Are You My Agent? Insured’s Notice to Broker Deemed Sufficient

In First Chicago Insurance Company v. Molda and Wilson, 2015 IL App. (1st) 140548, First Chicago appealed an adverse verdict finding that it had a duty to defend its insured in the underlying lawsuit. The Appellate Court affirmed the district court’s ruling, finding, in pertinent part, that the insured’s notice of the claim and suit were proper and timely. The insured’s employee, Molda, was involved in an automobile collision while driving as a salesman for the policyholder, Metrolift. First Chicago
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New York Appellate Division Finds No Coverage Under Bond For Losses Arising From Madoff’s Ponzi Scheme

In Jacobson Family Investments, Inc. v. Nation Union Fire Insurance Co. of Pittsburgh, PA, 2015 N.Y. App. Div. LEXIS 5175 (1st Dep’t; June 18, 2015), the New York Appellate Division, First Department reversed the Supreme Court, New York County’s decision and found that National Union Fire Insurance Company of Pittsburgh, PA is not required to pay the claimant for losses arising out of Bernie Madoff’s infamous Ponzi Scheme. National Union provides coverage to the insured pursuant to a Financial Institute
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Blast from the Past: First Circuit Reverses Dismissal of Coverage Dispute Concerning 50-Year Old Missing Policy

In Cardigan Mountain School v. New Hampshire Insurance Co., 2015 U.S. App. LEXIS 8725 (1st Cir. May 27, 2015), the U.S. Court of Appeals for the First Circuit reversed the dismissal of an action based on events that occurred nearly 50 years ago, nixing the ruling that the lawsuit failed to state a claim under Rule 8 of the Federal Rules of Civil Procedure. The First Circuit instead held that the complaint survives dismissal by pleading the existence of an insurance
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Total Frat Move: Eastern District of Arkansas Holds CGL Policy’s Exclusions Preclude Coverage for Injuries Arising Out of Hazing

In Admiral Insurance Co. v. Bradley, 2015 U.S. Dist. LEXIS 70490 (E.D. Ark., June 1, 2015) a federal judge sitting in the U.S. District Court for the Eastern District Court addressed whether a fraternity and individual fraternity members were entitled to coverage under a standard CGL policy for injuries sustained by a pledge of the fraternity on the night of his initiation. The underlying claimant alleged that he was caned, paddled, and hit by the fraternity’s members, resulting in his being
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Wisconsin Supreme Court Determines Notice-Prejudice Rule Does Not Apply To Claims-Made-and-Reported Requirement

In Anderson v. Aul, 2015 WI 19 (2015), the Wisconsin Supreme Court reversed the decision of the court of appeals and held that Wisconsin’s notice-prejudice statutes did not apply to the reporting requirements in claims-made-and-reported policies. The underlying case involved a malpractice lawsuit filed by Melissa and Kenneth Anderson against their former attorney, Thomas Aul, alleging that Mr. Aul continued to represent the Andersons in a purchase of commercial property transaction, although he had an unwaivable conflict of interest. On December
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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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Lead Paint is Not an Excluded Pollutant in CGL Pollution Exclusion

In a personal injury action involving ingestion of lead-based paint in the house the claimant rented from the insured, the majority of the First Division Georgia Court of Appeals held that a policy’s pollution exclusion does not bar coverage for underlying personal injury claims, because lead-based paint was not specifically listed as a pollutant in the policy. Therefore, the exclusion did not exclude coverage for injuries arising out of the ingestion or inhalation of lead-based paint. This decision reversed the
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After Hours: New Jersey Superior Court Holds Definition of Employee and Exclusion for Employee’s Criminal Acts Both to be Unambiguous

In Union Hill Supremo Pharmacy v. Franklin Mut. Ins. Co., No. L-705-13 (N.J. Super. Ct. App. Div., March 4, 2015) the Superior Court of New Jersey, Appellate Division decided that an insurance policy’s definition of “employee” was unambiguous. The court further held that a part-time employee fell within the definition of “employee” and that a policy exclusion based on an “employee’s” criminal acts applied even when the employee was not working at the time of the crime’s commission. The insured,
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No Coverage for Fraudulent Withdrawal of Electronic Funds

In Metro Brokers, Inc. v. Transp. Ins. Co., 2015 U.S. App. LEXIS 3473 (11th Cir. Ga. Mar. 5, 2015) an all risk policy was held to not provide coverage to an insured real estate brokerage company for online fraudulent withdrawals from the company’s bank account. On December 10, 2011, thieves logged into the insured’s online banking system and authorized payments totaling over $188,000 from the insured’s escrow account to several other bank accounts. They had used a virus known as “Zeus” to
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Colorado Supreme Court Holds Notice-Prejudice Rule Inapplicable to Notice Requirement in Claims-Made Policies

In Craft v. Philadelphia Insurance Co., 2015 CO 11 (Feb. 17, 2015), the Colorado Supreme Court held that the notice-prejudice rule (an insured who gives late notice of a claim to his/her insurer does not lose coverage benefits unless the insurer proves resultant prejudice) does not apply to claims-made insurance policies with date-certain notice requirements. In the underlying action, Dean Craft was the principal shareholder and present of Campbell’s C-Ment Contracting, Inc. (“CCCI”). Craft agreed to sell some of his
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