insurance law – Duane Morris Insurance Law

The New Jersey Appellate Division ruled that an insurer is not obligated to indemnify an insured for natural resources damages that it may pay in the underlying lawsuit brought by the New Jersey Department of Environmental Protection (“NJDEP”) because of the Policy’s Prior or Pending Litigation Exclusion. This exclusion applies because the NJDEP’s suit is based on the same environmental contamination alleged in a 1987 Administrative Consent Order between the NJDEP and the insured. Handy & Harman, et. al v. Beazley USA Services Inc. (Syndicates 623 and 2623 at Lloyd’s London), A-2068-20 (N.J. App. Div. March 2, 2023) (unpublished).

Lesson: An administrative consent order – required by an environmental statute in order for the property to be sold in the 1980’s – is sufficient to constitute a “claim,” as defined by the Policy’s Prior or Pending Litigation Exclusion.

Continue reading “Coverage Denied in NJ Environmental Suit Based on Policy’s Pending Litigation Exclusion”

February 17, 2022February 17, 2022 by Daniel B. Heidtke

Texas Law Allows Courts to Look Beyond Eight-Corners Analysis, Consider Extrinsic Evidence, in Certain Circumstances

By: Daniel B. Heidtke

In a significant ruling issued less than one week ago, the Supreme Court of Texas adopted a modified form of the “Northfield exception” to the “eight-corners rule” previously set out by the U.S. Court of Appeals for the Fifth Circuit in Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523 (5th Cir. 2004).

The court in Monroe Guaranty Ins. Co. v. BITCO General Ins. Co., Case No. 21-0232, explained that the practice of looking at extrinsic evidence outside of the four corners of the complaint and four corners of the insurance policy is permissible, in certain circumstances. As explained by the court, those circumstances require that the extrinsic evidence “(1) goes solely to the issue of coverage and does not overlap with the merits of liability; (2) does not contradict facts alleged in the pleading; and (3) conclusively establishes the coverage fact to be proved.”

Continue reading “Texas Law Allows Courts to Look Beyond Eight-Corners Analysis, Consider Extrinsic Evidence, in Certain Circumstances”

March 17, 2021 by Daniel B. Heidtke

Rejection of Reasonable Settlement in Third Party Insurance Claim Not Per Se Unreasonable

In an opinion filed on March 8, the California Court of Appeal, Second District, reversed a jury verdict against an insurer because the jury failed to make an explicit finding that the insurer acted unreasonably in some respect. In Alexander Pinto v. Farmers Ins. Exch., Case No. B295742, the court held that a bad faith claim requires a finding that the insurer acted unreasonably in some respect. Because the jury made no such finding (because the verdict form lacked any question asking the jury to make such a finding), the court vacated the verdict in favor of the insured and remanded the case for further proceedings.

The coverage dispute arose out of a single-car traffic accident. The victim offered to settle his claim against the vehicle owner in exchange for payment of the vehicle owner’s insurance policy limits. The offer lapsed before the insurer accepted it. The victim then obtained a judgment in excess of the vehicle owner’s insurance policy limits. The vehicle owner then assigned her claims against the insurer to the victim. The victim then sued the insurer alleging that the insurer should be held liable for its alleged bad faith failure to settle. The victim prevailed at trial against the insurer.

At issue in the appeal was the lack of an express finding by the jury that the insurer had acted unreasonably (again, the lack of an express finding was because the jury had not been asked this question on the verdict form). The court explained, “[t]he issue is whether, in the context of a third party insurance claim, failing to accept a reasonable settlement offer constitutes bad faith per se. We conclude it does not.”

Continue reading “Rejection of Reasonable Settlement in Third Party Insurance Claim Not Per Se Unreasonable”

April 21, 2020April 21, 2020 by Duane Morris

Coronavirus Business Interruption Litigation Ramping up to Include Several Class Action Suits Against Single Insurers

By Dominica C. Anderson, Philip R. Matthews and Daniel B. Heidtke

As the coronavirus cases start peaking in at least some parts of the United States, the American courts are beginning to experience mounting cases relating to claims against businesses for coronavirus infections and against insurers for alleged business interruption coverage. A few weeks ago, some well-known restaurants in the United States commenced litigation against their insurers over claims for insurance coverage stemming from business interruption. These individual cases will raise a number of issues whether there is direct physical loss to covered property and whether the virus exclusions in the policies bar coverage. As a host of other types of businesses have followed by filing a number of individual suits in several states against their insurers. Last week, however, a new form of litigation has been filed with multiple class action insurance coverage lawsuits being brought by alleged representatives against single insures who are claimed to have written business interruption policies to a number of businesses in given areas or nationwide. Continue reading “Coronavirus Business Interruption Litigation Ramping up to Include Several Class Action Suits Against Single Insurers”

March 24, 2020 by Daniel B. Heidtke

Statutes Compelling Coronavirus Business Interruption Insurance Should Face Constitutional Constraints

We previously wrote about the growing likelihood that insurance companies would face claims for business interruption and contingent business interruption insurance claims as their insureds looked to cope with the broad effects of the novel coronavirus outbreak and response. Heating Up: New Orleans-Based Oceana Grill Seeks Insurance Coverage for Coronavirus-Caused Business Interruption. Now, state and federal governments are beginning to consider ways that they might compel such coverage.

Last week, members of the federal government wrote to insurance industry leaders urging them to expand commercial business interruption coverage for COVID-19 losses. In response, the insurance industry leaders replied, “Standard commercial insurance policies offer coverage and protection against a wide range of risks and threats and are vetted and approved by state regulators. Business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19.” Continue reading “Statutes Compelling Coronavirus Business Interruption Insurance Should Face Constitutional Constraints”

August 15, 2018August 17, 2018 by Duane Morris

Duane Morris’ Thomas Newman Recognized as the NYC Appellate “Lawyer of the Year” by Best Lawyers

Duane Morris’ Thomas Newman has been named by Best Lawyers as the 2019 “Lawyer of the Year” in New York City for Appellate Practice. The recognition is given to only one attorney for each practice area and city. Lawyers are selected based on high marks received during peer-review assessments conducted by Best Lawyers each year. Mr. Newman also received this distinction in 2018 and 2013.

Mr. Newman practices in the areas of insurance and reinsurance law, including coverage, claims handling, contract drafting and arbitration and litigation. In addition to his insurance/reinsurance practice, Mr. Newman has wide experience in appellate practice and has handled hundreds of appeals in both state and federal courts in New York and elsewhere and has argued 80 appeals in the New York Court of Appeals.

He is a member of the American Academy of Appellate Lawyers; a life member of the American Law Institute; a Fellow of the Chartered Institute of Arbitrators; a member of the London Court of International Arbitration; a member of the American College of Coverage and Extracontractual Counsel; a member of ARIAS-U.S.; a member of the Federation of Defense and Corporate Counsel; a Fellow of the New York State Bar Association Foundation; and a member of the New York State Office of Court Administration’s Advisory Committee on Civil Practice.

He is the original author of New York Appellate Practice, co-author of the Handbook on Insurance Coverage Disputes and the author of numerous articles on insurance/reinsurance and appellate practice.

October 2, 2015 by Max H. Stern

Protections Against Defended Policyholder Manufacturing Bad Faith Case Via Stipulated Judgment Confirmed By California Court

The California Court of Appeal for the Fourth District, Division Two, in 21st Century Ins. Co. v. Superior Court (Tapia), ___ Cal.App.4th ___ (No. E062244, September 10, 2015), recently confirmed some of the important protections for defending insurers against stipulated judgments that were established in the Hamilton and Safeco decisions and limited the application of other decisions that have been relied on by claimants and policyholders seeking to get around the Hamilton rule against bad faith actions premised on such stipulated judgments. Continue reading “Protections Against Defended Policyholder Manufacturing Bad Faith Case Via Stipulated Judgment Confirmed By California Court”

May 29, 2015May 29, 2015 by Duane Morris

Chambers Ranks Duane Morris Among Top Five Insurance Practices in U.S.

Duane Morris is pleased to announce that Chambers USA has once again singled out the success of the firm’s Insurance practice group. Chambers and Partners’ annual survey of the American legal profession consistently ranks Duane Morris among national leaders in insurance law and in 2015 ranked the firm in its top five for representation of Insurers in Insurance Dispute Resolution. Chambers has praised the group as being “A full-service insurance practice that has unparalleled bench strength at the highest level of insurance work,” and that it “Possesses the expertise to assist on all coverage matters across a huge range of arenas, as well as reinsurance, bad faith and policy drafting advice.” Nationally, Chambers recognized practitioners Philip Matthews, Max Stern and Thomas Newman for their work and contributions and in California, Andrew Gordon, Ray Wong and Richard Seabolt have also been recognized.

May 22, 2015 by Duane Morris

Duane Morris Attorney Thomas Newman Authors “Satisfying a Self-Insured Retention or Deductible in a Third Party Claim”

Duane Morris of counsel Thomas R. Newman authored an article that was recently published in the FDCC Quarterly. “Satisfying a Self-Insured Retention or Deductible in a Third Party Claim” explores the risks in protecting against third-party claims and that is not financially necessary for the commercial policyholder to purchase liability insurance. The article will additionally discuss the differences between a “deductible” and an “SIR” and even considers why a policyholder could choose one instead of the other even if the dollar amount is the same. Subsequently, the article will examine whether an SIR may be satisfied by “other insurance” and finally, address how a deductible can be satisfied and whether the defense consts will erode the SIR.

To read the article in its entirety, please visit the FDCC Quarterly website.