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

July 2018 Archives

CALIFORNIA COURT OF APPEALS WEIGHS IN ON STATUTE OF LIMITATION FOR FAILURE TO PROCURE INSURANCE By Steven Plitt

In Lederer v. Gursey Schneider, 22 Cal. App. 5th, 508, 231 Cal.Rptr.3d 508 (2nd Dist. 2018) the issue before the court was when the statute of limitations began to run against an accounting firm that handled the client's insurance needs. It was alleged that the accounting firm failed to procure the requested UIM coverage. The court held that the statute of limitations began to run when the insurance company paid the UIM limit rather than when the insured was injured and discovered the inadequate amount of coverage.

CALIFORNIA APPELLATE COURT FINDS THAT FEDERAL ARBITRATION ACT DID NOT PREEMPT CALIFORNIA'S STATUTE GOVERNING ARBITRATION PROCEDURE

In Los Angeles Unified School District v. Safety National Casualty Corp., 13 Cal.App. 5th 471, 220 Cal.Rptr.3d 546 (2nd Dist. 2017) the court held that California Code of Civil Procedure §1281.2(c) was not preempted by the Federal Arbitration Act. See 9 U.S.C. §1. Under the California Code provision, California courts were permitted to refuse to enforce arbitration agreements when there was a possibility of conflicting rulings in situations where a party to the arbitration agreement was also a party to a court proceeding involving third parties who were not bound by the agreement. The appellate court reaffirmed the trial court's ruling when the trial court denied the insurance company's motion to compel arbitration in a dispute involving coverage for a school district's negligent hiring of several teachers who abused students. In the underlying litigation, the teachers in question abused students for decades and because of this, 26 other insurance companies were also parties to the school district lawsuit. The school district argued that the abuse arose out of a single occurrence. The trial court found that there was a possibility that the arbitrator and the court might issue conflicting rulings and therefore the trial court refused to order arbitration.

8TH CIRCUIT COURT OF APPEALS, INTERPRETING MINNESOTA LAW, FINDS THAT CARBON MONOXIDE IS A POLLUTANT FOR PURPOSES OF THE APPLICATION OF A POLLUTION EXCLUSION

In Travelers Property Casualty Co. of America v. Klick, 867 F.3d 989 (8th Cir. 2017) the 8th Circuit held, under Minnesota law, that carbon monoxide was a pollutant for purposes of a policy's pollution exclusion. The pollution exclusion in question required the pollutant to be released into the atmosphere. Under the case facts there was a carbon monoxide build-up in the engine compartment of a boat. When the boat owner went to check on the engine, the boat owner opened the engine compartment hatch, which allowed carbon monoxide to be released into the wheelhouse of the boat. The boat owner was injured when he lost consciousness and fell into the engine compartment and was severely burned while lying on the engine. The boat owner argued that his injuries did not arise out of the release of carbon monoxide into the atmosphere because the engine compartment did not contain "atmosphere." However, the 8th Circuit rejected this argument. The court found that the boat owner was exposed to a pollutant that was not in a controlled environment. The court also found that a reasonable person in the position of the insured would have understood that a person in the wheelhouse of the boat was in "atmosphere."

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