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Elizabeth Ahlstrand
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In a recent decision, the Connecticut Supreme Court addressed, on certification from the United States District Court for the Northern District of Alabama, Southern Division, whether property damages resulting from defective or faulty workmanship in the construction of a project may constitute “property damage” resulting from an “occurrence,” thus giving rise to coverage under a Commercial General Liability insurance policy (“CGL”). Capstone Building Corp. v. American Motorists Ins. Co., 308 Conn. 760 (2013). The Court answered this question of first impression in the affirmative. Capstone stems from claims of property damage in connection with the construction of a student housing... Continue reading
Posted Aug 1, 2013 at Insurance Developments
On April 3, 2013, the Supreme Court of New York granted an insurer’s motion for summary judgment in part, declaring the insurer had no duty to defend and indemnify its insured in an underlying claim because the insurance policy did not cover the portion of the property where the accident occurred. Seneca Ins. Co. v. Cimran Co, 963 N.Y.S.2d 182 (App. Div. 1st Dep’t 2013). Following a construction accident on its property, Cimran Company (“Cimran”), filed a claim with its insurer, Seneca Insurance Company (“Seneca”). Upon receiving the claim, Seneca reserved its rights to disclaim coverage and/or rescind the policy,... Continue reading
Posted Jul 30, 2013 at Insurance Developments
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On February 7, 2013, the New Jersey General Assembly introduced the Certificates of Insurance Act (“Act”) (Assembly No. 3731). The proposed Act would apply to all certificates of insurance issued in connection with property, operations, or risks. The Act provides that a person shall not prepare, issue, request, or require the issuance of a certificate of insurance on property, operations, or risks located in this State unless: (1) the certificate of insurance form has been filed with and approved by the Commissioner of Banking and Insurance; or (2) the specific content and wording of the certificate of insurance form are... Continue reading
Posted Feb 25, 2013 at Insurance Developments
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The New York Court of Appeals recently held that a New York statute requiring health clubs to have Automatic External Defibrillator’s (AED) did not require health clubs to use the device. Miglino v. Bally Total Fitness, 2013 NY Slip Op. 00780, New York Court of Appeals Decided February 7, 2013. On March 26, 2007 Gregory Miglino (“Miglino”) collapsed at a health club owned and operated by the Bally Total Fitness (“Bally”). A Bally employee immediately called 9-1-1 and brought the club’s AED to Miglino. Two club members, a doctor and medical student performed CPR on Miglino. The AED-trained Bally employee... Continue reading
Posted Feb 22, 2013 at Insurance Developments
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On January 14, 2013, the New Jersey Supreme Court heard oral argument in Angland v. Mountain Creek Resort, A-57-11. The primary question before the Court is whether New Jersey’s ski statute, N.J.S.A. 5:13-1, et seq., (the “Ski Act”) governs liability of individual skiers. On whether snowboarder, William Brownlee’s motion for summary judgment was improperly denied, Brownlee contends that “there is no standard of care between skiers,” and that the Ski Act only applies to the relationship between the skier and the resort, not between a skier and another skier. The litigation stems from a tragic skier / snowboarder collision at... Continue reading
Posted Feb 21, 2013 at Insurance Developments
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Last month the New Jersey State Senate introduced the “Consumer Protection Act,” (S-2460), a bill that would establish a private cause of action for insureds in connection with unfair claims settlement practices; a right previously articulated by the State Supreme Court in Rova Farms Resort Inc. v. Investors Ins. Co., 65 N.J. 474 (1974). Specifically, the proposed bill would allow an insured, regardless of any action by the Commissioner of Banking and Insurance, to file a civil action against its insurer for any violation of the provisions of subsection (9) of N.J.S.A. 17:29B-4 regarding unfair claim settlement practices, notwithstanding that... Continue reading
Posted Feb 21, 2013 at Insurance Developments
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Late notice, the issue of insurer’s right to deny insurance benefits as a result of a failure to provide timely notice, continues to be a dynamic question in insurance coverage litigation. In two separate late notice cases decided on October 22, 2012, two federal courts ruled in favor of the insurer. The Eleventh Circuit, in State Farm Fire & Cas. Co. v. LeBlanc, No. 12-11637, 2012 WL 5199253 (11th Cir. October 22, 2012), applying Georgia law affirmed summary judgment in favor of State Farm Fire & Casualty Company (“State Farm”) on late notice grounds, where notice was received four months... Continue reading
Posted Nov 30, 2012 at Insurance Developments
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In Westfield Ins. Co. v. Custom Agri Sys., Inc., No. 2011-186 (Ohio 2012), the Ohio Supreme Court followed the trend among other state courts and held, that claims of defective construction or workmanship brought by a property owner were not claims for “property damage” caused by an “occurrence” under a commercial general liability (“CGL”) policy. Custom Agri Systems (“Custom”) was a subcontractor on a project for PSD Development (“PSD”). Custom constructed a defective steel grain bin for PDS and PDS sued Custom for defective construction. Thereafter, Custom sought coverage from its insurer, Westfield Insurance Company (“Westfield”). Westfield denied coverage on... Continue reading
Posted Nov 29, 2012 at Insurance Developments
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In Fiallo v. Allstate Ins. Co., AC32766 (slip. op.) (Conn. App. Oct. 2, 2012), the Connecticut Appellate Court held a trial court was within its discretion in denying a plaintiffs request to amend his complaint after a jury verdict but, the trial court had erred in failing to find ambiguity in the insurance policy. In Fiallo, the Plaintiff brought suit against Allstate Insurance Company (“Allstate”) pursuant to the uninsured motorist provision of a policy issued by Allstate. A jury rendered a verdict in favor of the Plaintiff and Allstate filed a motion to reduce the verdict to $0 in accordance... Continue reading
Posted Nov 16, 2012 at Insurance Developments
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In Evanston Ins. Co v. Legacy of Life Inc, No. 10-50267 (5th Cir. Aug. 24, 2012) the United States Court of Appeals for the Fifth Circuit held an insurer owed no duty to defend its insured in an underlying suit where the insured is accused of selling body-parts for profit. Prior to issuing a decision, the 5th Circuit certified two questions of law to the Supreme Court of Texas, asking the Texas Court to determine if Evanston Insurance Company (“Evanston”) owed a duty to defend its insured, Legacy of Life Inc. (“Legacy”) under the insured’s professional and general liability policies.... Continue reading
Posted Oct 12, 2012 at Insurance Developments
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In a recent ruling on a motion to dismiss, the United States District Court for the Western District of Pennsylvania held an insureds bad faith claim against its insurer was legally insufficient where the complaint merely stated a list of accusations without factual support. Palmisano v. State Farm Fire and Casualty Co., No. 12-886 (W.D.Pa. Aug. 20, 2012). The dispute arose after State Farm Fire and Casualty Company (“State Farm”), relying on a report prepared by a structural engineer, denied coverage under the plaintiffs’ homeowner insurance policy. The report concluded the damage to the plaintiffs’ home resulted from long-term earth... Continue reading
Posted Oct 11, 2012 at Insurance Developments
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The United States Court of Appeals for the Eighth Circuit recently held that an insurer had no duty to defend under an advertising liability policy that covered title or slogan infringement, but excluded coverage for trademark infringement. In Interstate Bakeries Corp. v. OneBeacon Insurance Co., No. 11-1802 (July 24, 2012), Flowers Bakeries Brands, Inc. (“Flowers”) sued Interstate Bakeries Corp. (“IBC”) for trademark infringement and unfair competition, asserting that IBC’s marks of “Nature’s Pride” and “Nature’s Choice” were confusingly similar to Flowers’ mark, “Nature’s Own.” IBC’s advertising liability policy with OneBeacon Insurance Co. (“OneBeacon”) provided coverage for losses resulting from infringement... Continue reading
Posted Aug 8, 2012 at Insurance Developments
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In a decision released earlier this month, the Sixth Circuit Court of Appeals clarified that the defect triggering batch coverage under a medical product endorsement is knowledge by the manufacturer that the problem stemmed from its own operations. Stryker Corp. v. XL Ins. America, No. 4:01-cv-157 (June 5, 2012). In 1997, Howmedica, a Pfizer subsidiary, manufactured and distributed an artificial knee joint known as Duracon Unicompatmental Knees (“Uni-Knees”). In the mid-1990s it was discovered the procedure used to sterilize the Uni-Knee, caused the product to degrade slowly from the air in its packaging. To combat this problem, Pfizer and Howmedic... Continue reading
Posted Jun 29, 2012 at Insurance Developments
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A recent decision from the Massachusetts Supreme Court highlights the serious, and potentially expensive, pitfalls of failing to settle significant injury cases, where liability is not disputed. Rhodes v. AIG Domestic Claims, Inc., SJC 10911 arose from a serious motor vehicle accident that left the plaintiff, Marcia Rhodes, paraplegic and with documented past and future special damages of nearly $3 million. Rhodes, her husband and daughter, filed suit in July 2002. By August 2003, plaintiffs' counsel had fully documented the damages, provided a day-in-the-life videotape, and made a $16.5 million demand for settlement. The demand was forwarded to Zurich American... Continue reading
Posted May 25, 2012 at Insurance Developments
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In a noteworthy decision addressing insurance coverage for damages allegedly caused by climate change / global warming resulting from the purported negligent acts of some of the world’s largest energy companies, the Virginia Supreme Court recently held that (as alleged) such damages fall outside the coverage grant of a typical commercial general liability policy. Specifically, last month the Virginia Supreme Court issued its opinion (on rehearing) in AES Corporation v. Steadfast Insurance Company, No. 100764 (Va. Apr. 20, 2012). In that decision, the Court reaffirming its decision from the fall, which held that the complaint in Native Village of Kivalina... Continue reading
Posted May 25, 2012 at Insurance Developments
On January 27, 2012, the Centers for Medicare & Medicaid Services (CMS) proposed a rule to implement the Medicaid prescription drug provisions of the Affordable Care Act. The proposed rule, which is entitled “Medicaid Program; Covered Outpatient Drugs”, was published in the Federal Register on February 2, 2012. Its initiatives are expected to result in savings of $17.7 billion on prescription drugs bought through Medicaid over five years, increase transparency in drug pricing, and ensure that taxpayers and states aren’t overpaying for prescription drugs. This rule is similar to state initiatives to improve fairness in drug pricing, some of which... Continue reading
Posted Mar 19, 2012 at Insurance Developments
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The Fourth Circuit recently certified the question of pollution exclusion ambiguity to the Virginia Supreme Court in Travco Insurance Co. v. Ward. A coverage dispute arose over damage caused by Chinese Drywall in the policyholder’s home. The District Court for the Eastern District of Virginia granted the insurer’s declaratory judgment action, finding that although there was a direct physical loss, the loss was excluded by the policy’s pollution exclusion, among others. The District Court rejected the policyholder’s argument that Chinese Drywall was not a pollutant, determining that the sulfur gas released by the drywall was a pollutant recognized by state... Continue reading
Posted Mar 16, 2012 at Insurance Developments
Yesterday, Connecticut's Governor Dan Malloy announced his appointment of a new Insurance Commissioner: Mr. Thomas B. Leonardi. Leonardi is currently, Chairman and CEO of Northington Partners, an insurance specialty venture capital and investment firm based in Avon, Connecticut. He will replace Thomas Sullivan who resigned in November amidst a heated controversy over his office's approval of rate increases for new Anthem Blue Cross and Blue Shield policies. Following his resignation, Sullivan joined PwC (formerly PricewaterhouseCoopers) as a partner. Download Press Release Continue reading
Posted Feb 5, 2011 at Insurance Developments
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Over a forceful dissent the Colorado Supreme Court recently held that an insured driver suffered actual damages, sufficient to state a claim for bad faith, when he entered into a stipulated judgment in excess of the policy limits and a covenant not to execute with the injured passenger. Nunn v. Mid-Century Insurance Company, 244 P.3d 116 (2010). The stipulated judgment was required for the passenger, as the insured’s assignee, to pursue a bad faith claim against the insurer for its purported refusal to settle within the policy limits. At the time the insured entered into the stipulated judgment, the insurer... Continue reading
Posted Jan 27, 2011 at Insurance Developments
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Just after Christmas, the Indiana Supreme Court issued an interesting opinion in the matter of National Union Fire Insurance Company of Pittsburgh, P.A. v. Standard Fusee Corporation . The case itself is a typical insurance coverage dispute over insurers’ obligations to defend and indemnify their insured with respect to claims arising out of environmental contamination at multiple sites in multiple states. At that core of disputes such as this one, is the interpretation afforded to the policies at issue. How those policies are to be interpreted, however, often critically turns on the specific law that is applied. In National Union,... Continue reading
Posted Jan 20, 2011 at Insurance Developments
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A recent Connecticut Superior Court decision held that a defendant driver may not pursue an apportionment complaint against the plaintiff’s uninsured motorist carrier where the plaintiff herself has not named the carrier or an unidentified driver as a defendant in the matter. See Mathews v. Blauvelt, No. CV106002940, 2010 WL 2927310 (Conn. Super. Ct. 2010). In Mathews, the defendant in a personal injury action resulting from an automobile accident, filed an apportionment complaint against the plaintiff’s insurance carrier, alleging that an unidentified motorist was the actual cause of the accident. The defendant further alleged that the insurer, "as surrogate for... Continue reading
Posted Nov 30, 2010 at Insurance Developments
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The Connecticut Supreme Court recently held that prejudice to the insurer should not be considered in examining late underinsured motorist claims. Voris v. Middlesex Mut. Assurance Co., 297 Conn. 589 (2010). In Voris, the insureds maintained an automobile policy through Middlesex which included a provision requiring any action to be commenced within three years of the date of the accident. Id. at 592-93. The policy provided an exception for underinsured motorists claims; these claims could be commenced after the three years had passed so long as written notice of intent to bring a claim was provided within the three years.... Continue reading
Posted Nov 30, 2010 at Insurance Developments
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Jan 21, 2010