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Washington District Court Addresses Insured’s Right To “All Risk” Coverage When A Loss Is Not Fortuitous

By Richard K. Traub posted 05-11-2018
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​ In   Mkt. Place North Condo. Ass’n v. Affiliated FM Ins. Co. , No. C17-625 RSM, 2018 U.S. Dist. Lexis 76724 (W.D. Wash. May 7, 2018), the United Stated District Court for the Western District of Washington found in favor of Affiliated FM Insurance Company (“AFM”) on the insured’s Motion for Summary Judgment, finding that coverage under an “all risk” insurance policy may be in dispute if evidence shows that the loss was not unforeseen. The insured purchased and maintained “all risk” property insurance policies from AFM from 2005 through 2016. During renovations to the outdoor deck of the Condominium, the insured discovered water intrusion damage throughout ...
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Kansas Federal Court Applies Prejudice Requirement to Pollution Buy-Back Endorsement

By Richard K. Traub posted 05-11-2018
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​ In its recent decision in   PetroSantander (USA), Inc. v. HDI Global Ins. Co ., 2018 U.S. Dist. LEXIS 59696 (D. Kan. Apr. 9, 2018), the United States District Court for the District of Kansas, applying Texas law, had occasion to consider whether an insurer need be prejudiced based on an insured’s untimely reporting under a pollution buy-back endorsement. HDI insured PetroSantander under a general liability policy with a limited pollution liability buy-back endorsement, affording coverage for pollution incidents of a limited temporal duration and only then when reported to HDI within 120 days after the incident first becomes known to the insured.  PetroSantander ...
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New York Court Holds Pollution Exclusion Inapplicable to 9/11 Claims

By Richard K. Traub posted 05-11-2018
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​ In its recent decision in National Union Fire Insurance Co. of Pittsburgh, PA v. Burlington Ins. Co., 2018 N.Y. Misc. LEXIS 1503 (Sup. Ct. NY Co. Apr. 27, 2018), the Supreme Court of New York for New York County considered whether the total pollution exclusion applied with respect to an underlying bodily injury suit brought individuals claiming injury as a result of exposure to toxic conditions at the World Trade Center site in the immediate aftermath of September 11, 2001. Burlington issued a primary policy and National Union issued a commercial umbrella policy to one of the contractors that aided in the cleanup recovery after September 11, 2001. The insured ...
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Florida Court Finds Constant or Repeated Seepage or Leakage Exclusion Ambiguous

By Richard K. Traub posted 04-04-2018
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​ In Hicks v. American Integrity Insurance Company , 43 Fla. L. Weekly D 446 (Fla. 5th DCA 2018), the Fifth District reversed summary judgment in favor of American Integrity, finding that the trial court misapplied a policy provision excluding damages caused by “constant or repeated seepage or leakage of water over a period of 14 or more days.”  The insured purchased an “all risk” homeowners policy from American Integrity.  While the insured was out of town, the water supply line to the refrigerator began leaking.  The leak was slow at first, then steadily increased.  By the time the insured returned home, the supply line was discharging nearly one thousand ...
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Seventh Circuit Finds Policy Limits Cap Insurer’s Exposure On An Excess Verdict Despite Improperly Denying A Duty To Defend

By Richard K. Traub posted 04-04-2018
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​ In Hyland v. Liberty Mut. Fire Ins. Co. , 2018 U.S. App. LEXIS 6460 (7th Cir. March 15, 2018), the United States Court of Appeals for the Seventh Circuit considered whether a liability insurer could be saddled with the full amount of an excess verdict against its insured when it improperly failed to defend the insured in an underlying suit.  Liberty Mutual issued an automobile policy that covered a vehicle driven by Michiah Risby as well as anyone driving the vehicle with Risby’s permission.  The vehicle was involved in an accident while Miquasha Smith was driving and passenger Monteil Hyland was injured.  Smith asserted that Risby gave her permission to ...
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Cyber Breach-Related Shareholder Suit Against Yahoo Settles for $80 Million. Is this the Start of a Trend?

By Richard K. Traub posted 04-04-2018
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​ It was inevitable. Heretofore, a majority of public companies that experienced a cyber breach, followed by a shareholder suit alleging either a violation of Section 10(b) of the Securities Exchange Act of 1934 or a breach of the company’s directors and/or officers fiduciary duties, either prevailed on their motions to dismiss, leaving their shareholders with no economic or corporate governance recourse, or settled for what some might consider a relatively nominal sum. For example, shareholders have been unsuccessful in prosecuting such claims in cases involving TJ Maxx, Heartland Payment Systems and Wyndham, wherein the courts, for various reasons, all dismissed ...
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"Me Too" may mean "More Suits"

By John E. Hall, Jr posted 03-22-2018
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​ The "Me too" may result in more allegations of sexual harassment or discrimination in the work place to be filed. Companies need to be prepared to address claims on a legal, factual and public relations level. Now is the time to be sure you have a EPL policy in place and have adequate limits not undermined by defense cost reductions.  Preventative efforts to be sure there are strict non-discrimination and harassment internal procedures in place with a "safe" reporting environment are a must.  IN addition, a campaign to emphasis "no tolerance" positron can be a plus.
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Time for a "Full Stop" Review in the Trucking industry.

By John E. Hall, Jr posted 03-22-2018
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​ Trucking safety Rules , such as the April deadline to log drivers hours electronically are being identified as a factor contributing to the  nationwide trucking shortage. Fright volumes are up in the robust economy. Regulations and increase in volume will result in a spike of accident liability, regulatory matters, worker's comp and employment matters. Companies should use this as a reminder to review risk precautions and verify adequate Insurance coverages.
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New York Court Addresses Coverage for School District’s Alleged Civil Rights Violations

By Richard K. Traub posted 03-13-2018
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​ In its recent decision in Graphic Arts Mut. Ins. Co. v. Pine Bush Central School District , 2018 N.Y. App. Div. LEXIS 1553 (N.Y. 2d Dep’t Mar. 9, 2018), the Second Department of the New York Appellate Division had occasion to consider a general liability insurer’s indemnity obligations with respect to a lawsuit alleging that the insured school district failed to adequately address anti-Semitic acts committed against students. The Pine Bush Central School District and several individual administrators were named as  defendants in a suit brought by five students alleging that their civil rights had been violated as a result of defendants having been “deliberately ...
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Self-Driving Semi-Trailer Trucks: An Exercise in Futility or a Future Reality?

By Richard K. Traub posted 03-13-2018
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​Reminiscing of the days of afternoon cartoons, The Jetsons futuristic society always seemed far-fetched and nothing more than fantasy. Fast forward 30+ years… while the concept of a flying car still seems far off, innovations in technology have brought the reality of autonomously driven vehicles closer than ever. Automobile manufacturers, ride-sharing companies and Silicon Valley are all in, and this is equally true for the trucking industry, with Mercedes Benz, Tesla, Walmart, Waymo and Uber currently experimenting with autonomous semi-trailer trucks. Uber, for instance, has successfully tested autonomous semi-trailer trucks on long distance hauls in Arizona. ...
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New Mexico Enacts Data Breach Notification Statute

By Richard K. Traub posted 03-06-2018
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​ New Mexico has become the 48 th state to adopt a data breach notification statute. The Data Breach Notification Act, known as H.B. 15, went into effect on June 16, 2017.   This new law applies to unencrypted computerized data as well as encrypted computerized data where the encryption code has also been compromised. It also applies to biometric data. Biometric data is defined to include any measurement of an individual’s fingerprints, voice, iris or retina patterns, hand geometry or facial characteristics that can be used to authenticate identity in order to access a device, account or physical location.   Pursuant to New Mexico’s statutory mandate, ...
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New York Court Enforces Construction Management Exclusion

By Richard K. Traub posted 02-27-2018
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​ In its recent decision in Houston Cas. Co. v. Cavan Corp. of NY, Inc ., 2018 N.Y. App. Div. LEXIS 1138 (N.Y. 1 st Dep’t Feb. 20, 2018), a New York appellate court had occasion to consider the application of a construction management exclusion in a general liability policy. Houston Casualty’s insured, Cavan, was a contracted construction manager for a building project in New York City.  Cavan later sought coverage in connection with an underlying worksite personal injury action in which Cavan was identified as “the general contractor and/or construction manager” for the project. Houston Casualty denied coverage on the basis of a policy exclusion titled ...
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Illinois Court Addresses Insured’s Entitlement To Replacement Cost Coverage

By Richard K. Traub posted 02-23-2018
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​ In the recent case of Libman v. Great Northern Ins. Co ., 2018 U.S. Dist. LEXIS 24580 (N.D. IL February 15, 2018), the Court addressed whether a property owner was entitled to replacement cost coverage for loss at an insured location which took place subsequent to the property’s foreclosure and agreement for short sale but prior to a short sale of the property closing.  Although the insured performed remediation work prior to the short sale, the insureds did not otherwise repair the property.  Regardless, the insureds were able to sell the property after it was damaged for the same benefit as was agreed to prior to the damage.  Great Northern issued a property ...
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Colorado Court Holds No Coverage for Breach of Contract Claim

By Richard K. Traub posted 02-23-2018
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​ In its recent decision in Ctr. For Excellence in Higher Ed., Inc. v. Travelers Prop. Cas. Co. of Am ., 2018 U.S. Dist. LEXIS 25424 (D. Col. Feb. 16, 2018), the United States District Court for the District of Colorado had occasion to consider whether a breach of contract claim could qualify for coverage under a general liability policy. Travelers’ insured, the Center for Excellence in Higher Education, was the lessee of a commercial property.  The lease required it to maintain the property in good order and specifically required it to maintain, repair, and if necessary replace, the building’s roof and HVAC system.  During the Center’s tenancy, the roof ...
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California Supreme Court Holds that the Right to Repair Act is a Homeowner’s Exclusive Remedy for Damages Arising from Construction Defects for New Residential Construction

By Richard K. Traub posted 02-23-2018
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​ In McMillin Albany LLC et al. v. The Superior Court of Kern County (Van Tassel) [Case No. S229762] , the California Supreme Court held that California Civil Code §§ 895 et seq . (the “Right to Repair Act”) provides the exclusive remedy for construction defect claims for economic loss and resulting property damages arising from new residential construction. The Supreme Court also held that homeowners are required to engage in the pre-litigation notice and cure procedures under the Right to Repair Act. The long-awaited holding in McMillin resolved a split in authority among the California Court of Appeals, and effectively overruled the holdings in Liberty ...
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Oklahoma Supreme Court Allows Recovery of Declaratory Judgment Fees

By Richard K. Traub posted 02-14-2018
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​ In its recent decision in JP Energy Mktg., LLC v. Commerce & Industry Ins. Co. , 2018 OK 11 (Ok. Feb. 5, 2018), the Supreme Court of Oklahoma had occasion to address an insured’s right to recovery legal fees and expenses associated with prosecuting a declaratory judgment action against an insurer. Having prevailed in its declaratory judgment action against its insurers, JP Energy sought recovery of its fees and costs pursuant to 36 O.S.2011 §3629, which states: A.  An insurer shall furnish, upon written request of any insured claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such ...
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New York Court Holds No Coverage for Criminal Proceeding

By Richard K. Traub posted 02-09-2018
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​ In its recent decision in   Certified Environmental Services, Inc. v. Endurance Am. Ins. Co ., 2018 N.Y. App. Div. 704 (4 th   Dep’t Feb. 2, 2018), the Supreme Court of New York, Appellate Division, Fourth Department, had occasion to consider whether a liability insurer had coverage obligations with respect to an underlying criminal proceeding. Certified Environmental Services sought coverage under a series of packaged liability policies affording coverage for professional liability, contractors pollution liability, and general liability matters.  Specifically, it sought reimbursement of defense costs and indemnification in connection with a federal criminal ...
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Eleventh Circuit Holds Insurer Not Liable for Defense Counsel’s Malpractice

By Richard K. Traub posted 01-31-2018
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​ In its recent decision in Kapral v. GEICO Indemnity Co ., 2018 U.S. App. LEXIS 1937 (11 th Cir. Jan. 23, 2018), the United States Court of Appeals for the Eleventh Circuit, applying Florida law, had occasion to consider under what circumstances an insurance carrier can be held liable for the acts or omissions of counsel it retains to defend its insured. The underlying lawsuit giving rise to the dispute in Kapral arose out of a car accident involving GEICO’s insured, Cory Kapral.  Upon receiving notice that Mr. Kapral had been sued, GEICO advised that it would be providing Mr. Kapral with a defense by a salaried GEICO litigation attorney.  The suit ...
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Second Circuit Holds §3420(d) Inapplicable to Denial of Coverage

By Richard K. Traub posted 01-31-2018
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​ In its recent decision in Citizens Ins. Co. of Am. v. Risen Foods, LLC, 2018 U.S. App. LEXIS 1371 (2d Cir. Jan. 22, 2018), the United States Court of Appeals for the Second Circuit had occasion to consider the scope of New York Insurance Law §3420(d). §3420 is one of New York’s primary insurance statutes, governing topics ranging from disclaimers of coverage based on late notice to direct actions by claimants. §3420(d) governs the manner in which insurers are required to disclaim coverage for matters involving bodily injury. In particular, for disclaimers based on policy exclusions or conditions, involving insurance policies issued or delivered in New ...
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West Virginia Court Allows Rescission of Professional Liability Policy

By Richard K. Traub posted 01-31-2018
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​ In its recent decision in ALPS Prop. & Cas. Ins. Co. v. Turkaly , 2018 U.S. Dist. LEXIS 5026 (S.D. W.Va. Jan. 11, 2018), the United States District Court for the Southern District of West Virginia had occasion to consider the circumstances under which rescission of an insurance policy is permissible under West Virginia law. ALPS insured Michael Turkaly under a series of claims made lawyers professional liability policies.  The first policy was in effect for the period September 1, 2015 to August 31, 2016, and the renewal policy became effective upon the expiration of the first policy.  Mr. Turkaly stated in his renewal application that he was unaware ...
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