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

August 2020 Archives

PENNSYLVANIA SUPREME COURT WEIGHS IN ON AUTOMOBILE STACKING

Under Pennsylvania law, MVFRL ยง1739(c), insurance companies are required to offer insureds the option to waive stacked UIM coverage at the time of purchase. The Pennsylvania Supreme Court held recently that under Pennsylvania's Motor Vehicle Financial Responsibility Law, when the insured increases UIM coverage, that constitutes a statutory "purchase" which thereby voids any prior stacking waivers. Because of this, the purchase of increased UIM coverage then requires insurance companies to offer their insureds a renewed opportunity to waive the stacking. Failure to provide that renewed option of waiver entitled the insured to stack the UIM benefits.

BEYOND A REASONABLE DOUBT IS KEY FOR APPLICATION TO CRIMINAL-ACTS EXCLUSION

A typical criminal act exclusion states that there is no coverage for bodily injury or property damage arising out of any criminal act. Typically the exclusion applies regardless of whether the insured is actually charged with or convicted of a crime. In Country Mutual Ins. Co. v. Dahms, 2016 IL App. (1st) 141392, 405 Ill.Dec. 311, 58 N.E.3d 118 (2016), the Illinois Court of Appeals held that the insurance company was required to defend its insured during the pendency of both a criminal proceeding and a tort action for bodily injury where the complaint in the tort action contained allegations of negligence as well as criminal activity. The Court found that the insurer was required to defend the insured because there was a potential for a non-criminal finding in the tort action.

INSURERS CANNOT SEEK REIMBURSEMENT OF FEES IN ROR SITUATIONS IN ALASKA

In a strained decision, the Alaska Supreme Court in Attorneys Liability Protection Society, Inc. v. Ingaldson Fitzgerald, P.C., 370 P.3d 1101 (2016), answered certified questions from the Ninth Circuit Court of Appeals finding that Alaska's statute regarding independent counsel in insurance situations prohibited insurers from seeking reimbursement of fees and costs incurred during an ROR defense even if it was later determined that there was no obligation to provide a defense because there was no coverage. Instead of critically analyzing the Alaska Supreme Court's judicial legislating and strained analysis in rejecting the insurance company's right to reimbursement, I would encourage the reader to analyze the case in order to come up with the reader's own viewpoint on whether the Alaska Supreme Court stayed within its constitutional role of interpreting the statute as opposed to striking the statute down in the guise of legislative intent. 

WASHINGTON COURT FURTHER CLARIFIES DEFENSE COUNSEL'S ROLE IN ROR DEFENSE

The Washington Court of Appeals recently found (Arden v. Forsberg & Umlauf, P.S., 193 Wash.App. 731, 373 P.3d 320 (2016)), on first impression, that insurer retained attorneys (defense attorneys) were not automatically prohibited from representing insureds merely because the defense attorneys had an ongoing relationship with the insurance company where they were receiving defense case assignments as well as coverage assignments. Moreover, the Court found that defense counsel were not required by the duty of loyalty imposed on counsel under Washington law to disclose to the insured the defense attorney's business relationship with the insurer. However, the Court did note that it was "better practice for attorneys handling the reservation of rights (ROR) defense. to inform their clients if they have a long-standing relationship with the insurer and represent the insurer in other cases."

Contact Steven Plitt

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Phone: 602-322-4038