised on allegations of intentional acts that were contrary to the insured's interests and not within his corporate duties. (June 25, 2014)

In Certain Interested Underwriters at Lloyds, London v. LeMons, the Massachusetts Court of Appeals considered whether an insurance policy’s assault and battery exclusion, excludes assaults and batteries committed by third parties on the insured property.  The policy excluded coverage for “any act or omission in connection with prevention or suppression of an assault or battery, committed by any Insured or an employee or agent of the insured.”  The court held that the policy excludes coverage from an assault and battery, regardless of who committed the assault and battery. (June 4, 2014)

In Sirius XM Radio Inc. v. XL Specialty Insurance Company, the New York Supreme Court, Appellate Division, First Department, addressed whether a policy issued by the insurer defendant was ambiguous with respect to whether its requirement of notice with respect to “any” claim pertained to related claims under the provisions for “Interrelated Wrongful Acts.”  The court held that, even if the policy required notice of every interrelated claim as soon as practicable, there were issues of fact regarding whether the insured knew about three interrelated actions and yet did not provide notice to the insured until almost a year after they were filed.  The court further held that the insurer’s argument that the insured did not ask for consent to incur defense expenses failed if the claims were found to be interrelated and treated as a single claim under the policy. (May 29, 2014)

In Kerrigan v. Metropolitan Life Insurance Co., the New York Supreme Court, Appellate Division, First Department, addressed whether the decedent, who denied a prior heart condition when executing an insurance application, can put the onus of discovering the condition upon the insurance company through subsequent notice given by the decedent’s cardiologists.  The court held that the plaintiff may not “shift the burden of truthfulness” to an insurer.  Thus, the court ruled that the decedent’s estate could not argue that the insurer waived its right to rescind the policy. (May 20, 2014)

In National Union Fire Ins. Co. of Pittsburgh, PA v. Turner Constr. Co., the New York Supreme Court, Appellate Division, First Department addressed whether the plaintiff was obligated to indemnify a general contractor and its subcontractor pursuant to the insurance policy’s definition of “occurrence” where defendants were sued in an underlying action for faulty design, fabrication, and installation of a construction curtain wall and pipe rail system.   The court held that the negotiated amendment of the definition of “occurrence” in the commercial liability policies to include the words “event, or happening” along with the word “accident” did not expand the definition so as to encompass faulty workmanship. (May 15, 2014)

In Doctor’s Choice Physical Medicine and Rehabilitation Center, P.C. v. Travelers Personal Insurance Company, the Superior Court of Pennsylvania held that an insurer must pay attorney’s fees where it wrongfully refuses to pay a medical provider’s invoice for medical services rendered to an automobile insurance policy holder.  The court held that, under 75 Pa. C.S. 1797(b)4, an insurer will be liable for attorney’s fees incurred by the medical provider in collecting the amount due where the insurer’s refusal to pay is based upon its internal review process that fails to meet the statutory requirements of a “peer review” necessary for proper refusal to pay such an invoice. (May 2, 2014)

In National Casualty Company v. Kinney, the Superior Court of Pennsylvania addressed whether the Workers’ Compensation Act (WCA) is the sole remedy for employees injured while commuting to work in a ridesharing program whose cost was defrayed by the injured employees’ employer.  The court relying on the “coming and going rule” held that injuries sustained while commuting to or from one’s workplace is not compensable under the WCA.   As a result, the van company’s insurer was required to provide coverage for the accident. (April 25, 2014)

In John v. State Farm Mutual Automobile Insurance Company, the New York Supreme Court, Appellate Division, 2d Department, addressed whether parties to an insurance policy “‘may agree to limit the period of time within which an action must be commenced to a period shorter than that provided by the applicable statute of limitations.’”  The court held that the limitations period may be shortened absent a showing that “‘the party against which the abbreviated…[period] is sought to be enforced’” was induced to enter such agreement by fraud, duress, or misrepresentation. (April 30, 2014)

In Egan v. USI Mid-Atlantic, Inc., the Superior Court of Pennsylvania analyzed whether a waiver form is required to validly reject UM/UIM coverage under the Motor Vehicle Financial Responsibility Law (MVFRL) for commercial fleet automobile insurance policies.  The court analyzed the Pennsylvania Supreme Court’s decision in  Everhart v. PMA Ins. Group, 938 A.2d 301 (Pa. 2007), which held that a similar form was not required to reject stacking of UM/UIM coverage under commercial fleet policies.  Although the court recognized the similarities between the UM/UIM stacking waiver form at issue in Everhart and the UM/UIM waiver form, the court concluded that it was bound by its own jurisprudence pre-Everhart and held that a waiver form was required to validly reject UM/UIM coverage for commercial fleet policies. (April 2, 2014)

In Hicks v. Sparks, the Supreme Court of Delaware addressed whether an insurance release could be rescinded, as a result of post-release injuries which surfaced, on the basis of mutual mistake of fact between the parties. The court held the record reflects there was no mutual mistake of fact at the time the release was signed, and the injured party “assumed the risk of mistake” in executing a “clear and unambiguous release in exchange for a settlement payment.” (March 25, 2014)

In Nova Casualty Company. v. RPE, LLC and Kong Shun Wang v. Northfield Insurance Company, the New York Supreme Court, Appellate Division, Second Department, addressed where proper venue lies for two related actions for judgments declaring rights and obligations of the parties under two insurance policies.  The court held that when a trial court orders consolidation or joint trials, venue generally should be placed in the county where jurisdiction was invoked in the first action. (March 12, 2014)

In Ardente v. Standard Fire Insurance Company, the United States Court of Appeals for the First Circuit addressed whether (under Rhode Island Law) damage resulting from the use of water-permeable balsa wood, where waterproof solid laminate should have been used in the hull of a yacht, was covered by an insurance policy.  The policy excluded manufacturing defects, except those falling under a latent-defect exception, requiring the court to analyze whether the use of the wrong material was a latent defect under the definition “a hidden flaw inherent in the material existing at the time of the original building of the yacht, which is not discoverable by ordinary observation or methods of testing.”  Concluding that this language was unambiguous in the context of the policy as a whole, the Court reasoned that the damage resulted not from a hidden flaw in the material (the balsa wood), but from the very use of the material itself, and thus did not constitute a latent defect. (March 12, 2014)

In Georgitsi Realty, LLC v. Penn-Star Insurance Company, the United States Court of Appeals for the Second Circuit addressed whether a property insurance policy covered acts of vandalism when the malicious damage was found to result from an act not directed specifically at the covered property.  Rather, damage was caused to the property by the illegal excavation of a parking garage next door.  The court held that malicious damage within the meaning of the policy may result in malicious acts not directed at the covered property, and that an insured may establish malice by showing the vandals exhibited “a conscious and deliberate disregard of the interests of others.” (March 12, 2014)

In Titeflex Corporation v. National Union Fire Insurance, the Superior Court of Pennsylvania addressed an excess insurance company’s duty to defend its insured in an underlying action related to leakage of gasoline from its property.  The court, noting the duty to defend is broader than the duty to indemnify, held that the gas spill was a single occurrence, the primary policy had been exhausted and the excess insurer’s duty to defend was triggered. (March 5, 2014)

In East 51st Street Development Company LLC v. Lincoln General Insurance Company, the New York Supreme Court, Appellate Division, First Department, addressed whether a defendant insurance company had a duty to defend or pay defense costs to plaintiffs upon payment of the declared limit.  The court held that where no new evidence exists, the court’s prior determination “that the ambiguity of whether ‘expenses’ under the policy includes defense costs must be construed against [a defendant insurance company], and that the policy does not provide for defense within limits, constitutes the law of the case and forecloses subsequent review of essentially the same issue.” (February 27, 2014)

In Executive Plaza, LLC v. Peerless Insurance Company, the New York Court of Appeals addressed the reasonableness of a contractual limitation period for an insured to bring suit under a fire insurance policy.  The court held that, because the policy contained a condition precedent that could not be met by the insured within the limitations period, the limitation was unreasonable and unenforceable. (February 13, 2014)

In Davis & Partners, LLC  v QBE Ins. Corp., the New York Supreme Court, Appellate Division, First Department, addressed whether New York or New Jersey law applied in the context of a defendant-insurer claiming untimely notice of its alleged obligation to provide plaintiffs with insurance coverage pursuant to an insurance policy in an underlying personal injury action.  The court used a “grouping of contracts” analysis to find that the construction contract was executed in New York, the project was located in New York, the involved parties were mandated to use New York entities, the contract contained a New York choice of law provision, and the incident “occurred” and was litigated in New York.  Thus, the court held that the factors in favor of applying New York law outweighed the fact that the contractor’s principal place of business was in New Jersey. (January 28, 2014)

In James v. New Jersey Manufacturer’s Insurance Co., the Supreme Court of New Jersey addressed the retroactive application of a legislative amendment prohibiting the use of “step-down” provisions in commercial automobile policies.  The court held that the statute could not be applied retroactively, and plaintiff-employee’s claim was governed by the provisions of the policy that were in place at the time of the accident, which capped recovery of underinsured motorist (UIM) benefits for an employee at the limit contained in the employee’s own personal policy and not the limit in the employer’s commercial policy. (February 3, 2014)

In AAA Mid-Atlantic Insurance Co. v. Ryan, the Supreme Court of Pennsylvania addressed whether an insured’s recovery under a UIM policy should be offset by all damages paid to the insured or only the amount paid under the underinsured driver’s policy.  The court held that all amounts recovered should be credited against the insured’s UIM policy to prevent the insured from obtaining a double recovery for the same injuries. (January 21, 2014)

In Martinez v. OEL Realty Corp., the New York Supreme Court, Appellate Division, First Department, addressed whether an insurer had a duty to defend or indemnify a claim involving assault and battery where the complaint contained a cause of action for negligence and the policy at issue contained an exclusion for assault and battery. The court held that because the complaint’s negligence allegations could not survive except for the assault, those claims are deemed to have arisen from the assault and are thus subject to the assault and battery exclusion. (January 9, 2014)

In Ashley v. Ashley, the Superior Court of Pennsylvania addressed the proper interpretation of an automobile insurance policy.  The court held the policy was not ambiguous and Pennsylvania’s general rule that a claimant cannot collect both underinsured motorist benefits and bodily injury damages from the same policy applied. (November 27, 2013)

In Indalex Inc. v. National Union Fire Insurance Company, the Superior Court of Pennsylvania addressed whether the gist of the action doctrine, which prevents a plaintiff from unilaterally recasting as a tort claim what is actually a contract claim, should apply in the insurance coverage context.  The court held that the gist of the action doctrine is inconsistent with the duty to defend analysis and that the determination should focus on the allegations in the underlying complaint. (December 3, 2013)

In Simmons v. Allstate Indem. Co., the New York Supreme Court, Appellate Division, Second Department, addressed when a plaintiff could bring an action alleging negligent misrepresentation against her insurance agency after the insurer disclaimed coverage for property damage resulting from a fire.  The court dismissed the negligent misrepresentation claim, holding that the plaintiff failed to allege any misrepresentation by the agency, and further failed to allege the existence of a special relationship upon which a cause of action alleging negligent misrepresentation could be predicated. (December 4, 2013)

In Procopio, Jr. v. Government Employees Insurance Company, the Superior Court of New Jersey addressed whether simultaneous discovery should be permitted on the plaintiff’s underinsured motorist and bad faith claims, which were bifurcated for trial.  During the discovery process, the plaintiff sought the insurer’s entire claim file and other information specifically for the bad faith claims.  The court held that simultaneous discovery on the bifurcated claims would result in a significant expenditure of time and money that would be unnecessary if the insurer prevailed on the plaintiff’s underinsured motorist claim.  The court also found that such premature discovery would jeopardize the insurer’s defense of the underinsured motorist claim by the disclosure of potentially privileged materials. (November 21, 2013)

In Hartford Underwriting Insurance Co. v. Greenman Pederson, Inc., the New York Supreme Court, Appellate Division, First Department, addressed whether an insurer had a duty to defend and indemnify an insured where the insurer failed to disclaim coverage for approximately three years after receiving a pre-claim report of the accident.  The court held that an insurer, after receiving knowledge of facts entitling it to disclaim coverage or determining that it will disclaim coverage,  must notify the policyholder of its disclaimer of coverage as soon as is reasonably possible. (November 26, 2013)

In Matter of AutoOne Insurance Company v. Sarvis, the New York Supreme Court, Appellate Division, Second Department, addressed whether an insurer’s disclaimer of coverage was sufficient where the disclaimer of coverage was not based solely on the insured’s failure to comply with the notice requirements of the subject policy, but was also based on noncompliance by the injured claimant.  The court held that because the insurance company established that it was prejudiced by the injured claimant’s failure to provide timely notice and its disclaimer of coverage was timely, the notice was sufficient. (November 20, 2013)

In W. Park Associates, Inc. v. Everest National Insurance Company, the New York Supreme Court, Appellate Division, Second Department, addressed whether the filed rate doctrine barred a claim that the defendant insurance company charged the plaintiffs, general contractors and residential home builders, a higher premium for a commercial general liability policy based on the plaintiffs’ employment of uninsured subcontractors, despite the fact that the policy expressly excluded coverage for liability arising from the work of such subcontractors.  The court explained that the filed rate doctrine holds that “any filed rate – that is, one approved by the governing regulatory agency (here, the Insurance Department) – is per se reasonable and unassailable in judicial proceedings brought by ratepayers,” and held that because the Insurance Department approved both the exclusion at issue and the rates, the plaintiffs’ claim was barred by the filed rate doctrine. (November 20, 2013)

In Assured Guar. Mun. Corp. v. DB Structured Prods., Inc., the New York Supreme Court, Appellate Division, First Department, addressed the discoverability of documents and information concerning plaintiff’s pre-complaint forensic re-underwriting (repurchase) review of the loans at issue.  The court held that the repurchase review was protected from discovery because plaintiff did not waive any privilege by referencing the pre-litigation repurchase review in its complaint. Furthermore, this finding will not deprive defendants of information vital to their defense since the plaintiff disavows any intention to use such materials to help establish its claim. (November 14, 2013)

In Grossi v. Traveler’s Personal Insurance Company, the Supreme Court of Pennsylvania addressed whether a failure to investigate a lost wage claim submitted to the UIM carrier constituted bad faith, and warranted punitive damages. After review of the factual circumstances, the court held that the evidence supported the bad faith claim, and the punitive damages awarded were not unconstitutionally disproportionate. (November 1, 2013)

In Lexington Insurance Company v. The Charter Oak Fire Insurance Company, the Superior Court of Pennsylvania examined when an exhaustion clause triggers an excess insurer’s duty to defend.  The court held that, under the terms of the insurance policy, the excess carrier’s duty to defend arose upon the primary general liability carrier’s payment of its policy limits.  The court further concluded that the excess carrier’s duty to defend continued under the terms of the policy until the policy limits had been exhausted by payment of settlements or judgments. (November 6, 2013)

In Masonic Home of Delaware, Inc., v. Certain Underwriters at Lloyd’s London, the Supreme Court of Delaware addressed whether an insurance policy covers a personal injury claim brought by an employee of an independent contractor, when an exclusion to the policy provides that the insurer is not required to defend or indemnify the insured for damages sustained by an independent contractor.  The Court held that the failure to include the language “or the employee of an independent contractor” did not render the policy ambiguous and that the exclusion did apply to employees of independent contractors. (October 2013)

In Vanderhoff v. Harleysville Insurance, the Supreme Court of Pennsylvania addressed whether an insurer must prove prejudice relative to the late reporting of an accident involving an unidentified vehicle when the accident was timely reported to law enforcement officials.  The court held, while an insurer will not be permitted to deny coverage absent prejudice caused by an insured’s delay in notice, showing such prejudice does not require proof of what the insurer would have found had timely notice been provided. (October 30)

In Dinstber v. Allstate Ins. Co., the New York Supreme Court, Appellate Division, Fourth Department addressed whether plaintiff could bring a tort claim after the defendant-insurer denied plaintiff’s no-fault claim.  Dismissal of the complaint was appropriate because plaintiff did not allege a tort existing independently from the parties’ contract.  The court further held that plaintiff failed to state a cause of action for punitive damages based upon tortuous conduct. (October 31)

In The Clark School for Creative Learning, Inc. v. Philadelphia Indemnity Insurance Company, the United States Court of Appeals for the First Circuit addressed whether an insurer had a duty to defend, under a directors and officers policy, a suit against a private school for return of a $500,000 gift on the grounds that it had been induced by fraud.  The policy contained a Known Circumstances Exclusion specifically excluding any loss arising out of or in any way involving any matter disclosed in a certain portion of the school’s financial statement.  This very portion of the financial statement referred to the gift, but did not note any controversy surrounding the gift as it had not yet arisen. Although the school argued that the intent of the exclusion had been to exclude any matters arising out of the school’s debts and troubled finances, mentioned in the same portion of the financial statement, the court held that under the clear and broad language of the exclusion, this matter was not covered. (October 23, 2013)

In Georgitsi Realty, LLC v. Penn-Star Insurance Co., the New York Court of Appeals addressed whether, under a property insurance policy covering vandalism constituting “malicious damage,” coverage is triggered if an act is not directed specifically at the covered property.  The court held that the ordinary meaning of vandalism “need not imply a specific intent to accomplish any particular result” and therefore a vandalism coverage provision is triggered as long as “damage naturally and foreseeably results from an act of vandalism.”  With respect to the requisite state of mind to trigger such a coverage provision, the court held that the vandal need have acted with a “conscious and deliberate disregard of the interests of others.” (October 17, 2013)

In Property & Casualty Insurance Co. of Hartford v. Levitsky, the New York Supreme Court, Appellate Division, First Department, addressed when a policyholder’s obligation to provide its liability insurer with “timely” notice of circumstances which “may” give rise to a claim is triggered.  The policyholder argued that its notice was timely because its obligation was not triggered until the trial court in an underlying action entered a ruling adverse to the policyholder.  The court held that the notice provided was not timely because the imminent expiration of the statute of limitations on the underlying action against the policyholder created a reasonable expectation that the action would be filed. (October 15, 2013)

In Estate of O’Connell v. Progressive Insurance Co., the Superior Court of Pennsylvania addressed whether UIM coverage is available when the underinsured vehicle is not involved in an accident.  The court held that coverage was not afforded because the only vehicle relevant to a UIM claim is the one involved in the accident.  Further, the court held that to find coverage would undermine the “cost containment objective” of the Motor Vehicle Financial Responsibility Law. (October 8, 2013)

In Vermont Mutual Insurance Co v. Zamsky, the United States Court of Appeals for the First Circuit addressed whether an exclusion in a homeowner’s policy for injuries “arising out of a premises” owned by an insured but not itself an insured location (the “UL Exclusion”) applied to severe burns stemming from use of gasoline in a fire pit on an uninsured property.  Analyzing two prior Massachusetts cases, the First Circuit reasoned that Massachusetts law establishes the following dichotomy: if the covered occurrence arises out of a condition of the premises and the exclusion's other requirements are satisfied, the exclusion applies; otherwise, it does not.  Here, the fire pit was not a condition of the premises, and the exclusion did not apply. (October 9, 2013)

In Allstate New Jersey Insurance Co. v. Lajara, the Superior Court of New Jersey addressed whether the New Jersey Insurance Fraud Prevention Act provides a right to a trial by jury.  Because such a right is not contained in the plain language of the Act, nor is it implied by the legislative history or intent of the statute, the court found that the Act does not guarantee a right to a jury trial.  Furthermore, due to the equitable nature of the Act, the court found that such a right is likewise not guaranteed by the New Jersey Constitution. (October 9, 2013)

In Farmers Mutual Fire Insurance Co. v. New Jersey Property-Liability Insurance Guaranty Association, the Supreme Court of New Jersey addressed the appropriate allocation of costs for environmental contamination property cleanup when one of two insurers on the risk is insolvent. The court held that, in long-tail, continuous-trigger cases where an insolvent carrier is on the risk along with solvent carriers, an insured must first exhaust the policy limits of the solvent carrier before seeking statutory benefits from New Jersey’s Guaranty Association.(September 24, 2013)

In Ginsburg v. Charter Oak Fire Insurance Co., the Supreme Court of New York, Appellate Division, Second Department, addressed whether an insurer breached an insurance contract by refusing to pay interest on the difference between the amount the insurer initially paid and a subsequent payment made pursuant to an appraisal award.  The court held that where the policy provided that the insurer was obligated to pay the insured within 60 days after receiving proof of the loss and the filing of an appraisal award, and did in fact pay the insured within 60 days of the filing of the award, the insurer did not breach its insurance contract by refusing to pay the interest on the difference. (September 25, 2013)

In Citizens United Reciprocal Exchange (CURE) v. Perez, the Superior Court of New Jersey, Appellate Division, addressed the scope of automobile insurance coverage an insurer is required to provide on liability claims for policies rescinded due to fraudulent concealment on an insurance application.  Although CURE’s insured maintained a “basic policy” with $10,000 in liability coverage, the court held that CURE was still required to pay up to the “standard policy” liability coverage limits of $15,000 per injury and $30,000 per occurrence under N.J.S.A. 39:6A-3 and 39:6B-1.  The court reasoned that reforming a voided policy to provide the standard liability coverage limits advances the legislative goal of assuring innocent accident victims at least some measure of financial protection. (September 13, 2013)

In Potomac Ins. Co. of Ill. v. Pa. Manufacturers’ Ass’n Ins. Co., the Supreme Court of New Jersey addressed whether one insurer may assert, against a co-insurer, a claim for defense costs incurred in litigation that arises from property damage manifested over a period of several years, during which the policyholder is insured by successive carriers. The court held that in light of each insurer’s obligation to indemnify and defend the insured for a portion of the period in which the continuing property damage occurred, the insurer has a valid cause of action for defense costs against the co-insurer. (September 16, 2013)

In Mutual Benefit Insurance Co. v. Politopoulos, the Superior Court of Pennsylvania addressed whether an employers’ liability exclusion  in a commercial landlord’s umbrella insurance policy barred coverage for a tenant employee’s claim.  Since the umbrella policy had a “Separation of Insureds” clause which directed the court to not consider the employer or employee when determining whether the policy provides coverage for the commercial landlord, it was distinguishable from a key precedent, which required imputing an employee status to the landlord by extension of the employee’s status to the tenant employer.  The landlord did not employ the claimant and therefore coverage was not barred. (September 6, 2013)

In N.E. Physical Therapy Plus, Inc. v. Liberty Mutual Insurance Company, the Supreme Judicial Court of Massachusetts addressed whether, in a dispute by an insurer that certain medical bills were unreasonably high, the insurer could introduce statistical evidence from a commercial database (prepared by Ingenix, Inc.) at trial to show that the charges exceeded the eightieth percentile of reported charges for the same procedures and were thus unreasonable.  The court concluded that trial judges may exclude such statistical evidence because it was derived from raw data that was voluntarily submitted by insurance companies and not fully verified and because an investigation by the New York Attorney General had shown that the rates produced  by Ingenix were lower than typical medical expenses. (September 10, 2013)

In Drysdale v. Allstate Property and Casualty Insurance Company, the Supreme Court, Appellate Division, Second Department, held that the insurer properly denied coverage under an automobile insurance policy on the basis that the insured made material misrepresentations regarding the loss of the vehicle. The plaintiff reported that the insured vehicle had been stolen, but the vehicle was later found on fire and it was determined that the fire had been deliberately set. The insured was arrested in connection with the incident, but was not convicted and the criminal action was dismissed on speedy trial grounds. The court noted that the insurer showed it had a “reasonable basis” for issuing a letter denying coverage “based upon the information available to it at the time.” (September 11, 2013)

In Oppenheimer AMT-Free Municipals v. ACA Financial Guaranty Corporation, the New York Supreme Court, Appellate Division, First Department, addressed the issue of whether an insurance company was relieved of its duty to pay its insured for losses suffered under municipal bonds when the bond issuer’s bankruptcy restructuring plan called for the bonds to be exchanged for new bonds.  The court held that the plain meaning of the insurance policy required the insurance company to guarantee payment on the bonds and noted that issuer insolvency and bankruptcy was “clearly a covered risk.” (September 3, 2013)

In K2 Investment Group, LLC. v. American Guarantee & Liability Insurance Company, the Court of Appeals of New York granted reargument of the court’s June 11, 2013 decision.  In its June 11, 2013 decision, the court held that an insurer that breaches its duty to defend may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against him.  While the court did not explain its reason for granting reargument, the insurance company argued that the June 11 decision misapprehended prior precedent, creating an inconsistency in the law regarding the circumstances in which an insurer that improperly failed to defend its insured could challenge its duty to indemnify based on policy exclusions. (September 3, 2013)

In Quaker Hills, LLC v. Pacific Indemnity Company, the United States Court of Appeals for the Second Circuit addressed whether an apportionment-of-loss clause in a fire insurance policy, which apportioned 38% of loss to the insurer, is enforceable as a matter of New York law.  The policyholder challenged that provision based on New York’s codified Standard Fire Insurance Policy, which sets certain minimum coverage standards for such policies.  The court concluded that New York precedent is unclear on this issue and certified the question to the New York Court of Appeals. (August 29, 2013)

In Rivera v. Commerce Insurance Company, the Appeals Court of Massachusetts addressed the proper measure of damages for loss of use in an unfair claim settlement practices case. The claim settled on the eve of trial, and in a subsequent bench trial under the Massachusetts Consumer Protection Statute, the judge found that an insurance company had failed to conduct a reasonable investigation and to effect a prompt, fair, and equitable settlement once liability was reasonably clear, for which economic damages consist of lost interest on the amount wrongfully withheld by the insurer in violation of c. 93A for the period of the unlawful delay.  The court addressed whether 6% interest was appropriate for such a lost interest calculation.  The court determined that the law requires only a "fair rate" of interest when calculating economic damages from loss of use, and that 6% had not been inappropriate in prevailing market conditions. (August 16, 2013)

In Norfolk & Dedham Mutual Fire Insurance Company v. National Continental Insurance Company, the Appeals Court of Massachusetts addressed whether an insurance company had complied with Massachusetts statute, which requires that the insurance company "immediately upon the intended effective date of the cancellation of [an automobile insurance] policy . . . forwarded to the registrar of motor vehicles a notice, in such form as he may prescribe, containing such information to apprise the registrar of the particular motor vehicle registration on which the insurance is intended to be cancelled."  Here, the insurer notified the Registry of Motor Vehicles three days after the policy's cancellation, but incorrectly identified the insured as an individual rather than a corporation.  The insurer sent a corrected report two weeks later.  After the corrected report, the former insured was in an accident with another driver, whose insurance company attempted to reach and apply the original insurer's policy. The court held that the second submission was a completion of the submission initiated three days after the cancellation, and thus timely under the statute.  The court left open the question of whether the cancellation would have been effective in the two weeks between the original submission and the correction. (August 14, 2013)

In Caron v. Horace Mann Insurance Company, the Supreme Judicial Court of Massachusetts addressed whether an endorsement in a homeowner's insurance policy limiting liability for animal  bites to $25,000 per occurrence should be struck on grounds of mutual mistake, where both the insurer's agent and the homeowner mistakenly believed there was no such limit, but neither conveyed this belief to the other. The court held that, absent full, clear, and decisive proof of some prior agreement between the parties as to coverage for animal bites different than that contained in the policy, there was no mutual mistake warranting reformation of the policy. (August 9, 2013)

In Golchin v. Liberty Mutual Insurance Company, the Supreme Judicial Court of Massachusetts addressed whether a claimant may seek medical expense benefits under the "medical payments" coverage (MedPay) offered in a standard Massachusetts automobile insurance policy (auto policy) where those expenses were covered and paid under the claimant's separate policy of health insurance. The court concluded that an insured is entitled to the MedPay benefits provided by her auto policy, notwithstanding that the medical expenses at issue were covered by and paid under a separate policy of health insurance. (August 8, 2013)

In Kelty v. State Farm Mutual Insurance Company, the Supreme Court of Delaware addressed whether personal injury protection (PIP) coverage in an auto insurance policy requires that the insured vehicle be used “for transportation purposes.”  Here, the plaintiff was injured when he fell from a tree while cutting branches attached by a rope to the insured vehicle.  The court found coverage because the applicable statutory language required that the accident only "involve" the insured motor vehicle and in this case the automobile was used to divert the branches away from power lines. (July 26, 2013)

In New Hampshire Ins. Co. v. MF Global, Inc., the New York Supreme Court, Appellate Division, First Department, addressed whether a “direct financial loss,” as defined under a fidelity bond agreement, has occurred when a broker’s failed trades trigger an entity’s contractual reimbursement obligations.  An MF Global broker made several large unauthorized trades resulting in certain shortfalls for which MF Global was obligated to reimburse CME, the clearinghouse for the trades.  The court rejected the insurer’s view that MF Global’s payment did not constitute a “direct financial loss” in light of “the immediacy of the payment, which was made only hours after the discovery” of the trades, in addition to “the regulatory scheme upon which it was premised.” (July 16, 2013)

In Babcock & Wilcox Co. v. American Nuclear Insurers, the Superior Court of Pennsylvania addressed whether a policyholder can require its insurer to fund a settlement made without the insurer’s consent when the insurer has reserved the right to deny coverage. The court held that when an insurer tenders a defense subject to a reservation, the insured may choose either of two (2) options: (1) the insured may accept the defense, in which event it remains unqualifiedly bound to the terms of the consent to settlement provision of the underlying policy; or (2) the insured may decline the insurer’s tender of a qualified defense and furnish its own defense, either pro se or through independent counsel retained at the insured’s expense. (July 10, 2013) The concurring and dissenting opinion can be found here.

In American International Insurance Co. of Delaware v. 4M Interprise, Inc., the Superior Court of New Jersey, Appellate Division, addressed whether New Jersey law violates the Federal Liability Risk Retention Act of 1986 (LRRA) by requiring risk retention groups to provide personal injury protection (PIP) benefits to pedestrians who sustain bodily injury by the named insured’s motor vehicle or by precluding them from participating in the New Jersey Property-Liability Insurance Guaranty Association, which pays pedestrian PIP benefits for commercial liability insurers who are members. The court held that requiring a risk retention group to provide PIP benefits to pedestrians did not violate the LRRA.  The court also held that New Jersey did not discriminate against risk retention groups in violation of the LRRA by precluding them from participating in the New Jersey Property-Liability Insurance Guaranty Association. (July 18, 2013)

In Executive Risk Indemnity, Inc. v. Cigna Corporation, the Superior Court of Pennsylvania addressed whether the insured or the insurer bore the burden of proof on the question of the allocation of settlement monies between claims that are covered under a policy versus those claims that are excluded.  The court held that the insured should bear the burden of proof for apportionment of claims. (July 18, 2013)

In Swarner v. Mutual Benefit Group d/b/a Mutual Benefit Insurance Co., the Superior Court of Pennsylvania addressed the applicability of the household exclusion to a claim for underinsured motorists (UIM) benefits. The plaintiff sustained injuries when she was struck by an uninsured/underinsured motorist as she lay in the roadway after having been involuntarily ejected from an uninsured motorcycle during an earlier collision.  The court narrowly construed the exclusionary language in plaintiff's automobile policy and held that the exclusion did not apply because the plaintiff did not occupy the motorcycle at the time of the accident. (July 18, 2013)

In Oyola v. Lan Liu, before the Superior Court of New Jersey, Appellate Division, addressed whether the New Jersey Property-Liability Insurance Guaranty Association (Association), an agency that pays insurance claims to the insured of an insolvent insurer, must pay a claim when the amount of workers' compensation and other benefits received by an insured exceeds the maximum liability for the claim but is less than the insured's damages. The court held that the Association is responsible to pay the policy limits for the insolvent insurer and is only entitled to an offset for the other benefits received from the insured’s total damages, not the policy limits. (July 15, 2013)

In McEwing v. Lititz Mutual Insurance Co., the Superior Court of Pennsylvania addressed whether an insured was entitled to coverage under her homeowner’s insurance policy that contained an exclusion for damage allegedly caused by groundwater. The court agreed that there was no evidence of water having caused the damage at issue and held that the insurer failed to meet its burden of establishing the applicability of the exclusion. (July 8, 2013)

In Deutsche Bank National Association v. First American Title Insurance Company, the Supreme Judicial Court of Massachusetts addressed whether a title insurer had a duty to defend a bank in a lawsuit seeking rescission of a note and mortgage issued by the bank’s predecessor in interest. The court concluded that the standard for whether a general liability insurer had a duty to defend – whether a complaint was reasonably susceptible of an interpretation that it states a covered claim – was inapplicable to a title insurer.  Rather, a title insurer's duty to defend is triggered only where the policy specifically envisions the type of loss alleged.  As the claims here (various torts related to what the plaintiff described as a predatory lending scheme) were not specifically envisioned by the policy, the court concluded that there was no duty to defend. (July 8, 2013)

In Central Mutual Insurance Company v. True Plastics, Inc., the Appeals Court of Massachusetts addressed whether a worker supplied to the insured from a labor leasing firm was a “temporary worker” within the meaning of the commercial general liability policy, for purposes of determining whether the insured was entitled to defense and indemnity in a lawsuit regarding that worker’s job-related injuries. The court held that the worker here was a “temporary worker” because she was furnished to meet short-term workload conditions, and rejected the insurer’s argument that a short-term workload condition must necessarily be of finite duration. (July 10, 2013) 

In First Specialty Insurance Company v. Pilgrim Insurance Company, the Appeals Court of Massachusetts addressed whether a general liability insurer had a duty to defend and indemnify its insureds for negligent supervision claims relating to an automobile accident involving an intoxicated employee of the insureds, where the commercial general liability insurance policy included an automobile exclusion.  Although previous Massachusetts cases had relied upon severability clauses to state that automobile exceptions did not preclude coverage if the automobile did not belong to the insured seeking coverage, the court noted that the policy in this case contained additional language making clear that the exclusion applied even were the automobile was owned or operated by a different insured. That paragraph states that the automobile exclusion "applies even if the claims against any insured allege negligence . . . in the supervision[] [or] hiring[] . . . of others by that insured," if the underlying claim involves an automobile "that is owned or operated by . . . any insured." Based on this language, the court concluded that the general liability insurer had no duty to defend or indemnify under the policy. (June 26, 2013)

In Utica Mutual Insurance Company v. Erie Insurance Company, the New York Supreme Court, Appellate Division, Fourth Department, addressed the priority of insurance coverage for injuries sustained by the plaintiff. The court held that the parties’ excess coverage clauses canceled each other out and that each insurer was obligated to pay the costs of defending and indemnifying the plaintiff in proportion to their coverage limits. (June 14, 2013)

In American Safety Indemnity Company v. Anthony W. Loganzo,  the New York Supreme Court, Appellate Division, Second Department, addressed whether the insurer was obligated to provide coverage under an assault and battery endorsement or under the general  liability policy. The court held that the plaintiff was obligated to provide coverage under only the assault and battery endorsement as defendant failed to present evidence supporting an exception to the endorsement. (June 19, 2013)

In the Matter of Liquidation of the Integrity Insurance Company, the Supreme Court of New Jersey addressed the application of collateral estoppel to an insured’s attempt to secure coverage from an excess insurer. In conjunction with Celotex’s bankruptcy proceedings, Celotex was held to have failed to provide adequate notice to its excess insurer of potential claims. The court held that this previous ruling barred all pending and future claims for coverage under the doctrine of collateral estoppel and not just claims made at the time Celotex filed for bankruptcy. (June 20, 2013)

In K2 Investment Group v. American Guarantee & Liability Insurance Company, the New York Court of Appeals held that a liability insurer that has breached its duty to defend cannot rely on policy exclusions to avoid indemnification. The court ruled that insurers that wrongfully refuse to defend their policyholders can only litigate the validity of their disclaimers of coverage. The court did note, however, there may be exceptions to the rule if, for example, public policy would prevent coverage. (June 11, 2013)

In J.P. Morgan Securities. Inc. v. Vigilant Insurance Company, the New York Court of Appeals held that Bear Stearns is not barred from seeking Directors and Officers insurance coverage for a $160 million portion of an SEC enforcement action settlement labeled as “disgorgement,” where Bear Stearns’ customers rather than Bear Stearns itself profited from alleged misconduct. The court found that the SEC Order “does not establish that the $160 million disgorgement payment was predicated on moneys that Bear Stearns itself improperly earned.” Instead, according to the court, the SEC Order states that Bear Stearns’ misconduct allowed its customers to profit. (June 12, 2013)

In Mahoney v. American Automobile Insurance Company, the Appeals Court of Massachusetts addressed whether the insurer is contractually obligated to indemnify a household member of its insureds in connection with a motor vehicle accident in which a third party's vehicle was struck (and the third party injured) by a vehicle rented by the household member while operated by an individual to whom the household member had negligently entrusted it. The court concluded that as the policy provided "this Part does not pay for the benefit of anyone using an auto without the consent of the owner," and the rental company had not authorized the driver's use of the car, there was no coverage. (June 3, 2013)

In Wheatley v. Massachusetts Insurers Insolvency Fund, the Supreme Judicial Court of Massachusetts addressed whether, when a plaintiff prevails in a consumer action against the insolvency fund under the Massachusetts consumer protection statute (Chapter 93A), the insolvency fund is liable for reasonable attorney's fees. The court concluded that the insolvency fund, an unincorporated association created by the Legislature, operates in a business context and is thus subject to all provisions of Chapter 93A, including its attorney’s fees provisions. (May 31, 2013)

In Mehdi Ali v. Fed. Ins. Co., the United States Court of Appeals for the Second Circuit analyzed the exhaustion clauses in several excess liability insurance policies. The court held that the excess liability coverage is only triggered when liability payments reach the attachment point, not when liability reaches the attachment point. (June 4, 2013)

In Century Indemnity Co. et al. v. Liberty Mutual Ins. Co., the New York Supreme Court, Appellate Division, First Department, addressed whether the lower court properly granted defendant’s motion to dismiss on grounds of forum non conveniens. The court upheld the decision, stating that the subject matter of the action, insurance coverage for liability relating to the manufacturing of products in Massachusetts, had no substantial connection to New York. (June 4, 2013)

In Murnane Building Contractors Inc. v. Zurich Am. Ins. Co., the New York Supreme Court, Appellate Division, Second Department, addressed whether defendant was obligated to defend plaintiff in the underlying action on a primary and non-contributory basis.  The court held that the defendant was obligated to defend and must reimburse plaintiff for all costs that were reasonably incurred by it or on its behalf in connection with its defense in the underlying action. (June 5, 2013)

In State Farm Fire and Casualty Company v. Carbo, the Superior Court of New Jersey, Appellate Division applied the Intentional Acts Exclusion to a lawsuit alleging both intentional and negligent assault. The court held that, as the plaintiff testified only to an intentional assault, there were no facts to support a claim that the insured acted negligently. As the plaintiff’s claim was only for intentional assault, the insured’s subjective intent to injure was presumed as a matter of law based upon the nature of his alleged actions. The court rejected as meritless the plaintiff’s argument that her injuries were improbable and, thus, the insurer must show that the insured had the subjective intent to cause the specific injuries sustained (i.e., retinal tears to both eyes).  Such injuries were an inherently probable result of a strike to the face and coverage was excluded. (June 6, 2013) White and Williams attorneys Robert T. Pindulic and Geoffrey F. Sasso secured this favorable result for our client.

In Executive Plaza, LLC v. Peerless Insurance Co., the United States Court of Appeals for the Second Circuit addressed the impact of a suit limitation provision in a fire insurance policy that conflicts with timing requirements in a replacement cost provision.  The policy required the insured to replace damaged property “as soon as reasonably possible” and before bringing suit against the insurer, while also requiring that any suit against the insurer be brought within two years of a fire.  The court held that the available precedent did not provide a consistent approach under New York law, and it certified the question to the New York Court of Appeals. (May 23, 2013)

In Commerce Insurance Company v. Alvarado, the Appeals Court of Massachusetts addressed, in a dispute between insurers arising out of an automobile collision, whether the tort liability exemption in Chapter 90, section 34M, only creates an offset for personal injury protection (PIP) benefits under Massachusetts insurance policies or for comparable benefits in policies issued in other states.  Noting that the purpose of no-fault insurance in Massachusetts is the avoidance of duplicative recoveries, the court held that any recovery from the other driver's liability policy should be offset by the no-fault benefits the injured driver received under his own policy. (May 14, 2013)

In Chow v. Merrimack Mutual Fire Insurance Company, the Appeals Court of Massachusetts addressed the scope of an insured’s duty under an insurance policy exclusion for damage caused by frozen pipes if (i) the house was unoccupied at the time of the loss, and (ii) the insured failed to use reasonable care to maintain heat in the building.  The court addressed whether use of reasonable care applied only to the insured homeowner or whether the negligence of a person entrusted by the homeowner to maintain heat in the building should be imputed to the homeowner. The court determined that whether a principal may be held vicariously liable for the failure of his agent to use reasonable care depends on the nature of the relationship between the principal and the agent, and thus the negligence could be imputed to the homeowner if there were a master-servant relationship, but not if the agent were an independent contractor not under the control of the homeowner. (May 15, 2013)

In New England Insulation Company v. Liberty Mutual Insurance Company, the Appeals Court of Massachusetts addressed, in the context of asbestos related claims, whether a cost-sharing agreement between insurers arising from a mediated settlement should be set aside following the judiciary’s adoption of a pro rata mechanism for determining damage allocation among multiple insurers.  The court held that the insurers should contribute based on a pro rata method of allocation, reiterating that pro rata allocation promotes judicial efficiency, engenders stability and predictability in the insurance market, provides incentive for responsible commercial behavior, and produces an equitable result. (May 22, 2013)

In 20-35 86th Street Realty, LLC v. Tower Insurance Company of New York, the New York Supreme Court, Appellate Division, First Department, addressed the issue of whether an insurer may assert assault and battery exclusions as affirmative defense to its duty to defend and indemnify its insured. The insurer had disclaimed coverage under the liability insurance policy at issue based on the assault and battery exclusions after individuals sustained bodily injury due to an alleged arson fire. However, the assault charges with which the accused arsonist had been charged in the related criminal proceeding did not include an element of intent. Nevertheless, the court held that the affirmative defenses were appropriate, as the critical inquiry was whether the accused arsonist intended to harm the occupants of the building. (May 14, 2013)

In Lynn v. Nationwide Ins. Co., the Superior Court of Pennsylvania addressed whether the anti-abuse provisions of the Unfair Insurance Practices Act, 40 P.S. § 1171.5(a)(14)(i)(D), was intended to prohibit the denial of claims of innocent co-insureds where the loss is caused by the intentional acts of another insured of the same insurance policy.  The court held that because the language of the statute unambiguously states that an insurance company is prohibited from “refusing to pay an insured for losses arising out of abuse to that insured . . . if the loss is caused by the intentional act of another insured,” the statute precludes denial of an innocent insured’s claims for losses caused by the intentional acts of another insured. (May 1, 2013)

In Main Street Associates, Inc. v. Arch Insurance Co., the New York Supreme Court, Appellate Division, First Department addressed whether an insurer should be equitably stopped from issuing a disclaimer when, at the time the disclaimer was issued, the insurer controlled the defense of the insured.  The court denied the insured’s motion for summary judgment, holding that because the insurer disclaimed liability under the policy while the underlying litigation was still in its “early phase,” the insured failed to establish that it was prejudiced as a matter of law.  The court recognized that the insured could have established prejudice by some factor other than the posture of the underlying litigation, but found that the insured had failed to do so. (May 2, 2013)

In Hopkins v. Erie Insurance Company, the Superior Court of Pennsylvania addressed the triggering of the statute of limitations on an underinsured motorist claim. According to the court, the statute of limitations on an underinsured motorist claim, an action based in contract, begins to run when the insured settles with, or secures a judgment against, the underinsured owner or operator, and therefore, as four years had passed since the claimant’s initial settlement, her petition was time-barred. (April 19, 2013)

In Weilacher v. State Farm, the Superior Court of Pennsylvania found, that if an insured purchases new UM/UIM coverage following an initial rejection of UM/UIM coverage, the insurer must provide UM/UIM coverage equal to the prior bodily injury liability coverage, unless the insured validly requests lower limits of coverage. (April 25, 2013)

In Meah v. Aleem Construction, Inc., the New York Supreme Court, Appellate Division, addressed whether an insurer owed defense and indemnification for its insured and additional insured where the insurer sought rescission of the policy based upon material misrepresentations made in the insurance application. The court held the policy was  void ab initio due to the material misrepresentations of the insured. It followed that no coverage existed for the additional insured as there was no valid existing policy. (April 24, 2013)

In Greater New York Mutual Insurance Co. v. Chubb Indemnity Insurance Company, the New York Supreme Court, Appellate Division addressed the timeliness requirement under Insurance Law § 3420(d)(2) for issuing a denial of coverage. The court held that insurer’s 15-month delay in disclaiming was untimely as a matter of law, and the insurer was therefore required to defend and indemnify the plaintiffs in the underlying personal injury action. (April 16, 2013)

In Robinson v. NJ Transit, the Superior Court of New Jersey, Appellate Division, addressed the issue of whether public entities must provide uninsured motorist (UM) insurance coverage to out-of-state uninsured residents. The court held that public entities need not provide UM insurance coverage to out-of-state uninsured residents because public entities are exempted from the obligation to comply with the NJ Compulsory Insurance Law, which requires owners of motor vehicles registered or principally garaged in New Jersey to maintain motor vehicle liability insurance coverage for at least the statutory minimum. (April 17, 2013)

In Strauss Painting Inc. v. Mt. Hawley Ins. Co., the New York Supreme Court, Appellate Division addressed whether Mt. Hawley was obligated to defend and indemnify the Metropolitan Opera Association, Inc. (the Met) and whether Mt. Hawley timely disclaimed coverage to the Met on the basis of late notice. The court upheld the lower court’s decision granting the Met’s summary judgment motion because plaintiff’s commercial general liability insurance policy from Mt. Hawley contained an additional insured endorsement covering the Met and further held that Mt. Hawley’s letters to the Met were insufficient to disclaim coverage. (April 11, 2013)

In Seneca Ins. Co. v. Cimran Co., Inc., the New York Supreme Court, Appellate Division addressed whether plaintiff had a duty to defend and indemnify defendants in an underlying personal injury action when the commercial general liability insurance policy did not cover the portion of the property on which the accident occurred.  The court held that if a policy insures only one portion of a building, it does not cover an injury occurring in another portion of the building.(April 9, 2013)

In GMAC Mortgage v. First American Title Insurance Company, the Supreme Judicial Court of Massachusetts addressed two certified questions from the Federal District Court for the District of Massachusetts regarding the duty to defend under a standard title issuance policy: (1) does the insurer have a duty to defend the insured against all covered and uncovered claims in the action; and (2) when a title insurance contract gives the insurer the right to engage in litigation to cure a defect covered by the policy, does an insurer initiating litigation have a duty to defend the insured against all reasonably foreseeable counterclaims? The court answered no to both questions.  Although the general rule in Massachusetts in the general liability insurance context is that an insurer must defend the entire lawsuit if it has a duty to defend any of the underlying counts in the complaint (in for one in for all), the court held that the rule does not apply in the unique title insurance context.  On the second question, the court was unwilling to impose a complete defense obligation on insurers, but left open the question of whether the duty to defend would extend to compulsory counterclaims asserted in response to litigation initiated by a title insurer. (April 4, 2013)

In Metropolitan Life Insurance Co. v. Cotter, the Supreme Judicial Court of Massachusetts addressed an issue of first impression of whether the appropriate care clause of a disability policy requires an insured to obtain medically appropriate treatment to return to his previous occupation.  The court held that an insured is not entitled to disability benefits when he fails to obtain the care needed to return to his previous occupation, even if he obtains care appropriate to the condition in general. (March 15, 2013)

In Huston v. Geico General Ins., the Superior Court of Pennsylvania held that a limited tort insured driver was not permitted to recover non-economic damages from his own insurance carrier as a matter of law, despite being injured by an uninsured drunk driver.  The court held that the Motor Vehicle Financial Responsibility Law’s limited tort exceptions did not apply to uninsured/underinsured motorist coverage. (February 22, 2013)

In Herd Chiropractic Clinic, P.C. v. State Farm Mutual Automobile Insurance Company, the Supreme Court of Pennsylvania addressed the sustainability of an award of attorneys’ fees against an insurance company under the peer-review provisions of the Motor Vehicle Financial Responsibility Law. The court held that the statutory fee-shifting requirement pertaining to non-peer reviewed denials does not extend to provider challenges to peer-review determinations. (February 20, 2013)

In Rother v. Erie Insurance Exchange, the Superior Court of Pennsylvania addressed whether the regular use exclusion applied to an uninsured individual who used his father’s car but sought coverage under his mother’s personal vehicle policy.  The court held that, even though the son only used his father’s car for commuting to work and emergencies, such use was considered regular use in the context of a personal vehicle. (October 18, 2012)

In Audubon Hill South Condominium Association v. Community Association Underwriters of America, Inc., the Appeals Court of Massachusetts addressed whether a subsidence of a concrete slab over a six month period qualified as a “collapse,” which was covered by inclusion as a specified risk. The court noted that the policy definition of collapse included the term “abrupt” and then a subsidence over a six month period was not a collapse under the meaning of the policy. (September 20, 2012)

In Intel Corporation v. American Guarantee & Liability Insurance Co., the Supreme Court of Delaware addressed the exhaustion requirements of an excess insurance policy under California law.  Intel argued that American Guarantee & Liability Insurance Co. (AGLI) was required to reimburse Intel for defense costs or indemnity claims in connection with Intel’s defense of various antitrust lawsuits because the AGLI policy allowed Intel to exhaust the limits of its underlying policy with XL Insurance Company by adding Intel’s own contributed payments for defense costs to the amount of Intel’s settlement with XL. The court disagreed and held that language requiring the exhaustion of the XL policy by “payments of judgments or settlements” does not encompass Intel’s own contributed payments for defense costs. (September 7, 2012)

In Cable Mills, LLC v. Coakley Pierpan Dolan and Collins Insurance Agency, Inc., the Appeals Court of Massachusetts addressed an exclusion in a commercial property and general liability policy excluding coverage for independent contractors. While the injured engineer was not a direct subcontractor of the insured, he was a subcontractor to the architectural firm. This relationship rendered the engineer a subcontractor performing “operations performed for” the insured, within the plain meaning of the exclusion. (September 11, 2012)

In McLaughlin v. Berkshire Life Insurance Company of America, the Appeals Court of Massachusetts addressed whether disability insurance covered only total disability from both of plaintiff’s occupations as a chiropractor and as a nurse, or whether the insurance was triggered by a thumb injury that precluded chiropractic work but permitted nursing work.  The court determined that because the policy had listed “chiropractor” as the sole occupation of the insured, the policy could reasonably be read as insuring against disability that prevented chiropractic work and, because of the ambiguity, construed the policy for the insured.  (August 23, 2012)

In Bole v. Erie Insurance Exchange, the Supreme Court of Pennsylvania addressed whether superseding causes prevented recovery under the rescue doctrine for a volunteer firefighter who sustained injuries on his own property on route to the fire station in response to a crash by an underinsured motorist.  The court held that although it was foreseeable  a rescuer may be injured during an attempt to render assistance, it was not foreseeable that a bridge on the rescuer’s property would collapse and cause injury to the rescuer. These injuries were a result of a superseding cause, and are not recoverable. (August 20, 2012)

In Ship v. The Phoenix Insurance Company d/b/a The Travelers, the Superior Court of Pennsylvania addressed whether the insurer was compelled, pursuant to 75 Pa.C.S.A. §1738, to obtain a second waiver of stacked uninsured/underinsured (UM/UIM) coverage limits when the insured replaced an existing vehicle with a new vehicle under the same auto insurance policy. The court held that, since no new insurance coverage was purchased, the insurer was not required to re-obtain a waiver of stacked coverage from the insured. (August 14, 2012)

In Freedman v. United States Liability Insurance Company, the Appeals Court of Massachusetts addressed whether a liability insurer had a duty to defend a landlord against a emotional distress claim where the policy covered only claims of “bodily injury.” The court determined that evidence of threats and harassment do not put an insurer on notice that a claim of bodily injury is presented, and that the insurer properly determined that it had no duty to defend. (August 8, 2012)

In Post v. Travelers Insurance Co., the United States Court of Appeals for the Third Circuit addressed bad faith and breach of contract claims brought by an attorney against his malpractice insurer when the insurer refused to cover the attorney’s countersuit against his former client. The court held that the insurer did not lack a reasonable basis to deny coverage because coverage did not include any sanctions proceedings. (July 31, 2012)

In Liberty Mut. Ins. Co. v. Sweeney, the United States Court of Appeals for the Third Circuit addressed an insurance carrier’s denial of coverage on the basis of three provisions contained in a personal auto policy. The first, an “auto business” exclusion, was rejected by the court because the vehicle involved in the accident was a non-owned auto being used for a personal errand. The second, an “intended use” provision, could not form the basis of denial because the carrier failed to put forth any evidence that the owner of the vehicle did not intend for the driver to use the vehicle for personal errands. The third, a “regular use” exclusion, was similarly rejected because the use of the vehicle was limited, conditional, and infrequent. The court accordingly reversed the District Court’s decision denying coverage. (August 2, 2012)

In Nationwide Life Insurance Company v. Commonwealth Land Title, the United States Court of Appeals for the Third Circuit examined the American Land Title Association 9 Endorsement (the ALTA 9 Endorsement), with particular emphasis on the language of section 1(b)(2).  The court held the ALTA 9 Endorsement provides coverage to losses arising from entire instruments that fit within its plain language, not just the 1(b)(2) restrictions within those instruments that have not been expressly excepted. (July 24, 2012)

In Surabian Realty Co., Inc. vs. NGM Insurance Company, the Supreme Judicial Court of Massachusetts addressed whether an insurance contract that excluded surface water, but covered “water that backs up or overflows from a sewer, drain or sump” covered flood damage to the ground level of a building caused by water from a parking lot where the water was a combination of water from a backed up drain and surface water. The court held that the anti-concurrent cause provision in the contract  was controlled and that causation in part by surface water precluded coverage. (July 12, 2012)

In Gubbiotti and Pavinski v. Santey, the Superior Court of Pennsylvania addressed whether a personal injury plaintiff may pursue an action for damages against a bankrupt defendant’s motor vehicle insurance policy where the plaintiff was named as creditor and placed on notice of the bankruptcy petition, but entered no objection in the bankruptcy proceeding. The court held that the plaintiff’s failure to object to the discharge of its personal injury claims in the bankruptcy proceeding barred any claim against the defendant or his insurance policy. (June 26, 2012)

In Memorial Properties, LLC v. Zurich American Insurance Company, the Supreme Court of New Jersey addressed an insurance coverage dispute arising out of a claim for the illegal harvesting of human remains. The owners of a cemetery sought to compel their insurance carriers to defend and indemnify them for lawsuits brought by family members of decedents whose bones and organs were harvested for commercial sale. The court held that the insurance carriers properly denied coverage because the occurrence fell outside of the policy period and there was a policy exclusion which disclaimed coverage for criminal acts. (June 28, 2012)

In Progressive Northern Insurance Company v. William J. Mohr, the Supreme Court of Delaware considered as a matter of first impression whether, under Delaware’s automobile insurance statute, an automobile insurer must provide personal injury protection (PIP) coverage to a pedestrian insured in Delaware who was struck by an automobile that was also insured in Delaware. The court held that the statute must be construed to mandate PIP coverage of insured pedestrians struck in Delaware by Delaware insured vehicles. (June 21, 2012)

In Miller v. Poole, the Superior Court of Pennsylvania addressed whether a homeowner’s policy that covered the insured’s “resident” relatives who were “residing” in the insured’s “household,” would cover a loss due to the negligence of the insured’s grandson. The grandson began staying at the property the night before the insured’s death and continued living there until the date of the loss. The court determined that terms of the insurance contract were ambiguous and that such ambiguous language is to be defined based on its common-law meaning and construed in favor of the insured. (June 4, 2012)

In Boazova v. Safety Insurance Company, the Supreme Judicial Court of Massachusetts addressed whether an insured homeowner was entitled to recover under an insurance policy that insured damage from hidden seepage, but excluded surface water damage, and which contained an anti-concurrent cause provision. The court noted that Massachusetts has no public policy against enforcing anti-concurrent cause provisions, and concluded that the insurer was not obligated to provide coverage where the surface water was a direct or indirect cause of the damage. (May 29, 2012)

In Witkowski v. Richard W. Endlar Insurance Agency, Inc., the Appeals Court of Massachusetts addressed whether a misrepresentation claim could be brought against a condominium’s insurer who furnished a certificate of insurance to a basement unit owner representing that the condominium master policy for floor insurance covered his unit, where the flood insurance excluded basement units from coverage. The court held that it was a question of fact for a jury whether the certificate contained false representations and whether the plaintiff relied to his detriment on those representations. (May 29, 2012)

In Khandelwal v. Zurich Ins. Co., the Superior Court of New Jersey, Appellate Division addressed whether the “intra-family exclusion” of a Supplemental Liability Insurance policy purchased from a car rental agency precluded coverage for claims resulting from injuries sustained by the insured and his family members. The court held that because New Jersey courts have consistently held that intra-family exclusions are not permitted in the context of an automobile insurance policy, and because the terms of the policy automatically amend the policy to comply with New Jersey law, the plaintiffs’ claims were covered by the policy. (May 29, 2012)

In Corbin v. Khosla, the Supreme Court of Pennsylvania addressed whether an uninsured driver can sue an insured driver in tort for economic damages for injuries sustained in a motor vehicle accident. In its opinion, the court examined the tension in the Motor Vehicle Financial responsibility Law (MVFRL) and Pennsylvania precedent. The court held that Section 1714 of the MVFRL does not preclude an uninsured motorist from recovering economic damages in tort from an alleged third-party tortfeasor under the tortfeasor's liability coverage. (February 21, 2012)

In Allstate Property & Casualty Insurance Co. v. Squires, the United States Court of Appeals for the Third Circuit addressed a denial of uninsured motorist benefits under the Pennsylvania Motor Vehicle Financial Responsibility Law where the plaintiff was injured in a one-vehicle accident as he swerved to avoid a box in the road. The carrier had determined that the accident did not arise out of the ownership, maintenance, or use of an uninsured automobile, but, rather, the box. The court disagreed, predicting that the Supreme Court of Pennsylvania would hold that the accident, caused by a box dropped from an unidentified vehicle, arose out of the ownership, maintenance, or use of an uninsured automobile. (January 26, 2012)

In Jackson v. Repossession Specialists, Inc., the Superior Court of New Jersey addressed whether an entity that repossesses an automobile is insured under a personal automobile insurance policy that extends coverage to those who use the automobile with the policyholder’s permission.  Because repossession constitutes use “as of right” and not “with permission,” the court held that a repossessor is not a permitted user under the terms of an insurance policy. (January 12, 2012)

In Portside Investors, L.P. v. Northern Insurance Company of New York, the Superior Court of Pennsylvania agreed that an insurer did not act in bad faith by insisting on an examination under oath of a recently indicted principal as to his pre-collapse knowledge of the pier’s underwater decay where coverage hinged upon whether “decay” was “hidden decay”.  A grand jury presentment found that the principal knew that the pier required considerable maintenance as far back as 1995 and had learned the pier was in imminent danger of collapse at least two days before collapse occurred. Separately, it agreed that the insureds presented sufficient evidence of actual cash value (ACV) when their consultant calculated ACV of the fallen pier in accordance with the equation of ACV appearing in the insurance policy.  Finally, the court held that while the insureds were entitled to pre-judgment interest, they were not entitled to interest due to a delay in the litigation following a stay to accommodate criminal proceedings. (November 23, 2011)

In American Automobile Insurance Company v. Murray, the United States Court of Appeals for the Third Circuit considered a professional liability suit filed by a beer distributor regarding its insurance agent’s failure to provide liquor liability insurance after the agent’s insurer refused coverage.  The court held that there was no coverage under the policy because the agent’s failure to provide the coverage did not occur wholly after the policy’s effective date. (September 7, 2011)

In Penn-America Insurance Company v. Peccadillos, Inc., the Superior Court of Pennsylvania addressed whether allegations that the insured ejected a bar patron from the premises when it knew or should have known that the intoxicated patron could not safely operate a motor vehicle fell within the commercial general liability policy’s liquor liability exclusion.  The court held that the exclusion did not absolve the carrier from its duty to defend the action because the premises liability allegations in the complaint were separate and distinct from the service of alcohol.

In Triarsi v. BSC Group Services, LLC, the Superior Court of New Jersey, Appellate Division, addressed whether an Affidavit of Merit was required in an action by an estate’s trustee against a life insurance broker where the life insurance policy in question had been cancelled based on a failure to pay premiums.  The court held that an Affidavit of Merit was required for claims based on a breach of fiduciary duty and breach of a professional duty.  However, an Affidavit of Merit was not required to support “special relationship” claims.  The court further held that, where a party consciously decides not to obtain an Affidavit of Merit based on the mistaken belief that it is unnecessary, the trial court’s failure to hold a Ferreira conference will not excuse the party’s failure to comply with the Affidavit of Merit requirement.  Finally, the court held that a party is not relieved of its requirement to file an Affidavit of Merit under the “extraordinary circumstances” exception when the party contends that a Ferreira conference would have enlightened it to the need for a Affidavit of Merit. (July 26, 2011)

In Government Employees Insurance Company v. Community Options, the Superior Court of New Jersey, Appellate Division, held that an automobile insurance carrier had the right to recover PIP benefits from a carrier insuring a school bus, which otherwise did not have an obligation to maintain PIP coverage. (June 29, 2011)

In Duddy v. GEICO, the Superior Court of New Jersey, Appellate Division, addressed the interplay of two clauses in a personal automobile insurance policy, one affording coverage for theft and the other excluding a loss for the sale of the insured vehicle. The court held that there was coverage because the transaction at issue fit within the common understanding of the term "theft." (July 1, 2011) 

In Petty v. Hospital Service Assoc. of Northeastern Pennsylvania, the Supreme Court of Pennsylvania addressed the issue of whether members of a putative class action lacked standing to challenge the defendant insurer's violations of a Nonprofit Law pursuant to Pa.C.S. § 5793(a). The court held that the plaintiffs lacked standing because they lacked the necessary characteristics as defined by the statute and required by the Legislature. (June 20, 2011)

In Wood v. New Jersey Manufacturers Insurance Co., the Supreme Court of New Jersey addressed the issue of whether the right to a jury trial attaches to bad faith actions. The court held that the right to a jury trial attaches to a bad faith action against an insurer where the plaintiff in the underlying personal injury action obtained an excess verdict and then sought to enforce the amount of the entire judgment against the insurer. (June 14, 2011)

In Rhodes v. USAA Casualty Insurance Co., the Superior Court of Pennsylvania addressed the impact of the conduct of an insured party bringing a bad faith claim, and the discoverability of the insured's attorney's file in the underlying underinsured motorist (UIM) claim. The court stated that the relevant inquiry in a bad faith case is whether the insurer had a reasonable basis for its conduct so the conduct of the insured is largely irrelevant. Based on this, the court held that the insured's attorney's UIM files were not discoverable. (May 17, 2011)

In Insurance Commissioner of Delaware v. Sun Life Assurance Company, the Supreme Court of Delaware addressed whether, for tax purposes, an insurance company may treat separate insurance policies as one unitary "case" under § 702 of the Delaware Insurance Code. The court noted that the statutory definition of a "case" includes all policies issued through "a private placement," and that the policies at issue were individually made thought distinct private placements. Therefore, the court held that an insurance company may not treat policies made through distinct private placements as one unitary case. (May 13, 2011)

In Sivakoff v. Nationwide Mutual Ins. Co., the Supreme Court of Delaware considered whether the Superior Court erred in concluding that the definition of an "underinsured motor vehicle" in the Nationwide insurance policy at issue provided the plaintiff with the same coverage as Delaware's Underinsured Motorist (UIM) statute. The court determined that Nationwide had no obligation to make any payment to the plaintiff where the plaintiff had not exhausted all insurance policies available to her. (May 16, 2011)

In Eckman v. Erie Insurance Exchange, the Superior Court of Pennsylvania addressed whether injunctive relief is appropriate where an insurer refuses to pay for an attorney selected by an insured. The court held that injunctive relief was not appropriate because the insured could not meet any of the six factors for injunctive relief. This failure included an inability to demonstrate that the insured would prevail on the merits because there is no law supporting the insured's position that an attorney selected by an insurer under a reservation of rights will have an inherent conflict. (April 25, 2011)

In ConAgra Foods, Inc. v. Lexington Ins. Co., the Supreme Court of Delaware addressed whether the insured exhausted its self-insured limit and its insurer's duty to defend was triggered under a "lot or batch" provision for salmonella claims related to the production of the insured's peanut butter. The Court determined that the "lot or batch" provision was ambiguous because there was more than one reasonable interpretation and remanded the case to the superior court to determine if there is coverage. (April 28, 2011)

In Nationwide Mutual Ins. Co. v. Catalina, the Superior Court of Pennsylvania addressed whether an insurance company is obligated to provide underinsured motorist coverage (UIM) in the same amount as bodily injury coverage, and whether the insurance company must obtain a formal election of UIM coverage upon a change in bodily injury coverage. The court held that the Motor Vehicle Financial Responsibility Law does not require an insurer to comply with Sections 1731 and 1734 following a change in liability limits. The carrier was not obligated to obtain a formal election of UIM coverage at the time the insured elected to alter his liability coverage because the insured did not ask to alter his UIM coverage. (March 25, 2011)

In State Farm Mutual Automobile Insurance Company v. Enrique, the Supreme Court of Delaware addressed whether an award of prejudgment interest may bring a total award in excess of uninsured motorist policy limits. Because prejudgment interest does not constitute an element of damages, the court held that it may bring a total award in excess of policy limits. (March 22, 2011)

In Orsag v. Farmers New Century Ins., the Supreme Court of Pennsylvania addressed the writing requirement of Section 1734 of Pennsylvania's Motor Vehicle Financial Responsibility Law (MVFRL) when it considered whether an insured's signature of an insurance application that contains lowered uninsured/underinsured motorist coverage limits was alone sufficient to meet the requirements of MVFRL. The court held that Section 1734 is plain and unambiguous, and the writing requirement is satisfied by the insured's signature on the application. (March 14, 2011)

In AMB Property, LP v. Penn America Insurance Company, the Superior Court of New Jersey, Appellate Division, addressed, among other issues, whether a premium finance company acting as an insured's attorney-in-fact had the authority to cancel the insured's policy based on non-payment. The court held that the power of attorney granted under the statutory authority of the Insurance Premium Finance Company Act (IPFCA) empowered the premium finance company to cancel the policy even though the power of attorney failed to satisfy the general requirements of New Jersey's power of attorney law. (February 14, 2011)

In Ohio Casualty Insurance Company v. Island Pool & Spa, Inc., the Superior Court of New Jersey, Appellate Division, addressed an issue of first impression in New Jersey regarding an "ongoing operations" exclusion in a Comprehensive General Liability (CGL) insurance policy. The court held that the exclusion applied to bar coverage for damage caused by a pool maintenance company's draining of a home swimming pool before repainting it. The court reasoned that the damage occurred while the insured was working on the repainting project, even though the work being performed was collateral to the actual painting of the pool. (February 10, 2011)

In Campbell v. State Farm, the Supreme Court of Delaware addressed whether a pedestrian was entitled to Personal Injury Protection (PIP) benefits under a driver's automobile insurance policy after being struck by a garage door that was closed when the driver by pressed a button inside his vehicle. The court held that the pedestrian was not entitled to PIP benefits because the vehicle was not an active accessory in causing her injuries. (January 18, 2011)

In Perez v. Farmers Mutual First Ins. Company, the Superior Court of New Jersey, Appellate Division, addressed whether a fifteen-passenger van owned by a church fits the definition of an "automobile" under N.J.S.A. 39:6A-2(a) such that the van's insurer would be required to provide coverage for personal injury protection (PIP) benefits. The court held that such a van is not a covered "automobile" because: 1) it is not used primarily as a private passenger vehicle; and 2) it does not satisfy the requirement that a van be owned by an individual or by a husband and wife of the same household. (January 11, 2011)

In Richner v. Erie Insurance Group, the Superior Court of Pennsylvania addressed two issues: 1) in a matter of first impression, whether an order overruling preliminary objections that assert the pendency of a prior pending action is a collateral order under Rule 313 of the Pennsylvania Rules of Appellate Procedure; and, 2) whether declaratory judgment claims against an insurer that provided underinsured motorist (UIM) benefits could be joined in a third-party tort case. On the collateral order issue, the court held that the order was appealable because it was separable from and collateral to the main cause of action; involved a right that was too important to be denied review, and presented a claim that would have been irreparably lost if review was postponed until final judgment in the case. As to the joinder issue, the court held that the declaratory judgment action could not be joined because the claims were fundamentally different and required different proofs. (January 6, 2011)

In Wood v. New Jersey Manufacturers Ins. Co., the Supreme Court of New Jersey granted a Petition for Certification of Appeal to address the following question: "Is there a right to a jury trial on a bad faith claim against an insurer under Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474 (1974)?" (December 10, 2010)

In Marlette v. State Farm Mutual Automobile Insurance Company, the Superior Court of Pennsylvania considered the following issues: 1) whether an insurer can be obligated to pay delay damages in excess of its policy limits; and 2) whether delay damages are calculated based on a jury's award or on the recoverable policy limit. The court held that, under Pennsylvania law, an insurer may be held liable for delay damages in excess of its policy limits. In addition, the court held that delay damages should be calculated based on the amount awarded by the jury. (December 10, 2010)

In Castillo v. Clearwater Insurance Company, the Supreme Court of Delaware addressed a claim for uninsured/underinsured (UM/UIM) motorist benefits and the validity of an endorsement in a non-trucking automobile liability insurance policy that excluded coverage for the transportation of property for commercial benefit. In discussing the validity of the endorsement, the court clarified and reinforced its prior case law interpreting Delaware's UM/UIM statute, 18 Del. C. § 3902, stating:

1. UM/UIM is mandatory for all vehicles registered in Delaware, unless rejected in writing;
2. Policy provisions that reduce or eliminate UM/UIM coverage are void, unless the exclusion is specifically authorized; and
3. UM/UIM is personal to the insured and not dependent on the vehicle the insured was occupying when he or she was insured.

In addition, the court held that because the General Assembly has not specifically authorized an exclusion for transporting business property and the insured did not reject UM/UIM coverage in writing, the exclusion in the policy was invalid. (November 22, 2010)

In State Farm Mutual Automobile Insurance Company v. Patterson, the Supreme Court of Delaware addressed whether a Delaware resident could recover uninsured motorist benefits under Delaware law where the accident occurred in New Jersey, and New Jersey law precluded recovery. Because Delaware had the most significant relationship to the case (based on the plaintiff's residence and the policy's issuance in Delaware, among other factors), the court held that Delaware law applied and the plaintiff could recover. (November 8, 2010)

In American Legacy Foundation v. Nat'l Union Fire Ins. Co., et al, the United States Court of Appeals for the Third Circuit affirmed the ruling of the United States District Court for the District of Delaware that the American Legacy Foundation-the organization that created "the truth" advertising campaign about the dangers of tobacco products-had no applicable insurance coverage under multiple CGL policies, an I&O policy, and an umbrella policy. In so doing, the Third Circuit addressed different coverages for breach of contract and tort claims and the distinction between requests for a defense and requests for the advancement of defense costs. (October 12, 2010)

In Boyle v. Independent Lift Truck, Inc., the Supreme Court of Pennsylvania addressed whether a new trial should be ordered in a case where the trial court included an allegedly improper question about comparative negligence on the jury verdict sheet, but the jury never reached the comparative negligence issue. The court held that where a jury finds no negligence on the part of a defendant, alleged errors regarding questions of comparative or contributory negligence are not prejudicial, and cannot serve as the basis for the award of a new trial. (September 29, 2010)

In Arthur Anderson LLP v. Federal Ins. Co., the Superior Court of New Jersey, Appellate Division, addressed the plaintiff's claim that $204 million in business losses suffered after the September 11, 2001 attacks was a covered loss under its all-risk commercial property insurance policy. The plaintiff, who did not suffer any property damage in the attacks, alleged that the attacks caused property damage to the World Trade Center and the Pentagon, which in turn caused an economic downturn that caused the plaintiff to lose $204 million in revenue. The court held that the plaintiff failed to establish that the loss of revenue was caused by the property damage to the World Trade Center and the Pentagon because the plaintiff could not identify any client that was prevented from accepting or receiving the plaintiff's services due to property damage caused by the attacks. Moreover, the court held that the plaintiff did not have an insurable interest in the property damage at the World Trade Center and the Pentagon because there was no cognizable relationship between the insured and the properties that would provide a basis for the insured to derive a direct pecuniary benefit from the properties. (September 30, 2010) 

The Supreme Court of New Jersey, in Abouzaid v. Mansard Gardens Assoc., granted a Petition for Certification of Appeal to address a coverage question related to a commercial general liability insurance policy. The question the court agreed to consider is: "Does this commercial general liability insurance policy require the insurer to provide a litigation defense to an insured who was sued for emotional distress under Portee v. Jaffee, 84 N.J. 88 (1980), where the Portee claim does not allege physical injury to the plaintiff?" (September 10, 2010) 

In Banaszak v. Progressive Direct Insurance Company, the Supreme Court of Delaware addressed the interplay between the written uninsured (UM) motorist rejection requirement in 18 Del. C. § 3902(a) and the supplemental uninsured/underinsured (UM/UIM) motorist coverage disclosure requirement in 18 Del. C. § 3902(b). Reading the statutes together, the court found that an insurer must: (1) not deliver any insurance policy without the minimum uninsured coverage, unless rejected by the insured in writing; and (2) make a meaningful offer of supplemental UM/UIM coverage up to the limits of the insured's bodily injury liability insurance. In this case, Progressive's offer form was pre-filled by Progressive's agent's noting a rejection of UM/UIM coverage. Although the insured signed, dated, and returned the form, the court found that Progressive failed to demonstrate that it made a meaningful offer of supplemental UIM coverage to the insured. Thus, the court remanded the case and ordered that the policy be reformed to increase the insured's UIM coverage to his bodily injury liability limits. (September 3, 2010)

In Cupido v. Perez, the Superior Court of New Jersey, Appellate Division, addressed the scope of the "limitation on lawsuit" threshold, which precludes an individual from suing a tortfeasor for non-economic damages unless he or she suffers a serious or permanent bodily injury. The court held that a plaintiff is subject to the "limitation on lawsuit" threshold where his or her automobile insurance company, even though not authorized to transact business in New Jersey, controls affiliates that are authorized to transact commercial motor vehicle business in the state. (August 27, 2010)

In Telecommunications Network Design & Paradise Distributing, Inc. v. The Brethren Mutual Ins. Co., the Superior Court of Pennsylvania reviewed whether the defendant-insurer had a duty to defend under the "advertising injury" clause in the insured's underlying policies in a case where the insured transmitted over one million unsolicited advertising faxes that were alleged to be in violation of the Telephone Consumer Protection Act. The Superior Court affirmed the decision of the trial court and held that the defendant-insurer did not have a duty to defend under the "advertising injury" clause in the policies because an "advertising injury" refers to the content of the materials, but the complaint at issue focused on the monetary costs caused by the depletion of resources that resulted from the unauthorized faxes, which addresses a different privacy concern: the right to be left alone. (August 23, 2010)

In American & Foreign Insurance Company v. Jerry's Sport Center, Inc., the Supreme Court of Pennsylvania ruled, unanimously, "that an insurer may not obtain reimbursement of defense costs for a claim which a court later determines there was no duty to defend, even where the insurer attempted to claim a right of reimbursement in a series of reservation of rights letters." (emphasis added). Noting that a duty to defend is broader than a duty to indemnify, the Supreme Court held that an insurer is obligated to defend an insured if the factual allegations of the complaint, on its face, encompass an injury that is actually or potentially within the scope of the policy. According to the court, it is the potential, rather than the certainty, of a claim falling within the insurance policy that triggers the insurer's duty to defend. Further, an insurer may not justifiably refuse to defend against a claim unless it is clear from an examination of the policy and the complaint that the claim does not potentially fall within the coverage of the policy. (August 17, 2010)

In Government Employees Insurance Co. v. Ayers, the Supreme Court of Pennsylvania granted a Petition for Allowance of Appeal to consider the following question: "Does the application of a household vehicle exclusion violate Section 1738 of the Motor Vehicle Financial Responsibility Law (MVFRL), where the same insurance company insures all vehicles owned by an insured, and where the exclusion denies inter-policy stacking to the insured who has paid for stacking and has not executed a stacking waiver?"
(July 27, 2010)

In Myron Corp. v. Atlantic Mutual Ins. Corp., the Supreme Court of New Jersey addressed an appeal from an order denying the plaintiff's application for counsel fees from its insurer pursuant to Rule 4:42-9(a)(6). Although the insurer claimed that the insured could not recover for fees associated with an out-of-state action, the Superior Court, Appellate Division, held that because the insured prevailed on the merits of its New Jersey coverage lawsuit, and the out-of-state action was part of the same controversy, the insured could recover its fees associated with the out-of-state action. The Supreme Court, in a per curiam decision, affirmed the judgment for the reasons set forth in the Appellate Division's decision. (July 27, 2010)

In Dixon v. GEICO, the Superior Court of Pennsylvania addressed the applicability of a "Regular Use" exclusion in a personal auto insurance policy to a post office employee who was taking a mail truck to be repaired and was in an accident. The court, finding a material issue of fact as to whether the operation of the specific vehicle constituted regular use within the meaning of the policy exclusion, vacated the entry of summary judgment in favor of GEICO. (July 29, 2010)

In Sackett v. Nationwide Mut. Ins. Co., the Pennsylvania Superior Court addressed whether an insurer has a duty to obtain a new waiver from an insured declining stacked underinsured motorist (UIM) coverage after the insured added a new vehicle to the policy. The Court held that because the insurer added the insured's new vehicle by endorsement, it was required to obtain a new waiver declining stacked UIM coverage. Because the insurer failed to do so, the insured was entitled to stacked coverage. (July 21, 2010)

In Passaic Valley Sewerage Commissioners v. St. Paul Fire and Marine Insurance, the Supreme Court of New Jersey granted a Petition for Certification of Appeal to consider an insurance coverage question. The question the Court will consider is: "Did the insured suffer a monetary loss that was covered under this insurance policy as a result of its agreement to provide services and equipment to a claimant in settlement?" (July 17, 2010)

In Flomerfelt v. Cadiello, the New Jersey Supreme Court addressed whether an insurer has a duty to defend and indemnify a homeowner who is sued for injuries suffered by a party guest, where the injuries may have been caused by drug use and the policy excludes coverage for claims "arising out of" controlled dangerous substances. The Court remanded the issue of whether the insurer had a duty to indemnify, holding that this issue could not be decided because the record did not contain enough evidence about the cause of the plaintiff's injuries to determine whether the ambiguous "arising out of" exclusion applied. On the duty to defend issue, the Court held that the duty continues as long as there is a potentially covered claim. Because some of the plaintiff's theories of liability did not fall within the "arising out of" exclusion, the duty to defend attached. (July 7, 2010)

In Jeffrey M. Brown Assocs., et al. v. Interstate Fire & Cas. Co., et al., the New Jersey Superior Court, Appellate Division reviewed whether an additional insured endorsement of an insurance policy issued to a subcontractor provided primary coverage to the general contractor. The Court found that the plain language of the additional insured endorsement of the subcontractor's policy stated that the coverage provided to an additional insured (such as the general contractor) "shall be excess over any other insurance," while the coverage provided under the policy issued to the general contractor was "primary." The Court relied on the "excess other-insurance clause" which is a device by which a primary insurer seeks to limit its liability where another primary policy covers the risk, thus making it secondarily liable. Where one policy has an excess other-insurance clause and another policy on the same risk does not, the former policy will not come into effect until the limits of the latter policy are exhausted. Thus, because the subcontractor's policy had an excess other-insurance clause, but the general contractor's policy did not, the subcontractor's policy did not come into effect until the limits of the general contractor's policy were exhausted. Consequently, the Court held that the additional insured coverage provided under the policy issued to the subcontractor was "excess" to any other coverage available to the general contractor, an additional insured. (June 23, 2010)

In Ross v. Foremost Ins. Co. and Sentry Serv., Inc., the Superior Court of Pennsylvania addressed, among other things, whether the release of the principal (Foremost) acted as a release of the agent (Sentry). In this case, the plaintiff filed an insurance claim after his trailer was damaged in a flood. Foremost denied the plaintiff's claim because his policy did not provide flood insurance. After the suit was filed, the plaintiff settled with Foremost and signed a release. The court held that even though the agent (Sentry) may have been acting as an agent for the principal (Foremost), the release of the principal did not release the agent because the release expressly reflected the plaintiff's reservation of rights against the agent. (June 11, 2010)

In Sierfeld v. Sierfeld, et. al. the Superior Court of New Jersey, Appellate Division, addressed coverage questions related to a homeowners insurance policy. In this case, the 25-year-old daughter of the homeowners, who recently lost her job and moved back home with her parents, sought compensation under an Allstate Insurance Company policy after suffering a dog bite by the family pet. The central issue addressed by the court was an exclusion provision in the policy that excluded from coverage injuries to "residents" of the "household." According to the court, whether or not a relative of a named insured is a resident of that insured's household must be decided on a case-by-case basis. Courts must determine whether the insured and the relative seeking coverage share a "substantially integrated family relationship." Although the plaintiff did not socialize with her parents or share meals with them, the court held that she had a substantially integrated family relationship with her parents because: 1) she enjoyed a relationship with her parents as a family member; 2) she did not have a rental agreement or contribute to household expenses; 3) she had no set plan to move; 4) she had common use of the bathroom, kitchen, and laundry room; and 5) her driver's license listed her parents' address. Consequently, the Appellate Division affirmed the trial court's decision granting summary judgment in favor of Allstate, and dismissing the plaintiff's declaratory judgment action. (April 23, 2010; approved for publication on June 15, 2010)

In Specialty Surfaces International, Inc. d/b/a Sprinturf, Inc. v. Continental Casualty Co., the United States Court of Appeals for the Third Circuit addressed whether Continental had a duty to defend Sprinturf in a lawsuit filed in the Superior Court of California. According to the allegations, a California high school district contracted with a general contractor for the construction and installation of synthetic turf football fields at four district schools. The contractor hired a subcontractor to install turf manufactured by Specialty Surfaces and a drainage system installed by Empire, a wholly-owned subsidiary of Specialty Surfaces. Within one year of installation, the turf began to exhibit defects in materials and workmanship, and experienced failures in its draining system. The school district alleged that Empire's negligence led to the damage to the turf. The School district further alleged that Specialty Surfaces and Empire breached the terms of the warranty agreement. Subject to a reservation of rights, Continental agreed to defend Specialty Surfaces and Empire (as an additional insured), on the negligence claim only. Under the applicable insurance policy, Continental would pay damages because of "property damage" only if the "property damage" was caused by an "occurrence." The District Court granted summary judgment in favor of Continental, concluding that all of the claims in the school district's suit were based on "allegations of faulty workmanship and failure to comply with the contract documents, which are not accidents," and, thus, the alleged property damage had not been caused by an "occurrence." As a result, Continental had no duty to defend. The Third Circuit affirmed. The Court found that a breach of contract claim did not constitute an "occurrence" in a commercial general liability policy under Pennsylvania law. Further, relying on Millers Capital Ins. Co. v. Gambone Bros. Development Co., 941 A.2d 706 (Pa. Super. 2007), the Court determined that the allegations of negligence were claims of damage based on faulty workmanship, which damage was not "sufficiently fortuitous to constitute an 'occurrence' or 'accident,'" but was instead a foreseeable result of the faulty workmanship. (June 8, 2010)

In Devcon International Corp. v. Reliance Ins. Co., the United States Court of Appeals for the Third Circuit recently issued a decision regarding the duty to defend and indemnify in a nuisance action. In this case, the Virgin Islands airport retained a general contractor to extend the airport's runway. Shortly after construction began, large amounts of dust drifted over nearby property belonging to the plaintiffs. The dust contaminated drinking water and caused breathing and other disorders. Suit was filed alleging claims against the general contractor for nuisance, trespass, negligence, and negligent and intentional infliction of emotional distress. The contractor tendered defense of the plaintiffs' claims to Reliance which, in turn, questioned whether the applicable policy provided coverage as coverage was excluded for injuries resulting from pollution, but agreed to defend pursuant to a reservation of rights. The general contractor thereafter commenced a declaratory judgment action to ascertain Reliance's obligation to defend and indemnify. The District Court found that the pollution exclusion removed coverage for the plaintiffs' injuries and, therefore, the general contractor had no reasonable expectation of coverage. On appeal, the Third Circuit affirmed, finding that the exclusion was not ambiguous. Rather, it clearly stated that it provides no coverage when bodily injury results from airborne solids and fumes (such as those alleged in the underlying action) "at any time," and the exclusion contained no language limiting its scope. (June 8, 2010)

In Aronberg v. Tolbert, et al., the Superior Court of New Jersey addressed whether N.J.S.A. 39:6A-4.5(a), which bars uninsured drivers from suing for personal injuries sustained in automobile accidents, applies to a wrongful death action brought by the uninsured decedent's heirs. Plaintiff had insured his vehicle but, as a result of his failure to pay premiums when due, the insurance was canceled. Shortly thereafter, plaintiff was involved in a fatal motor vehicle accident. Plaintiff's mother brought an action against the other driver involved in the accident and that driver's employer, alleging a survival claim on behalf of her son and a wrongful death claim on behalf of her son's estate. Defendants' summary judgment was granted in part, resulting in the dismissal of the survival claim only. The Superior Court affirmed the lower court's holding. The Superior Court explained that with regard to the survival action-which permits a decedent's estate to pursue any cause of action that the decedent would have had if he had survived-the plaintiff would have been statutorily barred from asserting a cause of action for losses sustained in the accident if he lived because the plaintiff was driving his uninsured vehicle at the time of the accident. With regard to the wrongful death action, however, the Superior Court clarified that such an action compensates the survivors of the decedent for their losses, and does not accrue to the decedent. As a result, the Court declined to apply the statutory bar to the wrongful death action. (June 8, 2010)

In Travelers v. Insurance Co. of North America, the United States Court of Appeals for the Third Circuit recently issued a decision regarding, inter alia, whether the plaintiffs' award of prejudgment interest (or "delay damages") should be calculated according to Pennsylvania law under Pa.R.C.P. 238, or a higher rate pursuant to New York law. The District Court concluded that, even though the parties agreed New York law governed the reinsurance contracts at issue in the case, Pennsylvania law governed the calculation of prejudgment interest on the damages awarded to the plaintiff. The District Court reasoned that the law governing the calculation of prejudgment interest in Pennsylvania contract actions is procedural, rather than substantive, for choice-of-law purposes. The Third Circuit disagreed, and noted that Pennsylvania's delay damages or prejudgment interest rule serves a primarily substantive role in contracts. In tort cases, the delay damages rules serves a procedural purpose (combating the backlog in the courts) in a manner that incidentally affects the substantive right to be compensated for the loss of the use of one's money. However, the Third Circuit reasoned that rules that govern prejudgment interest do the reverse in contract actions, and serve a compensatory purpose in a manner that only incidentally affects the number of cases that go to trial. Therefore, the Third Circuit held that Pennsylvania law governing the calculation of prejudgment interest in contract actions is substantive, and that prejudgment interest should have been calculated under the New York rate. (June 9, 2010)

In Taddei v. State Farm Indemnity Co., the Supreme Court of New Jersey granted a Petition for Certification of Appeal to address the following question: "Where plaintiff's uninsured motorist claim proceeds to verdict against the tortfeasor, is plaintiff barred on entire controversy grounds from filing a subsequent complaint against the insurer alleging bad faith in not settling plaintiff's claim?" (April 22, 2010) 

In Axis Reinsurance Co., et. al. v. HLTH Corp., et. al., the Supreme Court of Delaware, considered consolidated appeals by HLTH Corporation and Emdeon Practice Services (collectively referred to as Plaintiffs) and its insurers. The appeals related to the applicability of exclusions in a tower of insurance, the "Emdeon Tower," consisting of a primary policy issued by National Union Fire Insurance Company of Pittsburgh PA (National Union), and several excess policies issued by, among others, Axis Reinsurance Company. Plaintiffs sought coverage for claims arising from a federal grand jury indictment of former officers and directors of Medical Manager Corporation "for participating in a scheme to defraud holders of Medical Manager and WebMD securities, members of the investing public and others by deliberately inflating the company's earnings and laundering money between 1997 and 2003." The parties referred to the indictment as the "Singer" action. The first appeal related to National Union's denial of coverage for the Singer action based on the Prior Acts Exclusion (PAE) in its policy. Plaintiffs argued that by adding an Amend Retention Endorsement (ARE) to the policy, National Union specifically agreed to provide coverage for the Singer action or, alternatively, that the ARE created an ambiguity in the policy that should be interpreted in the Plaintiffs' favor. The trial court found that National Union failed to demonstrate that the PAE clearly and unambiguously controlled conflicting policy language, and granted summary judgment in the Plaintiffs' favor. The Supreme Court reversed, holding that reading the PAE together with the ARE does not create an ambiguity because each has a distinct and independent purpose and function. Lawrence Bistany, a partner in White and Williams LLP's Commercial Litigation Department, assisted by associates William Doerler and Celestine Montague, secured the reversal on behalf of National Union. In the second appeal, the excess insurers denied coverage based on a Prior Notice Exclusion (PNE) in each of their policies. The trial court granted the excess carriers' motion for summary judgment after finding that the PNE in their policies expressly barred the Plaintiffs' demand for coverage because the Plaintiffs notified another tower of insurance, the "MMC Tower," several months before they notified the Emdeon Tower excess carriers. The Supreme Court affirmed the decision of the trial court, holding, among other things, that because the PNE uses unqualified, broad phrases that unambiguously permit prior notice to be given by any entity with respect to any policy, and because the Plaintiffs failed to give simultaneous notification to each insurance tower, the trial judge correctly held that the PNE bars all coverage for claims against insurers under the Emdeon Tower. (April 22, 2010)

In Homesite Insurance Co. v. Hindman, et al., the Superior Court of New Jersey, Appellate Division, addressed whether business or rental exclusions in a homeowner's policy applied in a situation where the homeowner rented a portion of the insured premises to boarders on an ongoing basis. The court held that the business exclusion, when read in tandem with the rental exclusion, was not applicable because the rental of a portion of a home is not a business. Thus, the rental exclusion controlled. The rental exclusion, however, did not apply because it had an exception permitting boarders. Because neither exclusion applied, the Appellate Division affirmed the trial court's decision granting summary judgment in the insured's favor. (April 23, 2010)

In NJ Manufacturers Ins. Co. v. Nat'l Cas. Co., the Superior Court of New Jersey, Appellate Division, addressed whether an excess insurer's conduct relating to settlement negotiations is relevant to the excess insurer's claim against a primary insurer for payment above the primary insurer's policy limits. Both the primary insurer and the excess insurer were required to pay a judgment after their insured was found liable for injuries in an automobile accident. The excess insurer claimed that the primary insurer acted in bad faith and, therefore, should be obligated to pay prejudgment interest even though that amount would bring its liability beyond its policy limits. To prepare its defense, the primary insurer sought to discover evidence of the excess insurer's conduct relating to settlement negotiations, and the excess insurer objected. The Superior Court found that, under New Jersey law, an insurer alleged to have acted in bad faith may avoid automatic liability for judgment above its policy limits if it can show: 1) there was no realistic possibility of settlement; and 2) the excess carrier would not have contributed whatever amount above the policy limit that would have been required to settle the case. The court therefore held that the excess insurer's behavior was relevant and discoverable. (April 29, 2010)

In Gonzalez v. N.J. Property Liability Insurance Guaranty Ass'n, the Superior Court of New Jersey addressed the validity of Rule 4 of the National Arbitration Forum (NAF), which requires a person injured in a car accident to demonstrate immediate and irreparable loss or damage when seeking emergent medical damages disputed by a personal injury protection insurer. Plaintiff was injured when struck by a motor vehicle. Defendant refused to pay for a spinal surgery after an independent medical examination determined that it was unwarranted and unrelated to the accident. The NAF dispute resolution professionals then denied plaintiff's request for emergent relief because, pursuant to Rule 4, there was no evidence of an immediate and irreparable harm if the surgery was not performed immediately. Although plaintiff later received the surgery, plaintiff challenged the validity of Rule 4. The Court ultimately held that Rule 4 was valid. (March 25, 2010) 

In Genaeya Corp. v. Harco National Insurance Co., the Superior Court of Pennsylvania addressed whether an insurer was required to provide a defense when its policy stated that the insurer "may elect to defend" the insured. Generally, language in an insurance policy is construed against the insurer if it is ambiguous. Harco argued that it was not required to defend Genaeya in a property damage action because the policy's language left the decision of whether to provide a defense to Harco's discretion. The trial court disagreed, and found that Harco had a duty to defend Genaeya because the "may elect to defend" language was ambiguous. The Superior Court held that the language of the policy was not ambiguous, and that Harco had the right to provide a defense if it decided to, but no duty to do so. (March 15, 2010) 

In Safe Auto Ins. Co. v. Berlin, the Superior Court of Pennsylvania considered whether a volunteer fire company was entitled to coverage under an insured's auto policy for the costs of an emergency rescue the fire company performed on behalf of the insured, who was involved in a single-car accident. After reviewing the terms of the policy, the court concluded that costs associated with emergency rescue services are not damages, losses, property damage, or even consequential damages under the policy. In rejecting the volunteer fire company's claim, the court explained that a third party is only entitled to consequential damages under the policy if it sustains bodily injury or property damage as a result of an accident with the insured. In the absence of bodily injury or property damage, the third party is not entitled to consequential damages. (March 5, 2010)

In Nordi v. Keystone Healthplan West, Inc. and Highmark, Inc., the Superior Court of Pennsylvania held that an HMO is exempt from Pennsylvania's bad faith statute by the Health Maintenance Organization Act. The appellant was denied continued coverage for treatments she was undergoing. She filed suit against the appellee HMO provider alleging bad faith, among other claims. The trial court dismissed the bad faith claim, holding that an HMO is exempt from Pennsylvania's bad faith statute. On appeal, the Superior Court affirmed. The court found that the Health Maintenance Organization Act specifically exempts HMOs from laws "relating to insurance corporations engaged in the business of insurance." (January 22, 2010)

In Orsag v. Farmers New Century Ins., the Supreme Court of Pennsylvania granted a Petition for Allowance of Appeal. The issue the court will address is stated as follows: "If an insured signs an insurance application that contains lowered uninsured/underinsured motorist coverage limits, is that signature alone sufficient to meet the requirements of Section 1734 of Pennsylvania's Motor Vehicle Financial Responsibility Law?" (December 29, 2009)

In Fletcher v. Pa Property & Casualty Ins., the Supreme Court of Pennsylvania addressed the MCARE excess coverage scheme. The question at issue was whether the appellant could seek a declaratory judgment in the Commonwealth Court as to MCARE's responsibility for excess liability and delay damages, or whether she had to first exhaust administrative remedies through the Insurance Department. The court held that the Commonwealth Court has original jurisdiction over such MCARE Fund coverage disputes. (December 15, 2009)

In State Farm Fire & Casualty Co. v. The Estate of Thomas W. Mehlman, the United States Court of Appeals for the Third Circuit was asked to decide whether an insurer is obligated to defend and indemnify under a homeowner's policy where the homeowner's drunkenness contributed to the injuries. The plaintiff in the underlying action brought suit against The Estate of Mehlman for injuries she suffered after Mr. Mehlman became intoxicated and attempted to shoot and kill the plaintiff. The relevant policies provided coverage for damages caused by an "occurrence" or "loss," both of which were defined as "accidents." The Third Circuit held that State Farm did not owe a duty to defend or indemnify The Estate in the underlying action because the harm was caused by intentional conduct. As noted by the court, insurance in Pennsylvania is not available for losses that a policyholder knows of or intends. Further, Mr. Mehlman's intoxication did not render his alleged actions - which included walking to a house with a loaded gun and attempting to shoot and kill the plaintiff - accidental. The Court concluded that, under Pennsylvania law, Mr. Mehlman's conduct was not accidental simply because he was intoxicated when he engaged in the conduct. (December 16, 2009)

In Erie Ins. Exchange v. Larrimore, the Superior Court of Pennsylvania addressed a declaratory judgment action involving a coverage question related to Section 1734 of the Motor Vehicle Financial Responsibility Law (MVFRL). The court held that, in order to conform with Section 1734, an insured's written request for uninsured motorists/underinsured motorists coverage in amounts less than the policy's bodily injury limits must be signed by the insured and contain an express designation of the amount of coverage requested. (December 8, 2009)

The Superior Court of Pennsylvania, in Bishops, Inc. v. Penn National Insurance, addressed the enforceability of a concurrent clause provision in an all-risk insurance policy. Bishops, a fabric wholesaler in Allegheny County, suffered a total loss of inventory and office equipment when water runoff backed up through the municipal drainage system during torrential rains and nearby bodies of water overflowed. Bishops subsequently filed a claim with Penn National. Penn National refused to pay any amount for physical damage to Bishops' premises and inventory. Bishops' Penn National policy provided "all risks" property damage coverage, meaning that all of the property damage suffered by Bishops would be covered under the policy if there was no applicable exclusion. The policy specifically excluded loss or damage caused directly or indirectly by flood, overflow of any body of water, and water that backs up or overflows from a sewer, drain or sump. The same policy provision stated: "Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss." However, Bishops also purchased an additional endorsement, a Pen-Pac Endorsement, which provided that Penn National would pay for loss or damage to covered property caused by a back-up from a sewer or drain, or an overflow from a sump within the building. The court held that the Pen-Pac endorsement removed the exclusion of the basic policy as a bar to coverage for damage caused by sewer and drain back-up, but made no effort to restate the concurrent cause language in the basic policy. The failure of the endorsement to restate the concurrent cause language compelled an interpretation of the provisions in favor of the insured. (November 24, 2009)

In O'Hara v. First Liberty Insurance Co., the Superior Court of Pennsylvania recently addressed the enforceability of a forum selection clause in an automobile insurance policy. The policy provided that suit by the insured against the insurer "must be brought in a court of competent jurisdiction in the county and state of your legal domicile at the time of the accident." The Superior Court held that forum selection clauses are not against Pennsylvania's public policy. In addition, the court held that because the subject language was "clear and unambiguous," the court was required to enforce the provision. (November 9, 2009)