Delaware has a three-year statute of limitations period for the filing of a bad faith claim. In Homeland Ins. Co. of New York v. CorVel Corp., 197 A.3d 1042 (Del. 2018) the Court held that the limitations period began to run when the insured could plead a bad faith claim and not when the Court ultimately determined contested coverage.
WHEN DOES A STATUTORY BAD FAITH CLAIM ACCRUE UNDER DELAWARE LAW?
TOO LATE!
The Colorado Supreme Court in Schultz v. GEICO Casualty Co., 429 P.3d 844 (Colo. 2018) recently held that later-developed evidence was irrelevant to a UIM claim because the denial had taken place prior to the development of that evidence. In this case, the insured, Charissa Schultz, needed multiple knee replacement surgeries after a motor vehicle accident caused by an underinsured motorist. After settling with the tortfeasor's insurer, GEICO paid its UIM policy limits two years after the tortfeasor payment. Schultz then sued GEICO, alleging unreasonable payment delay. During the processing of the UIM claim, GEICO requested an IME, which was objected to by Schultz. Schultz claimed that the request was made too late. However, the trial court ordered the IME to proceed.
9th Circuit Requires That Any Illness or Infirmity Causing or Contributing to Injury For Purposes of Accidental Death and Dismemberment Benefits Had to be a Substantial Cause of the Loss to Avoid Coverage
In Dowdy v. Metro. Life Ins. Co., 890 F.3d 802 (9th Cir. 2018), the insured sought benefits under an accidental death and dismemberment policy for an amputation of his leg resulting from a car accident. The leg was seriously injured as a result of the accident and was then later amputated. The policy provided that a covered loss was a loss that was a direct result of an accidental injury, independent of other causes. In deciding to deny the claim, Met Life relied upon a surgical report stating that due to comorbidities, as well as non-healing wounds and osteomyelitis, the patient had elected to undergo an amputation of the leg. Based upon the surgical report, Met Life concluded that the amputation was contributed to and complicated by the insured's diabetes and that, under the terms of the policy, a loss caused or contributed to by an illness or treatment for that illness was excluded from payment.
How Many Car Accidents Does It Take To Constitute An Occurrence?
An interesting case from the Fifth Circuit Court of Appeals considered the question of how many collisions constitute a single occurrence. In Evanston Ins. Co. v. Mid-Continent Casualty Co., 909 F.3d 143 (5th Cir. 2018) the Fifth Circuit Court of Appeals held that a series of automobile collisions constituted a single occurrence because each collision had a common cause and further, because there was no intervening event that was the immediate cause of damage. According to the Court, there was a single uninterrupted chain of events and therefore one accident.
Untimely Ror Letter Leads To Estoppel
Recently the Kansas Supreme Court held that the insurance company's untimely reservation of rights letter estopped the insurer from denying coverage. In Becker v. The Bar Plan Mutual Insurance Co., 419 P.3d 212 (Kan. 2018), the trial court ruled that the insurance company that had issued the attorney's claim made professional liability policy had no duty to defend a claim made before the policy's inception, notwithstanding the insurance company's failure to reserve its rights to deny coverage in a timely manner. The trial court found that coverage could not be expanded by estoppel. However, the Kansas Supreme Court disagreed.
Timing Is Everything When It Comes To Malicious Prosecution Coverage
The Illinois Supreme Court in First Mercury Ins. Co. v. Ciolino, 107 N.E.3d 240, appeal denied, 108 N.E.3d 840 (Ill. 2018), considered when a malicious prosecution claim became an "offense" for purposes of insurance coverage and whether the claim fell within the subject policy. The Court found that when dealing with malicious prosecution claims, the date of occurrence for triggering coverage was the date that the prosecution commenced and not the date on which plaintiff was exonerated. The Court noted that the use of the term "offense" in the policy did not demonstrate the intent of the parties that coverage would only be triggered upon the fulfillment of all elements of the tort of malicious prosecution under Illinois law. The Court found that coverage was dependent upon whether the insured's offensive conduct was committed during the policy period, irrespective of whether there had been an accrual of the malicious prosecution tort.
Choose Your Own Poison
The Washington Court of Appeals recently adopted a choose your own poison approach to cases where an insurer exhausts its policy limits in settlement of one claim while other related claims remain unresolved. In Singh v. Zurich American Ins. Co., 428 P.3d 1237 (Wash. App. Div. I, 2018) the court found that an insurance company's fiduciary duty may preclude the insurer from exercising policy rights.
Illinois Court Treats SIR As A Primary Policy Requiring Exhaustion
In Lamorak Ins. Co. v. Kone, Inc., 2000 Ill. App. (1st) 163398 (Ill. App. May 15, 2018), the Illinois Appellate Court found that in policies containing self-insured retentions, that the SIR was to be treated as a primary policy that had to be exhausted before the insured could tap into the excess layer of coverage.
Is The Insurer Obligated To Notify The Insured Of Any Inadequacy Of Automobile Liability Coverage?
The question of whether an insurance company had an obligation to provide advice to the insured on the adequacy of liability coverage was recently addressed by the Washington Court of Appeals in Junfang He v. Norris v. Farmers Ins. Co. of America, 415 P.3d 1219 (Wash. App. Div. I, 2018). In this case, the Washington Appellate Court found that there were insufficient grounds to support the insured's claim that the insurance company was responsible for inadequate bodily injury limits that the insured purchased.
In For One, In For All Rule Does Not Apply To Title Insurers In Pennsylvania
Under the so-called "in for one, in for all" rule, if there is one covered claim on a multi-count complaint while other claims are not covered, the insurer is required to defend the entire action. Recently, the US Court of Appeals for the Third Circuit in Lupu v. Lone City, LLC, 903 F.3d 382 (3rd Cir. 2018) (interpreting Pennsylvania law) held that a title insurer was entitled to limit its duty to defend only to covered claims. The court found that title insurance policies differed from general liability policies because title insurance policies are limited to loss from defects that cloud or invalidate a title. Because title insurers cover past defects in title, title insurers were entitled to limit their risk by searching the public records before issuing a policy. This was different than general liability insurance which typically provided insurance against future events. Additionally, general liability insurance companies typically promise to defend "a suit" or "any suit" seeking damages for covered acts or omissions. In contrast, title insurers promise to defend only claims arising from defects in title.
