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On April 26, 2013, Chubb Insurance Co. submitted a motion requesting an en banc rehearing of a ruling which was handed down by the Ninth Circuit in March 2013. The ruling held that an insurer was not permitted to recover environmental cleanup expenses through subrogation under the Comprehensive Environmental Response Compensation and Liability Act (CERLCA) aka Superfund.

In the initial lawsuit, Chubb brought an action in California Federal District Courtto recover money it had paid for the cleanup of hazardous substances in the soil and …

April 17, 2013 Fraud

Former NFL Linebacker Indicted for Insurance Fraud

United States of America v. Marcus Buckley and Kimberly Jones, United States District Court Eastern District of California, April 10, 2013
Marcus Buckley, a former linebacker for the New York Giants and Atlanta Falcons, was charged his involvement in a $1.5 million insurance fraud scheme. He is alleged to have filed fraudulent claims with the New York Giants’ workers’ compensation program. The adjuster on Buckley’s claims, Kimberly Jones, was also charged with fraud.

During the time period Buckley played for the Giants, the Giants …

March 19, 2013 Policy Conditions, Considerations, Construction, and Formation

NFL Goes 0 for 2 Against Insurance Companies in Court

The National Football League is now 0-2. It lost yet another round on the legal gridiron last week when New York State Supreme Court Judge, Jeffrey K. Oing, ruled that the lawsuit between the NFL and its insurance companies could proceed in NY. This is despite the fact that the NFL filed a similar lawsuit in California first. This echoes a previous ruling by Los Angeles Superior Court Judge John Shepard Wiley Jr. who held last fall that California was the wrong venue to deal …

March 11, 2013 Policy Conditions, Considerations, Construction, and Formation

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 Maryland School for the Deaf …

February 20, 2013 Policy Conditions, Considerations, Construction, and Formation

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 judicial determination when judgment was …

December 21, 2012 Environmental

Second Circuit Finds Coverage For Environmental Claims Based on Continuing Damage Provision in Excess Policies

Olin Corporation v. American Home Assurance Co.
(2^nd Cir, December 19, 2012)

This environmental coverage dispute arises out of ground water contamination claims involving Olin’s Morgan Hill, California site, which had used the chemical potassium perchlorate in the manufacturing of signal flares beginning in 1956. Olin appealed from the district court granting summary judgment to the insurers on the ground that the attachment point for the excess insurance policies could not be reached by the alleged environmental damage at the site. Specifically at issue …

December 14, 2012 Reinsurance

No Unjust Enrichment or RESPA Violations in Suit Against HSBC

McCarn v. HSBC USA, Inc.
(E.D.Cal.Nov. 9, 2012)

On November 13, 2012, Judge Lawrence J. O’Neill of California’s Eastern District dismissed claims of unjust enrichment and allegations of Real Estate Settlement Procedures Act (RESPA) violations levied against HSBC USA Inc.’s reinsurance unit. The complaint, brought by a borrower, alleged that HSBC extracted kickbacks, which resulted in steeper premiums for borrowers. Last month, Judge O’Neill determined that the plaintiff had not adequately demonstrated that the one-year statute of limitations for RESPA claims and three-year statute of …

December 13, 2012 Environmental

New York Appellate Division Affirms Summary Judgment On Coverage For Manufacturer In Asbestos Suit Where Insurer Failed To Prove Expected Injury Exclusion In Policy

Union Carbide Corp. v. Affiliated FM Ins. Co.
(Supreme Court, Appellate Division, First Department, December 6, 2012)

This environmental coverage dispute arises out of an underlying asbestos claim. The trial court granted Union Carbide
partial summary judgment striking the insurer’s defense that there was no coverage for the claims because the manufacturer expected or intended the bodily injury that resulted from exposure to its asbestos products.

The insurer asserted that Union Carbide intended the damages because it knew that asbestos would cause injuries and that …