Jonathan Schapp

All articles by Jonathan Schapp

 

Supreme Court of Illinois Limits Liability of Self-Insured Car Rental Company

On October 8, 2015, in DeShaw Nelson v. Donald Artley, the Illinois Supreme Court overturned a ruling by the First District Appellate Court  that ordered a car rental company to pay an accident victim $600,000 as a result of damages allegedly sustained in an automobile accident involving a car owned by the rental company and driven by an operator without his own insurance. At issue in DeShawn was the extent of financial liability that a self-insuring rental car company faces
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No Sanctions for Policyholder Discovery Abuses

An insurer brought a claim for sanctions in dismissing a property owner’s lawsuit over coverage for damage from Hurricane Ike over discovery abuses. The insurer sought what is commonly known in Texas as “death-penalty” sanctions over the discovery abuses. The lower court had granted the sanctions, but this court found that the trial court had imposed excessive sanctions when it dismissed the plaintiff’s pleadings against the insurer and claims adjuster. This court determined that, while the purported discovery sanctions may
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Insurers’ Duty of Good Faith Continues After the Filing of a Lawsuit

In  Am. Nat’l Prop. & Cas. Co. v. Stutte, 2015 U.S. Dist. LEXIS 55280 (E.D. Tenn. Apr. 28, 2015),  a federal court in Tennessee recently ruled that a finding of bad faith can be based on decisions made by the insurer after a declaratory action has been filed. The claim at issue in this litigation related to the loss of the insured’s home in a fire. The insured made a claim on their policy and the subsequent investigation into the circumstances of the
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Trial Court Judge Erred in Requiring Insurer to Produce Claim Files in Bad Faith Lawsuit

The South Dakota Supreme Court found that an insurer did not waive its attorney-client privilege and, thus, was not required to produce 200 unredacted workers’ compensation claim files in a bad faith lawsuit. The Supreme Court found that the trial court judge erred in allowing the evidence in by not conducting an in camera inspection of the files before finding that the insurer had implicitly waived its attorney-client privilege regard its claim files. This case involved a policyholder that sued
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Mississippi District Court Finds Other Insurance Provisions Cancel Each Other Out

In EMJ Corp. v. Hudson Specialty Ins. Co., (2015 U.S. Dist. LEXIS 29781, 14-15, N.D. Miss. Mar. 11, 2015) the plaintiffs, EMJ Corporation and Westchester Fire Insurance Company, brought this declaratory judgment action against Defendant Hudson Specialty Insurance Company. They were seeking a declaration that Westchester was entitled to contribution from Hudson Specialty for the amount Westchester paid on behalf of EMJ in a settlement of an underlying personal injury action. In partially granting the defendant’s motion for judgment notwithstanding
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The Insurer Is In Control: California District Court Upholds Insurer’s Right To Control Settlement and Conduct Its Due Diligence with Respect To a Coverage Investigation

In Travelers Property Casualty Co. of America v. Kaufman & Broad Monterey Bay, Inc., 2015 WL 581528 (N.D. Cal. Feb. 11, 2015), Travelers had issued commercial general liability insurance policies to Norcraft. The defendants were named as additional insureds on the policies. The defendants were sued for claims arising out of a residential development project. The defendants tendered their defense of the claims to Travelers, which accepted the tender and appointed counsel for the defendants. Travelers and the defendants asserted
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Settlement of Ill-Gotten Gains Suit Does Not Constitute Repayment or Restitution

On Tuesday, December 16, in U.S. Bank Nat. Ass’n v. Indian Harbor Ins. Co., 2014 WL 7183851 (D. Minn. Dec. 16, 2014), the US District Court for the District of Minnesota granted US Bank’s summary judgment motion, finding insurance coverage in an overdraft-fee dispute settlement. The three underlying class action lawsuits were filed against US Bank National Association and US Bancorp by plaintiffs claiming the bank unlawfully inflated customers’ overdraft fees. The banks provided customers with account overdraft protection and
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Minnesota Court Finds Specific Provisions In Policy Exclusion Govern Over More General Follow Form Provisions

This insurance coverage action stemmed from an underlying motor vehicle accident where Arnold Paster’s vehicle (driven by Paster and owned by Paster Enterprises) collided with Jerome G. Wind’s motorcycle. Wind sought coverage for his injuries from Paster Enterprises’  commercial automobile carrier, Phoenix Insurance Co.’s  (Phoenix) its umbrella carrier Great American Insurance Co. (Great American), and Paster’s personal automobile carrier Commerce & Industry Insurance Co.  (Commerce) and his personal excess liability carrier, Chartis  Property Casualty Co. (Chartis). In analyzing cross-motions for
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“Test Drive” Ambiguous

In Exotic Motorcars and Jewelry, Inc. v. Essex Insurance Co., a Florida appeals court found the trial court interpreted material policy terms too narrowly in denying coverage of the vehicle collision at issue. In this coverage dispute, the insured Exotic Motorcars and Jewelry, Inc. (Exotic) sued its insurer Essex Insurance Co. (Essex) to recover its loss from a vehicle collision.  The collision occurred while the insured, an exotic car dealer, drove a newly acquired vehicle to another location for inspection. 
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Insured Settles for Less from Insurers, and Excess Coverage Still Must Indemnify: “Ultimate Net Loss Liability” Could Apply to Settlement Amounts with Lower Level Insurers

On Friday, August 29, 2014, the Eleventh Court of Appeals in Texas reversed the trial court’s summary judgment order finding that an excess insurance policy was triggered though the underlying policies had not exhausted their full coverage limit. Plantation Pipe Line Co. operates pipelines transporting petroleum throughout the southern and eastern United States.   In 1990, a leak was found in North Carolina, and Plantation was required to remediate the site. Plantation spent almost $12 million to clean and restore the
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In Motor Vehicle Accident, Insurer of Vehicle Owner Owes Primary Coverage Despite “Other Insurance” Provisions

In October 2008, Jayme Lynn Jones, an employee of Hook & Anchor (H&A) was involved in a collision with Alexander Kosaka while Jones was driving a truck owned by Chemical Weed Control, Inc. (Chemical Weed).  American States Insurance Company (American) insured H&A. ACE American Insurance Company (ACE) insured Chemical Weed. American tendered the defense of H&A in the ensuing litigation to ACE, which ACE denied. American defended H&A, and subsequently commenced this declaratory judgment action seeking defense costs and attorneys’
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