A California Court of Appeal has affirmed a summary judgment in favor of the insurer on defense and indemnity with respect to claims that arose from circumstances known to the policyholder when it applied for professional liability insurance but that were not disclosed to the insurer in the application. Crown Capital Securities, L.P. v. Endurance American Specialty Ins. Co. (Cal.Ct.App, 2d Dist., Div. 5, 4/10/15). Because the application stated that a claim is excluded from coverage if arising from any undisclosed circumstance that was required to be disclosed in response to a question asked, and the application requested disclosure of circumstances that may result in a claim, the policyholder was not entitled to coverage for claims arising from the known but undisclosed circumstance.
California Guidance on Complex Duty to Defend Disputes over Additional Insured Status
In McMillin Companies, LLC v. American Safety Indemnity Co. (4th Dist. Div. 1, No. D063586, January 22, 2015 (published in relevant part)), the California Court of Appeal for the Fourth District has provided some meaningful guidance on how a trial court should handle issues that regularly come up in cases where an alleged additional insured claims breach of the duty to defend by multiple insurers, including explaining the significance of an insurer’s unsuccessful attempt to obtain summary judgment on the duty to defend, the significance of other insurer settlements on claims against the remaining insurer, and the procedure for applying an offset to the policyholder’s claim for such settlements.
The Illinois Duty to Defend: Litigation Insurance against Groundless Suits Even When Extrinsic Facts Known to Both Insurer and Insured Would Otherwise Abrogate Coverage
On January 13, 2015, the Illinois Appellate Court issued its opinion in Illinois Tool Works, Inc. v. Travelers Casualty and Surety Co., 2015 IL App. (1st) 132350 (1st Dist. 2015), wherein the court held the insurer had a duty to defend its insured against numerous vaguely pleaded toxic tort complaints. The central issue in Illinois Tool Works was whether facts extrinsic to the underlying complaint, known to both the insurer and insured, can abrogate the duty to defend. The Illinois Appellate Court held that undisputed extrinsic facts not pleaded in the underlying complaint cannot relieve an insurer of its duty to defend unless and until proven in the underlying action. Continue reading “The Illinois Duty to Defend: Litigation Insurance against Groundless Suits Even When Extrinsic Facts Known to Both Insurer and Insured Would Otherwise Abrogate Coverage”
Duane Morris Partner Philip Matthews to be Co-moderator for “A View from the Bench” at ACI’s Asbestos Claims & Litigation Conference
Duane Morris partner Philip R. Matthews will be co-moderator for the “View from the Bench” panel at the Asbestos Claims & Litigation Conference, hosted by the American Conference Institute on January 15-16, 2015 at the Union League of Philadelphia. The panel will take place on Friday, January 16, at 8 a.m.
For more information or to register for this event, please visit the American Conference Institute website.
The California Supreme Court Lets Stand The Federal Ins. v. MBL Cumis Decision
On November 26, 2013, the California Supreme Court denied MBL’s petition for review from the Court of Appeal’s recent decision in Federal Ins. Co. v. MBL (2013) 219 Cal.App.4th 29. In addition, the Supreme Court also denied eight different requests to depublish the decision filed by parties aligned with the insured.
Continue reading “The California Supreme Court Lets Stand The Federal Ins. v. MBL Cumis Decision”
Controlling Cumis – California Court Confirms that Right to Independent Counsel Can be Terminated by Withdrawing ROR
The Second District Court of Appeal has issued an important new opinion that adds to this year’s series of California appellate decisions on when an insurer owes its policyholder a duty to pay for independent defense counsel, in Swanson v. State Farm General Ins. Co., ___ Cal. App.4th ___ (2013). In Swanson, the Court of Appeal found that an insurer that had issued to its policyholder a reservation of the right to deny coverage that gave rise to the type of conflict that creates a right to independent counsel under California Civil Code section 2860 (“Cumis counsel”) could end that duty by withdrawing that portion of the reservation of rights that created the right to have the insurer pay for such counsel. Continue reading “Controlling Cumis – California Court Confirms that Right to Independent Counsel Can be Terminated by Withdrawing ROR”
NY Court of Appeals Revisits Controversial K2 Decision
The New York State Court of Appeals (New York’s highest court) has agreed to hear re-argument on K2 Investment Group LLC v. American Guarantee & Liability Insurance Company, 2013 N.Y. LEXIS 1461 (N.Y. June 11, 2013). In K2, the Court held that a liability insurer that declined to provide a defense to its insured on the basis that the liability alleged was not covered might waive all policy defenses if it was later held that a defense should have been supplied.
Continue reading “NY Court of Appeals Revisits Controversial K2 Decision”
In Pair of Cases, 5th Circuit Enforces 30-Day Notice Requirement in Pollution Exclusion Buy-Back Clauses; No Prejudice Need be Shown
In two separate cases – one under Texas law and one under Louisiana law – the Fifth Circuit has reinforced the principle that a 30-day notice provision in a pollution exclusion buy-back clause is strictly enforceable, and an insurer does not need to demonstrate prejudice to deny coverage. In these cases, the Court found that this outcome was consistent with the Court’s prior decision in Matador Petroleum Corp. v. St. Paul Surplus Lines Ins. Co., 174 F.3d 653 (5th Cir. 1999), and the Court found that this principle of enforceability was not changed by subsequent notice-prejudice cases.
Exhausting Policy Limits When Settling Less than All Lawsuits
In his latest article, Thomas R. Newman explains his thoughts on handling multiple claims with insufficient limits to cover an insured’s total potential exposure, when not all of the claims are settled.
Mr. Newman practices in the areas of insurance and reinsurance law, including coverage, claims handling, contract drafting and arbitration and litigation. He has served as lead counsel in more than 55 reinsurance arbitrations, representing both cedents and reinsurers. He is often called upon to act as an expert witness in insurance cases in the United States and in London.
To read this article, please click here.
San Francisco Trial Court Is First California Court To Adopt The Wallace & Gale Approach To Asbestos Operations Claims
In what is the first trial court ruling in California on the issue, to our knowledge, the San Francisco Superior Court on January 31, 2013 issued a ruling adopting the Wallace & Gale approach to the completed operations issue for asbestos claims. The decision was issued by San Francisco Superior Court Judge John E. Munter in Phase III of Plant Insulation Co. v. Fireman’s Fund Insurance Co., et al., a multi-phase declaratory relief action pending in San Francisco.