Steven Plitt, Expert Witness Steven Plitt, Expert Witness
Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

November 2016 Archives

In A Surprising Decision, A Federal District Court, Applying Florida Law, Granted Summary Judgment To An Insurance Company On A "Failure To Settle" Claim Because The Insured's Liability Was Not Clear

Florida is a testing ground for creative lawyering designed to set up insurance companies on failure to settle claims. However, in Welford v. Liberty Ins. Corp., 2016 WL 3360431 (N.D. Fla., 6/2/16), at least one Federal District Court refused to countenance yet another attorney's attempt to create a failure to settle claim against an insurance company under Florida law. In this case, the insurance company tendered its limits within two days after receiving the lawsuit. Nevertheless, the claimant argued that the insurance company had failed to promptly tender the limits earlier in the matter when it was first notified of the accident. The District Court found that no reasonable trier of fact could have determined that the insured's liability was "clear" when the claim was first reported. The facts before the Court were complicated and disputed.

In A Self-Evident Decision, The Eighth Circuit Court of Appeals Recently Held That An Insurance Company's Failure To Re-Evaluate A Case Value After The Trial Court Eliminated A Key Affirmative Defense Justified A Bad Faith Failure To Settle Verdict

The Eighth Circuit Court of Appeals in Bamford, Inc. v. Regent Ins. Co., 822 F.3d 403 (8th Cir. 2016), held that the District Court had properly denied an insurance company's post-verdict motions challenging the jury's verdict in a bad faith failure to settle case and the evidence demonstrated that the insurer had failed to re-evaluate its settlement position after a trial court ruling in the underlying case eliminated a key affirmative defense. The Eighth Circuit Court noted that the insurance company's evidence that it had made multiple efforts to settle the case based on its evaluation of the case, continuously increased its reserves and offers in the settlement process, had followed the advice and valuations of the case of outside counsel as well as two mediators, and had discussed the claim value in multiple roundtable meetings with senior management was nevertheless insufficient to establish that the insurance company acted in good faith as a matter of law because the insurance company did not factor into its evaluation the trial court's elimination of a key affirmative defense.

Montana Courts Finds That Falling Boulders Constitute "Earth Movement" For Purposes Of Policy's "Earth Movement" Exclusion

The Montana Supreme Court in Parker v. Safeco Ins. Co. of America, 384 Mont. 125, 2016 MT 173, 376 P.3d 114 (2016), held that an earth movement exclusion was not limited solely to damages caused by soil movement. The Court found that earth movement included damage caused by a falling boulder. The Court noted that the insurance policy in question included as examples of earth movement both landslides and lava flows but did not mention soil; the policy did not provide a basis for separating rock and soil when construing the exclusion. The Court found that nothing in the language of the earth movement exclusion indicated that there was any basis for separating rock from soil when considering earth movement. A common understanding of the term landslide in the context of the exclusion could include a large boulder that came down the hill and crashed into the insured's cabin. Because a common understanding of the term landslide in the context of the exclusion would include the large boulder that came down the hill and crashed into the insured's cabin, the policy excluded coverage for the loss.

Is Advertising Injury In The Bag? United States Second Circuit Court Of Appeals Finds That The Sale Of Counterfeit Branded Goods Was Not Covered As Advertising Injury

In United States Fidelity & Guaranty Co. v. Fendi Adele S.R.I., 823 F.3d 146 (2nd Cir. 2016), the United States Court of Appeals held in favor of USF&G finding that USF&G's policy did not provide coverage for the legal liability of its insured for selling counterfeit handbags and other goods with counterfeit brand labels. The insured, Ashley Reed Trading, Inc., was in the business of purchasing and selling off-price branded handbags and other luxury goods. Ashley Reed was insured by USF&G under two liability policies for "advertising injury." Under the policies, "advertising injury" was defined by the policies as the act of "attracting the attention of others by any means for the purpose of seeking customers or supporters or increasing sales or business." The policies listed four advertising injury offenses which included the "use of another's advertising idea in your 'advertising,'" as well as "infringement of another's copyright, trade dress or slogan in your 'advertising.'"

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