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

October 2018 Archives

Oregon Court Finds That Insurer Bad Faith Is Not Elder Abuse

The Oregon Supreme Court, answering a certified question by the 9th Circuit Court of Appeals, held that bad faith delay or denial of payment of an insurance claim did not state a claim under Oregon's Financial Elder Abuse Statute. In Bates v. Bankers Life and Casualty Co., 362 Or. 337, 408 P.3d 1081 (Or. 2018), the Oregon Supreme Court held that an insurance company's alleged bad faith did not simultaneously constitute a violation of Oregon's elder abuse statute. In this case, the plaintiffs were senior citizens who had purchased long-term healthcare insurance policies issued by Bankers Life. The seniors sued Bankers, alleging that Bankers had developed onerous procedures to delay and deny insurance claims that were submitted by seniors. The seniors brought an elder abuse claim against Bankers under ORS §124.110. However, the Federal District Court dismissed the claim, finding that the Elder Abuse Statute only applied in "bailment or trust scenarios expressly referenced in the statutory language." The dismissal was appealed to the 9th Circuit Court of Appeals. In turn, the 9th Circuit certified a question to the Oregon Supreme Court on the issue.

Breach of Contract Exclusion Trumps Advertising and Personal Injury Coverage According to a California Court

In James River Insurance Co. v. Medolac Laboratories, 290 F.Supp.3d 956 (C.D. Cal. 2018) the court held that a CGL policy's breach of contract exclusion precluded personal and advertising injury coverage in a situation where the insured promised not to commit any personal and advertising injury offenses after being terminated from her prior relationship with the claimant.

Refining Florida's Bad Faith Law

In order to bring a bad faith claim in Florida, the following three elements need to be established: (1) the insurer's liability for coverage needs to be determined; (2) the extent of the insured's damages needs to be determined; and (3) it must be established that the insured placed the insurance company on notice. See Florida Statute §624.155(a). This statute provides a civil remedy in cases where the insurance company fails to settle its policyholder's claim in good faith or where the insurer commits any one of the several unfair claims handling practices identified in Florida Statute §626.9541(1)(I).

An Insurance Company's Refusal To Authorize Settlement While Defending Under Ror May Breach The Insurer's Duty To Defend And Settle Under Illinois Law According To Illinois Court Of Appeals

In this case, the insurance company authorized the retention of independent counsel chosen by the insured due to the insurer's reservation of rights. As the case was being defended, independent counsel advised the insurer that the demand made by the claimant for settlement was reasonable in light of the likelihood that an excess judgment would be entered. Notwithstanding this advice from independent counsel, the insurer threatened to withdraw coverage if the insured continued to negotiate a settlement with the claimant. The court in Rogers Cartage Co. v. Travelers Indemnity Co., _____ N.E.3d _____ 2018 Ill. App. (5th) 160098 (Ill. App. 5th Dist. April 5, 2018) held that under those case facts, the insurance company was estopped from asserting its coverage defenses.

Virginia Federal District Court Considers "All Sums" Allocation Under New York Law

In Hopeman Brothers v. Continental Casualty Co., 307 F.Supp.3d 433 (E.D.Va. 2018) the Virginia Federal District Court, in an asbestos case, determined that New York's substantive law applied to the allocation issue before the court. The problem for the Virginia Federal District Court was that New York had not adopted a pro rata or all sums allocation rule applicable in all cases. Reviewing the judicial landscape of New York law, the Virginia court noted that the New York court in Matter of Viking Pump, 27 N.Y.3d 244, 52 N.E.3d 1144 (2016) had applied an all sums allocation. However, the Viking Pump court did so based upon the specific language in the policies at issue which contained non-cumulation and prior insurance provisions which were designed to prevent stacking of the limits of multiple triggered policies. Reviewing these provisions, the court determined that the policy anti-stacking provision had contemplated that multiple successive insurance policies could indemnify the insured for the same loss or occurrence and therefore were inconsistent with a pro rata allocation. The Virginia court also noted, however, that when insurance policies under New York law did not contain non-cumulation or prior insurance clauses, the New York court's decision in Consolidated Edison Co. of New York v. Allstate Insurance Co., Con Edison, 98 N.Y.2d 2018, 746 N.Y.S.2d 622, 774 N.E.2d 687 (2002), controlled. In Consolidated Edison, the New York Court of Appeals had adopted a "pro rata" approach to allocation was being consistent with the policy's requirement that injury or damage occurred during the policy period.

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