Duane Morris’ Cyndie M. Chang, a partner in the firm’s Los Angeles office, will be speaking at the American Bar Association (ABA) Tort Trial and Insurance Practice Section’s spring conference, “Resolution of Property Insurance Claims in the Modern Age-Appraisal, Mediation and Arbitration,” which will be held on April 24-26, 2014, at the Park Hyatt Aviara in Carlsbad, California. Ms. Chang will participate in a panel discussion on “Mock Mediation of a Property Insurance Claim: Focusing on Preparation as the Key to Success” on Thursday, April 24, from 2:00 p.m. to 4:00 p.m.
On January 24, 2014, the Pennsylvania Supreme Court agreed to hear an appeal from the Pennsylvania Superior Court’s Order in Babcock & Wilcox Co. v. American Nuclear Insurers, 2013 Pa. Super. LEXIS 1640 (Pa. Super. Jul. 10, 2013). The Superior Court had ruled in Babcock & Wilcox that an insured cannot seek reimbursement for a settlement negotiated without the insurer’s consent when the insured tendered and the insurer accepted coverage subject to a reservation of rights. See Thomas, C., “Whose Defense is it, Anyway – Consent to Settlement Clauses Under Babcock & Wilcox v. American Nuclear Insurers,” August 29, 2013 Duane Morris Insurance Blog. The Pennsylvania Supreme Court’s appellate review is limited to the issue of whether a policyholder forfeits coverage by settling a claim without the insurer’s consent where the insurer is defending subject to a reservation of rights and the settlement was found to be fair and reasonable.
In a decision notable for several reasons, the New York State Court of Appeals—the state’s highest court—reversed itself in K2 Investment Group, LLC v. American Guarantee & Liability Insurance Co. [21 NY3d 384 (2014)] and reaffirmed its earlier ruling in Servidone Construction Corp. v. Security Insurance Company of Hartford [64 NY2d 419 (1985)].
In doing so, the court reestablished the rule it pronounced in Servidone when it held that a liability insurer who determines not to provide a defense to its insured may still contest its duty to indemnify on the basis of an exclusion to coverage.
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The California Supreme Court issued an important decision last week that potentially impacts all California litigation, including insurance coverage litigation. In Kurwa v. Kislinger, __Cal.4th __ (October 3, 2013) (Supreme Court No. S201619), the Supreme Court held it is not possible to create an appealable final judgment by dismissing remaining causes of action without prejudice and tolling the applicable statute of limitations. This resolves an important split in California appellate courts on the one final judgment rule. The issue commonly arises when parties attempt to move a case into the appellate court after the trial court has resolved the key issues, but some causes of action remain.
In a ruling upholding the concept that “words have meaning”, a United States District Court interpreting South Carolina law denied coverage to an insured which had a claim made against it in one policy period but did not report the claim to its insurer until the next policy period even though the insured was continually insured by the same insurer. Rather, the Court held in essence that a requirement that claims be “made-and-reported in the policy period” actually means that claims that claims must be made and reported in the same policy period and coverage will not be extended merely because the insured renews its policy.
The New York Court of Appeals rendered a decision June 11, 2013 holding “when a liability insurer has breached its duty to defend its insured, the insurer may not later rely on Policy exclusions” to avoid indemnification.
The ruling in K2 Investment Group, LLC, et al v. American Guarantee & Liability Insurance Company, 2013 NY Slip op. 4270 (N.Y., June 11, 2013) will significantly affect an insurer’s assessment of its duty to defend a claim tendered under a liability policy. The court held an insurer may be deprived of the ability to contest coverage for the indemnity of a claim when it determines not to afford a defense to the insured.
What should director minutes say and how detailed should they be? It likely depends on the maturity of the company, the personality of its management and the input of its lawyers. Partner Stephen Honig reviews the considerations in conjunction with the ground rules set forth in the NACD “Directors’ Guide” in this column for Carrier Management.
The Seventh Circuit Court of Appeals decided on April 2, 2013 that an Indiana law firm was not entitled to coverage for a claim made and reported in a second policy period where the insured reasonably had knowledge that a claim might be made during the first policy period. Koransky, Bouwer & Poracky v. The Bar Plan Mutual Insurance Co., No. 12-1579, 2013 U.S. App. LEXIS 6558 (7th Cir. Apr. 2, 2013). As the Court noted (in affirming a District Court decision to the same effect), “a reasonable attorney would have recognized that his failure [to deliver a contract during the first policy period] . . .was an omission that could reasonably be expected to be the basis of a malpractice claim.” Continue reading 7th Circuit Upholds Prior Knowledge Provision in Claims-Made Policy