Category: Policy Conditions, Considerations, Construction, and Formation

RLI INSURANCE COMPANY v. STEELY

(N.Y.A.D. 2^nd Dept., August 4, 2009)

An insured maintained a primary homeowner’s policy and a separate umbrella policy, issued by separate insurers. He was sued in connection with a boating accident.  The primary homeowner’s insurer disclaimed, citing an exclusion relating to the insured’s ownership of the boat.  The umbrella insurer sued, seeking a declaration that the exclusion was inapplicable and that its policy was excess.  The primary homeowner’s insurer moved to dismiss, citing the umbrella …

SR International Business Insurance v. Port Authority el al

(2^nd Circuit, July 28, 2009)

In the ongoing coverage litigation relating to the World Trade Center tragedy, SR International Business Insurance Co., Ltd. v. Allianz Insurance Company,   the Second Circuit, applying New York law, held that a dispute between the insurer and the insured regarding priority of recovery for World Trade Center losses was ripe for adjudication.  The insured claimed that the matter was un-ripe because, among other things, it was …

In re September 11 Litigation Consolidated Edison Co. of N.Y., Inc. v. Port Auth. of N.Y. & N.J. (S.D.N.Y. July 27, 2009)

 A federal judge has ordered the Port Authority of New York and New Jersey to pay $17.6 million to Consolidated Edison and its insurers for property damage sustained during the September 11^th attacks on the World Trade Center. In 1968, Con Ed and the Port Authority entered into a lease and electrical supply agreement wherein the Port Authority granted Con Ed …

Gargano v. Liberty Int’l Underwriters, Inc.

(1^st Cir. (Mass.) July 14, 2009)

An attorney sued the policyholder, also an attorney, after the policyholder failed to pay an attorney’s lien for work the plaintiff attorney completed on a case ultimately transferred and settled by the policyholder. The plaintiff attorney filed suit in March 2005 and entered judgment against the policyholder in July 2007. After judgment was entered, the policyholder reported the claim to his three professional liability insurers, which had issued three consecutive “claims-made-and-reported” policies …

American Legacy Foundation v. National Union Fire Ins.

(D.C. Delaware, July 9, 2009)

The District Court of Delaware held that the plaintiff was not entitled to defense costs associated with a declaratory judgment action it commenced involving a Master Settlement Agreement (MSA) involving several tobacco companies.   Arguing the plaintiff was disseminating “false and misleading” information, one tobacco company threatened legal action against the plaintiff, including claiming that it breached the MSA “vilification” provision.  The plaintiff, in turn, commenced a declaratory judgment action and the tobacco company …

On July 6, 2009, Dragas Management Corporation ("Dragas"), named in the lawsuit filed in Eastern District of Virginia allegedly as the developer of residential homes in a developmental complex which installed imported Chinese Drywall material, filed a Third-Party Complaint against Hanover Insurance Co. and Citizen Insurance Company of America seeking insurance coverage under the commercial general liability and umbrella insurance policies they issued to the subcontractor.

According to the Third-Party Complaint, Dragas alleges the agreements with the subcontractor "fall squarely within the conditions designating Dragas as an …

Legacy Group of America, Inc. v. North American Company For Life And Health Insurance (2d Cir. July 8, 2009)

In an action successfully handled by the authors, the Second Circuit affirmed the district court's decision granting summary judgment in favor of the insurer together with awarding legal fees and expenses.  The action centered on a solicitation agreement executed by the parties in October of 1993 in which the plaintiffs were granted the authority to solicit applications for insurance policies as well as place application with the insurer pursuant to some conditions.  In exchange, the insurer agreed to …

St. Paul Fire & Marine Ins. Co. v. ERA Oxford Real Estate Co. et. al.

(United States Court of Appeals, Eleventh Circuit, June 23, 2009)

The insurer appealed an order from the United States District Court for the Northern District of Alabama holding that a professional liability insurance policy issued by the insurer to a real estate company obligated the insurer to provide a legal defense for certain fraud, deceit, and antitrust claims pending in state court against the insured.    Specifically, the policy …

P.J.P. Mechanical Corp., v. Commerce and Industry Ins. Co., 2009 NY Slip Op 04984 (App. Div. June 18, 2009)

The policyholder purchased a commercial general liability policy from the insured which covered work it was performing for the third-party general contractor.  A pipe burst in one of the houses that the policyholder worked on and the general contractor alleged it was due to the negligence of the policyholder.  No suit was instituted but the general contractor withheld the remaining contract balance owed to …

Supervalu Inc. v. Wexford Underwriting Managers, Inc.

(Cal.Ct.App. June 22, 2009)

The court affirmed summary judgment in favor of the insurers, upholding the insurers' interpretation of “occurrence” related to excess workers' compensation policies.  Plaintiff was required to pay a self-insured retention every time a worker sustained injury due to an accident or occupational disease, which is the occurrence triggering coverage.  The court held that “occurrence” refers to the cause of employee damage, rather than loss to the insured. 

For a copy of …