Despite Irrebuttable Presumption Of Prejudice, Insurer Who Failed To Timely Disclaim Coverage For Default Judgment Against Its Insured Must Pay

In Montpelier U.S. Insurance Co., v. 240 MT. Hope Realty Co., et al., 2015 WL 6395949 (S.D.N.Y. Oct. 22, 2015), the United States District Court for the Southern District of New York joined the ever-growing list of courts interpreting N.Y. Insurance Law §3420(d)(2) to hold insurers who issue or deliver policies in New York strictly accountable for failing to timely disclaim coverage for bodily injury claims arising out of accidents occurring within the state. This concept is by no means a
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Untimely Intervention Sinks Insurer Challenge To Allegedly Collusive $20MM Settlement

In CE Design Ltd. v. King Supply Co., LLC, No. 12-2930, 2015 U.S. App. LEXIS 11117 (7th Cir. June 29, 2015), the Seventh Circuit denied as untimely the attempted intervention of three insurers (all CNA companies) into the underlying lawsuit. The insurers were, in turn, unable to challenge the approval of a $20 million settlement between the policyholder, King Supply Co., LLC, and Plaintiff CE Design Ltd. (and its co-plaintiff). The underlying case involved a junk fax lawsuit filed by
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Wisconsin Federal District Court Chides Insurers for Inaction, Deems Insurers Estopped from Asserting Their Right To Defend

In Haley v. Kolbe & Kolbe Millwork Co., Inc., No. 14-cv-99-bbc, 2015 U.S. Dist. LEXIS 42584 (W.D. Wis. Apr. 1, 2015) the U.S. District Court for the Western District of Wisconsin granted summary judgment in favor of the insured, Kolbe & Kolbe Millwork Co. (Kolbe), holding that Fireman’s Fund Insurance Company and United States Fire Insurance Company (collectively the “insurers”) were estopped from having the right to select counsel to represent Kolbe in a class action lawsuit alleging the sale of
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Eleventh Circuit Limits Court’s Consideration of Motion to Dismiss To the Complaint

In Twin City Fire Insurance Co. v. Hartman, Simons & Wood, LLP, 2015 U.S. App. LEXIS 6092 (11th Cir. Apr. 15, 2015), the U.S Court of Appeals for the Eleventh Circuit reversed a lower court ruling and held that a professional liability insurer was not barred from recovering some, or all, of a $10 million settlement it paid on behalf of its insured due to the affirmative defenses of waiver and voluntary payment. Twin City Fire Insurance Company (Twin City)
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Illinois Appellate Court Applies Broad and Harsh Interpretation of Estoppel Doctrine

In Mt. Hawley Insurance Co v. Certain Underwriters at Lloyd’s, London, 2014 IL App (1st) 133931 (Sept. 9, 2014), the Illinois Appellate Court broadly applied the estoppel doctrine against Underwriters. The trial court had entered summary judgment against Underwriters, finding that it had breached its duty to defend the putative additional insureds. Underwriters did not challenge that finding on appeal. Instead, Underwriters appealed the finding that it was estopped from asserting certain defenses to indemnification because it was conclusively established
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New York’s First Department Rejects Well-Established Precedent on Coverage Notices

George Campbell Painting v. National Union Fire Ins. Co. of Pittsburgh, PA  (N.Y. App. Div. January 17, 2012) Following settlement of a personal injury lawsuit brought by a subcontractor’s employee against the general contractor and owner, Plaintiffs, the general contractor and owner, sued the subcontractor’s excess insurer (“Insurer”), seeking a declaration that Insurer’s disclaimer of coverage was untimely under former Insurance Law § 3420(d) (current version at § 3420(d)(2)), and seeking recovery, as additional insureds, of Insurer’s alleged pro rata
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District Court Refuses to Dismiss FLSA Coverage Suit

Vozzcom, Inc. v. XL Specialty Ins. Co. (S.D. Fla. Apr. 19, 2010)  A federal judge refused to dismiss cable company Vozzcom’s coverage action against XL Specialty for defense costs arising from an underling Fair Labor Standards Act action, finding that XL failed to demonstrate that the claims were excluded by the policy.   Vozzcom’s action against XL Specialty is the third in a series of cases brought by Vozzcom against its insurers for coverage for claims under the FLSA. In
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Insurer Must Defend Insured In Alleged Organ-Harvesting Scheme

Nationwide Mutual Ins. Co. v. Garzone (E.D. Penn, September 17, 2009)   In this declaratory judgment action, the insurer sought to have the court render a decision on whether or not it has a duty to defend and/or indemnify its policyholders, providers of crematory services, for underlying claims involving the policyholder’s selling of body parts for cash.  The underlying claims alleged that the policyholders either intentionally or by their negligence participated in a scheme to harvest organs of deceased individuals
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TIMELINESS OF NOTICE AND/OR DISCLAIMER – Issues of fact existed regarding insured’s reasonable belief in non-liability.

Preferred Mutual Ins. Co. v. New York Fire-Shield, Inc. N.Y.A.D. (3d Dept., June 4, 2009) Manufacturer was aware its fire-retardant spray was used on a product worm by two Marines when they suffered severe burns, but failed to provide notice to its insurer for two years.  The appellate court found issues of fact existed regarding insured’s reasonable belief in non-liability and should be resolved by a jury.   Click here for decision.   By Kimberly E. Whistler and Joseph A.Olivia  
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NY Appellate Court Clarifies Timely Disclaimer Statute in Claims Between Carriers

JT Magen v Hartford Fire Ins. (1st Dept May 20, 2009) The court revisted its prior decision in Bovis Lend Lease, LMB v Royal Surplus Lines Ins. Co. (27 AD3d 84 [2005]), which held that the timely notice disclaimer requirements of Insurance Law 3420(d) did not apply to claims between coinsurers. Here, the court held that a disclaimer by Hartford was late pursuant to the statute, despite the fact that notice was given by a coinsurer, Travelers. The court reasoned that
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