In Wireless Buybacks, LLC v. Hanover American Insurance Co., 223 F.Supp.3d 443 (2016) the court held that Hanover had no duty to defend its insured under its policy's coverage for product disparagement against allegations that the insured had unlawfully acquired and then resold Sprint smart phones. The insured, Wireless Buybacks, LLC, purchased a CGL policy through Hanover which contained "personal and advertising injury" coverage. This coverage applied to injuries arising out of product disparagement.
Allegations That The Insured Unlawfully Acquired And Resold Sprint Phones Did Not Constitute Product Disparagement
Timing is Everything
The West Virginia Supreme Court holds that when the insurance company is fulfilling its duty to defend, courts had no jurisdiction to adjudicate the bad faith claim.
Minnesota Court Finds Insurer Could Not Rescind Policy Notwithstanding Insured's Agent's Knowledge of Her Own Embezzlement at Time of Application
In Minnesota insurers are entitled to rescind their insurance policy when an application contains a material misrepresentation that increases the risk of loss. In National Credit Union Administration Board v. Cumis Insurance Society, Inc., 241 F.Supp.3d 934 (D. Minn. 2017) the court held that a credit union's employee's misrepresentations on the Fidelity Bond application regarding her own fraud could not be imputed to the credit union for purposes of coverage for the agent's embezzlements.
Oregon Court Upholds Suit Limitation Clause Where the Insurance Company Did Nothing to Prevent the Insureds From Suing in a Timely Fashion
In Brockway v. Allstate Property & Casualty Insurance Co., 284 Or. App. 83, 391 P.3d 871 (2017) the Oregon Court of Appeals upheld a suit limitation clause in Allstate's policy thereby upholding the dismissal of the insured's claim against Allstate. The Brockway case involved a first-party property homeowners claim in which the homeowners sought coverage for a hole that was cut into the insured's backyard fence and associated stolen personal property. During Allstate's investigation of the claim, the Brockways/homeowners asserted that they discovered additional losses from the fence episode. A year following the loss Allstate requested from the Brockways a sworn proof of loss and advised them regarding the statute of limitations on their claim as per the policy's suit limitation clause. Allstate also advised the Brockways that it had done nothing in the handling of their claim that could result in an estoppel or waiver of any coverage defense. In February 2012 Allstate denied coverage for the claim, asserting misrepresentation, noncooperation, and the passage of time. Thereafter the Brockways filed suit against Allstate. In the lawsuit the Brockways alleged that Allstate's continuing investigation estopped it from relying on the statute of limitations set forth in the policy suit limitation clause ("SLC").
Regular Use Exclusion Found To Apply To Borrowed Car According To The Maine Supreme Judicial Court
In Estate of Mason v. Amica Mutual Insurance Co., 158 A.3d 495 (2017) the Maine Supreme Judicial Court found that where a driver is authorized to use another's car as if it was her own, pending repair of her vehicle, the borrowed car was available for regular use and was governed by the insurance policy's regular use exclusion.
Rhode Island Supreme Court Finds That An Insured's Malpractice Claim Against His Former Insurance Agent Was Untimely Because It Was Filed More Than Three Years After The Insured Received A Copy Of The Policy And Therefore Could Have Discovered The Alleged
In Faber v. McVay, 155 A.3d 153 (R.I. March 8, 2017) the Rhode Island Supreme Court held that an insurance agent malpractice claim was untimely because it was not filed within three years after the date upon which the plaintiff knew or should have known of the agent's alleged wrongful acts.
Additional Insured is not Entitled to Coverage Until Named Insured Satisfies Self-Insured Retention
In a case of first impression under Indiana law, the Indiana Court of Appeals in Walsh Construction Co. v. Zurich, 72 N.E.3d 957 (Ind. App. 2017) held that a policy's SIR had to be exhausted by the named insured before the insurance company was obligated to defend and indemnify the additional insured under the policy. This case involved a construction site accident. The named insured, Roadsafe Holdings, Inc., was a subcontractor for the project and was required to indemnify the general contractor, Walsh Construction Company, for any liability resulting from Roadsafe's negligence. Under the subcontract, Roadsafe was obligated to procure general liability insurance that named Walsh as an additional insured on a primary and non-contributory basis. In accordance with the subcontract, Roadsafe obtained a CGL policy from Zurich which named Walsh as an AI. The AI endorsement was a blanket form of endorsement which established AI status for any person or organization where required by written contract, but only with respect to the liability for the named insured's (Roadsafe) acts or omissions. Roadsafe also purchased a $500,000 per occurrence SIR which required as an express condition precedent that the SIR be exhausted prior to Zurich having an obligation to defend and indemnify under the policy.
Michigan Court Finds Earth Movement Exclusion Applicable to Man-made Earth Movement
Typical earth movement exclusions reference "any" earth movement and are generally understood to be all-encompassing. Nevertheless, courts have disagreed on whether earth movement exclusions are limited to naturally occurring earth movement as opposed to man-made earth movement. The Michigan Court of Appeals in Home-owners Insurance Co. v. Andriacchi, 2017 WL 2491886 (Mich. App., filed June 8, 2017) recently held that the policy's earth movement exclusion encompassed man-made earth movement as well as naturally occurring earth movement. In reaching this conclusion the court looked to the plain wording of the exclusion. The Michigan Court of Appeals found that the word "any" used within the exclusion ("any earth movement (other than sinkhole collapse) such as an earthquake, landslide or earth shrinking, risking or shifting") was commonly understood to be an all-encompassing word meaning "every" or "all". Thus, the exclusion applied to every and all movement of the earth without restriction or distinction as to type (i.e., natur
Failure To Keep Ime Doctor Updated On Plaintiff's Condition Can Foreclose Application Of Genuine Dispute Doctrine For Msj Purposes
California courts have adopted the Genuine Dispute Doctrine. Chateau Chamberay Homeowners Assn v. Associated Internat. Ins. Co., (2001) 90 Cal. App. 4th 335, 347, 108 Cal. Rptr. 2d 776 ("[A]n insurer denying or delaying the payment of policy benefits due to the existence of a genuine dispute with its insured as to the existence of coverage liability or the amount of the insured's coverage claim is not liable in bad faith even though it may be liable for breach of contract.") The Genuine Dispute Doctrine applies not only to disputes over insurance policy interpretation, but also to factual disputes. See, Wilson v. 21st Century Ins. Co., (2007) 42 Cal. 4th 713, 723, 68 Cal. Rptr. 3d 746, 171 P.3d 1082. However, the Genuine Dispute Doctrine will not relieve insurance companies from their obligation to thoroughly and fairly investigate, process, and evaluate the insured's claim. In determining whether a dispute is genuine and actually exists, the courts do not strive to determine which party is right as to the disputed matter, but only whether a reasonable and legitimate dispute actually exists. Chateau Chamberay, 90 Cal. App. 4th at 348, fn. 7, 108 Cal. Rptr. 2d 776. When a dispute is founded on a basis that is reasonable under all of the circumstances, it is a legitimate, genuine dispute. Wilson, 42 Cal. 4th at 724 fn. 7, 68 Cal. Rptr 3d 746. In determining the reasonableness of the insurance company's decisions and actions, the court looks to the state of the record at the time that the decision was made.
Good Samaritan Who Exits Vehicle To Assist Injured Person Still Occupies The Insured Vehicle For Um Purposes
The Rhode Island Supreme Court in Hudson v. GEICO Insurance Agency, Inc., 161 A.3d 1150 (R.I. 2017) recently held, as a matter of first impression, that a passenger riding in an insured vehicle who exited the vehicle in order to render assistance to accident victims as a good Samaritan continued to be an occupant of the insured vehicle when struck by another vehicle at the accident scene.
