Sharon Angelino

All articles by Sharon Angelino

 

Demand for Refund Constitutes a Claim under Professional Liability Policy Says Eighth Circuit

In Philadelphia Consolidated Holding Corp. v. LSI-Lowery Systems Inc., 2015 U.S. App. LEXIS 349 (8th Cir. Jan. 9, 2015), the Eighth Circuit affirmed the district court’s grant of summary judgment in favor of Philadelphia Consolidated Holding Corporation, d/b/a/ Philadelphia Insurance Companies (PIC).  The Eighth Circuit found that PIC was not required to defend and indemnify its insured, LSI-Lowery Systems, Inc. (LSi) because LSi failed to satisfy the policies’ claims made and reported requirement. In the underlying suit, LSi sold business
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Excess Insurer May Recoup Settlement Payments from the Primary Insurer

In RSUI Indemnity Co. v. American States Insurance Co., No. 14-30033, 2014 U.S. App. LEXIS 18407 (5th Cir. Sept. 25, 2014), the Fifth Circuit Court of Appeals held no adjudicated excess judgment is required for an excess insurer to recoup settlement payments from the primary insurer whose alleged bad faith failure to defend the common insured caused the excess settlement. In the underlying action arising from an automobile collision, counsel retained by the primary carrier, American States Insurance Co. (ASIC),
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Court Rejects Policyholder’s Products-Completed Operations Hazard Arguments In Attempt To Obtain Coverage For Environmental Claims

This environmental coverage action arises from soil and groundwater contamination at Visteon’s Indiana plant that migrated to the properties of neighboring landowners. Specifically, Visteon manufactured automotive climate control system parts at the facility continuously until 2007 and operated 13 degreasers, which primarily used Trichloroethylene (TCE) as a degreasing solvent.  Multiple historical releases of TCE from the 1960s to 2000 and beyond resulted in a TCE groundwater plume that emanated from the site and volatile organic compounds, including TCE, were detected
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New York Court Reaffirms Limitations on Policy Claims Arising Out of Superstorm Sandy

In Sikarevich Family L.P. v. Nationwide Mutual Insurance Co., No. 13-cv-05564, 2014 U.S. Dist. LEXIS 92254 (E.D.N.Y. July 3, 2014), the United States District Court for the Eastern District of New York addressed a policyholder’s claims for:  (1) breach of the covenant of good faith and fair dealing, (2) unjust enrichment, (3) consequential damages, and (4) punitive damages.  Notably, the policyholder alleged a breach of contract cause of action. The policyholder’s claims arose out of Nationwide’s denial of coverage for
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Preemptive Power Shutdown From Hurricane Sandy Was Not A Covered Business Interruption Claim

This coverage action arises from the widespread power outages that occurred in and around New York City during and after Hurricane Sandy. On October 29, 2012, in anticipation of storm-related flooding, utility provider Consolidated Edison Co. of New York, Inc.  preemptively shut off power to certain of its service networks to preserve the integrity of the utility system.  As a result, the plaintiff, a law firm, was without power at its lower Manhattan office for several days. The firm filed
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NYDFS Announces New Extension to Sandy Mediation Program

The New York Department of Financial Services (NYDFS) has extended the emergency regulation (15th Amendment to Regulation 64, 11 NYCRR 216) surrounding mediations relating to Hurricane Sandy.  The current version was filed with the Secretary of State on February 14,2014 and will expire on or about May 15, 2014 under the 90 day rule. Originally promulgated in the aftermath of Superstorm Sandy, the amendment applies to any claim for loss or damage, other than claims made under flood policies issued
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Insurers Reach the Summit: N.Y. Court of Appeals Reverses K2, Says Exclusions Not Lost in Breach of Duty to Defend

After granting reargument, the New York State Court of Appeals reversed its previous decision finding that the rule of stare decisis must govern and that the court erred by failing to take account of controlling precedent in Servidone Const. Corp. v. Sec. Ins. Co. of Hartford. In that previous decision, K2-I, the court arguably rewrote New York law by adopting a minority position that recognized the doctrine of coverage by estoppel ruling that where an insurer breaches its duty to
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Eleventh Circuit Blows Away $4M Verdict in Hurricane Wilma Case

The Eleventh Circuit recently reduced a $4 million jury verdict to $1,600 after finding that the policyholder, a property management company, lacked an insurable interest in the ownership of the property to justify any higher award. The plaintiff, Banta Properties (Banta), served as the property management company for three apartment complexes in Broward County, Florida. The three complexes were all separate legal entities that were not owned by Banta. In exchange for managing the complexes, the owners paid Banta 4
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Florida and Alabama Governors Join Fight Against Flood Insurance Rate Hikes

The Governors of Florida and Alabama filed an Amicus brief in a lawsuit brought by Mississippi against the federal government over flood insurance rate hikes. Mississippi filed suit just before rate hikes took effect in accordance with the Federal Emergency Management Agency’s Biggert-Waters Flood Insurance Reform Act.  In 2012, President Barack Obama signed the Biggert-Waters Flood Insurance Reform Act into law. This act was adopted to fund the federal government’s flood insurance program which is heavily in debt. It requires
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That Sinking Feeling: Sinkhole Not Covered But Redesign Is

A lengthy rainstorm caused damage to three water basins designed to manage stormwater flow from buildings and parking lots near a shopping center. The increased flow of stormwater into the ground caused substantial sinkholes to form in two of the three basins. The insured repaired and filled the sinkholes but state officials issued an ordinance, requiring a redesign of the basins to prevent future sinkhole damage. The insured sought coverage for all damage arising out of the sinkholes. The insurer disclaimed coverage.
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California Court of Appeals says Insurers Do Not Have a Duty to Initiate Settlement

The issue involved in this case was the duty of an insurer to settle a third party claim within the policy limits when liability was clear and there was a substantial likelihood of a recovery in excess of the policy limits. Specifically, the question decided was whether an insurer must initiate settlement negotiations or offer its policy limits where the third party claimant has not made a demand or settlement offer. The trial court found that the insurer was not
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Insured vs. Insured Exclusion Bars Coverage for Bank Officers in FDIC Suit

St. Paul Mercury Ins. Co. v. Miller (N.D. Ga. Aug. 19, 2013)  A Georgia court recently held that an insured-vs-insured exclusion in a directors and officers policy precluded coverage for two former officers of a failed bank sued by the FDIC. The FDIC took over the failed Community Bank & Trust of Cornelia, Georgia and then sued two former officers in connection with their role in improperly approving loans. The bank’s D&O insurer agreed to defend the officers subject to
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Insured Unable to Force Insurers to Pay for Its Selected Counsel

Federal Insurance Company et al., v. MLB, Inc. (Case No. H036296) (Ca. App. Ct., August 26, 2013) A California appellate court affirmed a lower court’s decision that insurers’ selection of counsel to defend its insured, under a reservation of rights, created no conflict of interest to the insured’s detriment. Specifically, the insured was a supplier of dry cleaning chemicals and products and was sued in a third-party action concerning costs for monitoring and remediation of contamination.  The insured tendered the
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New Connecticut Law Allows Disaster Mediation Program for Property Insurance Claims

On June 21, Connecticut Governor Dannel Malloy signed into law Substitute House Bill No. 6549, Public Act No. 13-148, which allows the Connecticut State Insurance Department to set up a mediation program for insurance claims arising from a catastrophic event. The bill will allow for a program which permits policyholders to mediate property insurance claims which arise out of a catastrophic event, if the catastrophic event gives rise to a declared state of emergency. The law follows was designed after
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Second Circuit Confirms Standard That Insurer Not Obligated To Defend And Indemnify In $96 Million Defamation Claim

First Advantage Litigation Consulting LLC v. American International Specialty Lines Insurance Co. et al., U.S. Court of Appeals for the Second Circuit First Advantage Litigation Consulting LLC, (First Advantage) brought a declaratory judgment action against its insurers, American International Specialty Lines Insurance Co., Federal Insurance Co. and Zurich American Insurance Co. (collectively, insurers), seeking defense and indemnification in connection with a defamation action commenced by NuWave Investment Corp (NuWave). In 2006, NuWave sued First Advantage for $96 million in claimed
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No Prejudice, No Problem: Reinsurer Not Required to Show Prejudice in Late Notice Dispute

AIU Ins. Co. v. TIG Ins. Co. (S.D.N.Y. Mar. 25, 2013) On March 25, Judge Sidney H. Stein, of the USDC for the Southern District of New York, agreed with a magistrate report and recommendation and granted summary judgment to a reinsurer, ruling that the reinsurer did not have to show prejudice when denying coverage because of an insurer’s late notice of a claim. Foster Wheeler, a company that used asbestos in its products, was insured by Liberty Mutual Insurance
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Florida Widens Insurer’s Liability for Defense Costs

An intermediate appeals court in Florida held that an insurer’s decision to refuse separate independent counsel for an additional insured (AI) was wrong and awarded the AI indemnification for attorney’s fees and costs for independent counsel.  In University of Miami v. Great American Assurance Company, etc., (No. 3D09-2010, Florida Third District Court of Appeal), the insured ran a summer swim camp on the AI’s campus.  The claimant sued both entities for lack of supervision, claiming bodily injuries from being pulled
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NYS DFS Announces Sandy Mediation Program – New Requirements for Insurers

15th Amendment to Regulation 64, 11 NYCRR 216 The New York State Department of Financial Services has enacted an emergency amendment to Insurance Regulation 64, effective February 25, 2013, targeting claims resulting from Hurricane Sandy. The amendment applies to any claim for loss or damage, other than claims made under flood policies issued under the national flood insurance program, that occurred from October 26, 2012 through November 15, 2012, in the counties of Bronx, Kings, Nassau, New York, Orange, Queens,
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Insurer’s Reliance on (Overturned) Ruling in DJ Action Insulates against Further Claims of Breach of Contract

Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Seagate Tech. Inc. U.S.Dist. Ct.,N.D.Cal. A California federal judge recently held that an insurer did not breach its contract when it stopped defending a policyholder based on a trial court declaratory judgment ruling that was later overturned. The court explained that in the ordinary case, the duty to defend terminates upon a judicial determination that the insured does not have a potentially-covered claim. The decision granting summary judgment became such a
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United Kingdom Widens Scope For Contribution For Child Abuse Compensation

The Catholic Child Welfare Society and Others v. Various Claimants and The institute of the Brothers of Christian Schools and others.  United Kingdom Supreme Court, [2012] UKSC 56 Child abuse and its ramifications have been taking up a significant amount of British media attention over the past months. A case before the Supreme Court, the highest Court of Appeal, did not, however, receive many column inches. It does have serious ramifications for insurers and for clerical institutions. A priest and
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Court Reinstates Policy, Finds Application Ambiguous

Great Am. Ins. Co. v. Christy  (N.H. Sept. 28, 2012) An attorney in a two-partner law firm confessed to forging documents to misappropriate money from a client’s estate. The attorney entered into a settlement agreement with the estate in April 2007, setting forth a payment plan for the attorney to satisfy his obligations to the estate. A month later, the second partner at the law firm executed a renewal application for professional liability coverage on behalf of the law firm.
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