Another Victory for Insurers in Litigating the Scope of Coverage B: District Court Rejects Duty to Defend Against Alleged Violations of Data Privacy Laws

In National Union Fire Insurance Company of Pittsburgh, PA v. Coinstar, Inc. (W.D. Wash., No. C13-1014-JCC, Aug. 7, 2014), the U.S. District Court for the Western District of Washington ruled that National Union Fire Insurance Company of Pittsburgh, PA had no duty to defend Redbox Automated Retail, LLC (Redbox), a Coinstar, Inc. subsidiary, in two separate class action suits alleging that Redbox violated its customers’ privacy.  Notably, the first class action suit, Cain v. Redbox, alleged that Redbox violated Michigan’s Video Rental Privacy Act …

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Excess Carrier Has Equitable Subrogation Rights Against Primary Carrier For Not Settling Within Policy Limits

On September 19, 2007, claimant William Kelly was injured while descending a stairway in Hawthorne, California. Kelly sued F. H. Paschen, Inc., the general contractor for a construction project on the stairway.

In the ensuing declaratory judgment action, Paschen’s excess carrier, Westchester Fire Insurance Company (Westchester), alleged that Paschen’s primary insurer, Zurich American Insurance Company (Zurich), failed to notify Westchester of the litigation and failed to settle the underlying case within the $1 million primary policy limits. Westchester sought to recover $700,000 it paid on …

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Force-Placed Meets the Feds – The Insurance Regulatory Field Grows

Recent news regarding lender-placed insurance (more colloquially known as “force-placed” insurance) has focused on state efforts to regulate the industry. Now the Feds are getting involved, specifically the Federal Housing Finance Agency (FHFA).  FHFA is now prohibiting servicers of mortgages issued by Fannie Mae and Freddie Mac from receiving any compensation from those insurers providing the force-placed coverage. Fannie Mae and Freddie Mac write over 60 percent of all mortgages in the U.S. As such, this action is going to impact a large segment of …

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Tolling Agreements Cause Coverage Concern

An insurance coverage dispute has arisen in connection with litigation involving a robotic surgery medical device maker. A declaratory judgment action seeking rescission of product liability insurance policies issued to the manufacturer was filed in the U.S. District Court for the Northern District of California. If successful, the insurer may avoid obligations under its primary and excess insurance policies providing $15 million per occurrence and $50 million aggregate.

To read the rest of this article, authored by Sean T. Stadelman,  please visit Life Science

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Rule Followed by NY Federal Court for Damages Outside NY

Indian Harbor Insurance Company v. The City of San Diego 
(Case No. 12-cv-5787) (S.D.N.Y., September 25, 2013)

A New York federal court continued to honor the line of New York cases that stand for the proposition that a showing of prejudice is not required for the late notice defense on policies issued or delivered prior to January 17, 2009.

This case arose as a result of multiple underlying claims made against a California State municipality by two homeowners associations and a real estate construction company.  …

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Cases for the September 2013 Edition of CaseWatch: Insurance and Bad Faith Focus

Cases provided courtesy of LexisNexis.

CaseWatch: Insurance Cases

Admiral Ins. Co. v. Shah & Associates

Admiral Insurance Company v. Marsh

Alabama Gas v Travelers

Aleman v. Ace Am. Ins. Co.,

Allstate Ins. Co. v. Nassiri

Attorneys Liability Protection Society, Inc. v. Whittington Law Associates, PLLC

Automax Hyundai South, L.L.C. v. Zurich Am. Ins. Co.

Ba v. HSBC USA, Inc.

California Ass’n of Rural Health Clinica; Avenal Community Health Center v. Douglas

City of San Buenaventura v. Ins. Co.

Colonial Oil Industries, Inc. v. Indian Harbor

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No Coverage For Nightclub Dancer Set on Fire by Patron

Mount Vernon Fire Ins. Corp. v. Oxnard Hospitality Ent. Inc.,
Court of Appeal of the State of California, Second Appellate District, Division Three (September 16, 2013)
An employee of the insured appealed a California trial court decision which held that Mount Vernon had no duty to cover a $10 million award. The award was granted to the employee after she was set on fire by a third party at the insured’s bar.

The employee sued her employer and others for negligence after she sustained serious …

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Challenge to Regulations on Required Use of Death Master File

United Ins. Co. of Am. v. Boron
Cir. Ct.of Cook County, Illinois (Sept. 4, 2013)
Three life insurers have filed an action seeking declaratory and injunctive relief from the Illinois Department of Insurance Regulations that impose an obligation on life insurers to utilize the Social Security Death Master File to ascertain whether its insureds are deceased and benefits owed to their beneficiaries under policies issued in the State of Illinois.

The insurers claim that under the Insurance Code an insurer is required to settle and …

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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 defense and indemnity of the …

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Insurer’s Environmental Subrogation Claims Under CERCLA §107(a) Dismissed

Chartis Specialty Ins. Co. v. United States Of America
(U.S.D.C. Northern District of California, July 19, 2013)

This environmental coverage action arises from a dispute as to whether an insurer can maintain an action under CERCLA’s subrogation provisions against the United States government where it is alleged the government is responsible for environmental contamination at a site in which the plaintiffs have been paying clean-up costs.  Specifically, the plaintiffs, Whittaker Corporation, and its insurer, Chartis, brought claims under §107(a) of CERCLA seeking to recover all …

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