Michael Saltzman

All articles by Michael Saltzman

 

Entrust Me, Man: Landlord’s Due Diligence in Screening Tenant Results in Application of “Entrustment Exclusion” For First-Party Claim Arising Out Of Marijuana Operation

In United States Specialty Insurance Co. v. Barry Inn Realty, Inc., 2015 U.S. Dist. LEXIS 119450 (SDNY September 8, 2015), a federal judge for the Southern District of New York granted a commercial property insurer summary judgment finding no coverage for a claim of extensive property damage caused by a marijuana-growing operation conducted by the policyholder’s tenant. The policyholder leased the subject premises to the tenant for the purposes of operating a bar/restaurant. Prior to executing the lease, the policyholder
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Policyholder Required to Pay Back Insurer $900,000 Based on Misrepresentations

A Texas appellate court upheld a substantial jury award against a policyholder on fraud claims in Jackson Fulgham v. Allied Property and Casualty Ins. Co.. The insurer counter-sued the policyholder real estate firm over fraudulent claims it had made about hailstorm damage, resulting in a $900,000 jury award in favor of the insurer. The appellate court upheld the verdict claiming that the evidence supported such finding. In 2009, the policyholder made a claim under its property insurance policy for damage to the
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What’s That Smell? Supreme Court of New Hampshire Holds That Cat Urine Odor Constitutes First-Party Property Damage

In Mellen v. Northern Security Insurance Co., Inc., 2015 WL 1869572 (N.H. April 24, 2015), the Supreme Court of New Hampshire issued a declaratory judgment that a homeowners policyholder was entitled to first-party coverage for cat urine odor. The court further held that coverage was not barred by the pollution exclusion. The policyholders leased an apartment unit, but the tenant moved out in the middle of the lease term due to cat urine odor from the policyholders’ downstairs neighbor. After
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District Court Sleuthing Around Policy Numbering Undermines Insurer’s Motion for Summary Judgment

In Connolly v. Progressive Northern Insurance Co., et al., No. 3:13-cv-2717, 2015 WL 464877 (M.D. Penn. Feb. 4, 2015), the United States District Court for the Middle District of Pennsylvania denied Progressive Northern Insurance Company’s (“Progressive”) motion for summary judgment regarding whether the plaintiff could stack underinsured motorist coverage limits and whether the insurer had engaged in statutory bad faith. Plaintiff was involved in a motor vehicle accident in February 2009.  The third party tortfeasor paid plaintiff his $250,000 policy
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PA Supreme Court Clarifies Trigger of Coverage for Injury to Livestock

The Supreme Court of Pennsylvania recently interpreted the trigger of coverage applicable to property damage, including the first manifestation and multiple trigger approaches.  The Supreme Court held in Pennsylvania National Mutual Casualty Insurance Co. v. St. John, 2014 WL 7088712 (Pa. Dec. 15, 2014),  that, under the “first manifestation” theory, an injury triggers coverage under the policy in effect when the injury or damage is discovered, regardless of the insureds’ knowledge to its cause.  Additionally, the court refused to extend
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PA High Court Gives Green Light to Assignment of Bad Faith Claims

In Allstate Prop. & Casualty Insurance Co. v. Wolfe, No. 39 MAP 2014, 2014 Pa. LEXIS 3309 (Pa. Dec. 15, 2014), the Pennsylvania Supreme Court, in deciding a certified question from the Third Circuit, ruled that statutory bad faith claims under 42 Pa. C.S.A. § 8371 are assignable. The underlying dispute arose from a motor vehicle collision involving an intoxicated driver, Zierle, who was insured by Allstate.  After settlement attempts failed, Wolfe, the tort claimant, sued Zierle for compensatory and
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What’s in Your Breakfast Sanwich? The Eighth Circuit Weighs in on Accidental Product Contamination Policies and Voluntary Product Recalls

In Hot Stuff Foods, LLC v. Houston Casualty Co., 2014 U.S. App. LEXIS 21727 (8th Cir. Nov. 17, 2014), the Eighth Circuit Court of Appeals reversed and remanded a lower court decision holding that a food company’s voluntary recall was covered under an ‘accidental product contamination’ insurance policy. Hot Stuff Foods manufactures two versions of sausage breakfast sandwiches – one that contains monosodium glutamate (MSG), and another that does not.  In 2011, Hot Stuff found out it had inadvertently distributed
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Tenth Circuit Limits Policyholder Recovery for Defective Work and Rejects Windfall Award

This coverage dispute arose from a claim to recover the policyholder’s cost of repairing a site dewatering system.  Glacier Construction Company (Glacier) had contracted with a municipal body to build a new wastewater pumping facility.  Glacier purchased a builder’s risk insurance policy from Travelers Property Casualty (Travelers), which included coverage for “Builder’s Risk Site Preparation.” That provision stated, in pertinent part, as follows:  “If … You incur expenses to reexcavate the site, reprepare the site, regrade the land, or reperform
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Oregon to Join the Federal Healthcare Exchange

The first Affordable Care Act (ACA) health exchange open enrollment period ended March 31, 2014.  States and others are now doing their own evaluations and “after action reports” in an effort to find out what went well and what did not. As of April 1, 2014, approximately 8 million people enrolled via the exchanges.  There are still some remaining questions such as how many have paid their premiums and what impact the young invincibles will have on premiums for the
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Excess Insurer Required to Share Defense Costs Equally

This declaratory judgment action stems from a motor vehicle accident where claimants allege that the driver of a tractor-trailer struck and injured them. The plaintiff Old Republic Insurance Company (Old Republic) provided a defense to the driver, the lessee of the tractor – DAM Express Delivery Service (DAM) and the owner of the trailer – Coca-Cola (Coke) in the underlying action. The owner of the tractor, Ryder Transportation Services (Ryder), obtained insurance through Old Republic covering DAM and Ryder on
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Employee Exclusion Applies to “Statutory Employees” Even if Not Technically Employed by Additional Insured

The Eleventh Circuit recently held that a standard employee exclusion in a liability policy bars coverage to an additional insured where the injured claimant is a “statutory employee” of the additional insured for purposes of workers’ compensation law, even if the injured claimant is not technically employed by the additional insured. The estate of an employee of a third-tier subcontractor on a construction project sued the project’s general contractor after the employee fell at the construction site and died as
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District Ct. Finds Co-Primary Coverage For Settlement of Underlying Accident

This declaratory judgment action derives from an underlying boat accident where a pontoon boat driven by Matt Higgins, collided with Jeremy Wood’s boat, seriously injuring Wood. The owner of the boat was insured by Owners Insurance Company (OIC). The driver of the boat was insured, through his homeowners’ carrier, State Auto Property and Casualty Company (State Auto). The resulting civil suit settled for $300,000. OIC paid $259,000, while the rest of the co-defendants contributed $41,000 collectively. OIC now seeks reimbursement from State Auto for one-half of the $259,000 settlement paid in the underlying action. State Auto argues that it has no duty to reimburse because OIC’s policy is primary.
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New York First Department’s Message to Insureds: An Equitable Defense Concerning A Policy Exclusion Cannot Be Decided By Motion Practice

206-208 Main St. Assocs. d/b/a/ Sutphin Blvd., LLC v. Arch Ins. Co. (N.Y. App. Ct., 1st Dept. May 2, 2013) A New York appellate court recently held that the issue of whether an insurer was equitably estopped from raising an earth movement exclusion as a defense to coverage two years after it had assumed the purported additional insured’s defense was an issue for the trier of fact. The plaintiff, 206-208 Main Street Associates, Inc. d/b/a 8930 Sutphin Blvd., LLC hired
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Court Rules Policyholder Arguments Do Not Hold Water

Grinnell Mut. Reinsurance Co. v. Hubbs (Appellate Court ofIllinois, Third District, April 24, 2013) This water resource/environmental coverage action arises from an underlying dispute involving the interference and damages from the divergence or obstruction of streams or surface water between landowners.  Specifically, plaintiff insurer brought a declaratory judgment action against landowners who alleged damages to crop land caused by the policyholder’s alleged alteration of the flow and level of surface and groundwater following the policyholder’s construction of a holding pond
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Attorney’s Fees Count Toward Amount-in-Controversy Calculation Under Federal Removal Statute

Francis v. Allstate Ins. Co. (4th Cir. (Md.) Mar. 7, 2013)  The Fourth Circuit recently held that the amount of attorney’s fees sought by an insured in a declaratory judgment action should be included in the calculation to determine whether an insurance coverage case satisfies the amount-in-controversy requirement under the federal removal statute. In 2008, the insured, a California resident, and her minor son were sued in the Maryland state court. The claimant worked as a resident aide at the
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Claim for Improperly Sterilized Medical Equipment Limited to Policy Limits for One Occurrence

Mitsui Sumitomo Ins. Co. ofAmericav. Duke University Health Sys. No. 11-2057, United States Court of Appeals for the Fourth Circuit. February 11, 2013 The Fourth Circuit held that Duke University Health System was limited to policy limits for one occurrence when a mishap occurred where surgical instruments were sterilized with elevator hydraulic fluid. The facts of the case involve elevator workers placing hydraulic fluid into buckets distributed to them by Duke University, which had originally stored surgical detergents. Duke employees
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