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

June 2020 Archives

YOU SHOULD HAVE KNOWN . . .

In Zavodnick, Zavodnick & Lasky, LLC v. National Liability and Fire Ins. Co., 2019 WL 1003157 (E.D. Pa. 3/1/19) the Pennsylvania court held that when a workers compensation board criticized the attorney's handling of the case, that a reasonable attorney would have known that a malpractice claim might be filed and therefore the professional liability policy's prior knowledge provision precluded coverage of a malpractice claim. 

COURT FINDS THAT A GOVERNMENT SUBPOENA SEEKING DOCUMENTS CONSTITUTED A CLAIM FOR NON-MONETARY RELIEF UNDER A D&O POLICY

The Texas court in Oceans Healthcare, LLC v. Illinois Union Ins. Co., 2019 WL 1437955 (E.D. Tx. 3/30/19) (appealed file), held that the subpoena alleged a wrongful act under the policy because the subpoena sufficiently alleged violations of the false claims act. The subpoena had sought documents "in connection with an investigation into . . . possible false claims act violations . . ." On other grounds the court held that the policy did not provide coverage. In this D&O case, the federal government issued a subpoena to the insured corporation seeking documents in a qui tam action, alleging that the corporation had submitted false and fraudulent payment claims to Medicare/Medicaid. The insured submitted a claim to its D&O insurer, seeking coverage for the expenses that the corporation incurred in responding to the government subpoena. The insurer denied the request for reimbursement, arguing that the government subpoena was not a "claim" inasmuch as the subpoena did not seek relief, but rather, sought information. The court rejected the insurer's argument, finding that the subpoena sought non-monetary relief under the policy. Under the D&O policy, a claim was "a written demand against any insured for monetary damages or non-monetary or injunctive relief." The policy did not define the term "relief."

IN DETERMINING INSURANCE AGENT LIABILITY FOR FAILURE TO PROCURE, A FUNDAMENTAL QUESTION IS WHETHER THE COVERAGE SOUGHT WAS EVEN AVAILABLE

According to the Wisconsin Court of Appeals, to assert an insurance agent's liability for negligent failure to procure requested coverage, the customer must establish that the coverage requested was actually available.

WASHINGTON COURT PREVENTS DUPLICATION OF LIABILITY AND UIM COVERAGES UNDER SINGLE AUTO POLICY

In Thompson v. Progressive Direct Insurance Co., 438 P.3d 53 (Wash. App. 2019) the court held that UIM coverage did not extend to a third party guest passenger in a covered auto under Progressive's policy. The Progressive policy contained an exclusion of the named insured's own covered vehicle from the policy's UIM coverage provision in situations where a guest passenger was seeking benefits for both liability and UIM coverage. Under the Progressive UIM portion of the policy, the policy defined an insured person as including any person occupying, but not operating, a covered auto. The policy also stated that a UIM vehicle did not include a covered auto under the policy unless the person insured was a named insured or relative of a named insured. In effect, the exclusion precluded guest passengers in a covered vehicle from recovering under both the liability and UIM provisions of the policy. The Washington Court of Appeals held that the non-duplication policy definition did not violate Washington law or public policy. The Court upheld the Washington Supreme Court's decision that had themselves upheld the validity of UIM exclusions of third party guest passengers.

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