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attorney's fee

Florida is a hotbed for insurance claims, from run-of-the mill auto accidents to pervasive construction defects to post-hurricane business interruptions, and everything in between. Insurance companies are likely to deny many of those claims—whether or not that denial is proper—hoping that their policyholders will be unwilling to spend the time and money required to demonstrate coverage. But with its new decision in Johnson v. Omega Insurance Company, the Florida Supreme Court reminds policyholders that they have a powerful tool against improper denials of coverage—the awarding of attorney’s fees. Continue Reading ›

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Over the past four months, a trio of cases has introduced a policyholder-friendly breath of fresh air to Iowa insurance coverage law as Iowa state and federal courts have found that defective workmanship may constitute a covered occurrence under the plain language of CGL policies.

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Since 1979, commercial general liability (CGL) insurers have relied on the New Jersey Supreme Court case of Weedo v. Stone-E-Brick, Inc. and its progeny to argue that a subcontractor’s defective work can never qualify as an “occurrence” under a standard form ISO CGL policy. This argument is contrary to both the language of standard CGL policies and the trend in recent case law, but courts in New Jersey and elsewhere have continued to cite Weedo for this proposition. With its new decision in Cypress Point Condominium Association, Inc. v. Adria Towers, LLC, the New Jersey Supreme Court has now finally relegated Weedo to its proper status as an historical footnote based on outdated policy language.

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Cypress Point involved claims for rain water damage to a condo building. When the condo association began noticing the damage, it brought claims against the developer/general contractor and several subcontractors. The association alleged that the subcontractors’ defective work on the exterior of the building allowed water leaks that damaged steel supports, sheathing and sheetrock, and insulation. When the developer’s CGL insurers refused to cover the claims, the association sued the insurers, seeking a declaration that the association’s claims against the developer were covered.

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CalculatingWhen a jury awards punitive damages against an insurance company for bad faith, the maximum it may award is determined based on a multiple of its underlying award of compensatory damages and attorney fees (so-called “Brandt fees”). In a June 9 decision, the California Supreme Court unanimously held that when a judge, instead of a jury, awards the attorney fees, they should still be included when considering the maximum punitive damages the jury may award.

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Insurance covers the unexpected. Courts sometimes struggle to assess what an insured did expect, didn’t expect, or sometimes, should have expected. Contractors, construction firms and others should bear this in mind in their daily operations and when seeking a defense from their insurance companies.

In Auto-Owners Insurance Co. v. Ryan Stevens Construction, Inc. the U.S. District Court for the District of Utah recently held that a contractor’s commercial general liability insurance carrier had no iStock_000088282803_Medium-track-hoeduty to defend a contractor who should have expected property damage resulting from its use of certain equipment on a construction project. The decision cautions contractors around the country to consider the expected consequences of their on-site actions to avoid arguments from insurers that any resulting damages are not accidental.

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Recently, we wrote about the breadth of the “duty to defend,” and its importance to policyholders.  As if on cue, late last week the Ninth Circuit Court of Appeals confirmed in Ash Grove Cement Company v. Liberty Mutual Insurance Company that, under Oregon law, an insurer’s duty to defend begins with an information request from the Environmental Protection Agency, and continues for the duration of the regulatory process. EPA SignThe particular information request at issue in Ash Grove Cement is known as a “104(e) letter,” which is issued by the EPA under section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA). As companies that have owned or operated a contaminated site know from experience, a 104(e) letter or a similar request under state environmental law typically is the first step in a regulatory enforcement process under which they face strict and retroactive liability for the costs of investigating and cleaning up the site. The ruling in Ash Grove Cement means that defense cost coverage begins at this critical juncture and continues until site investigation and cleanup is completed.

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Over time, New York’s courts have erected multiple barriers to policyholders seeking to recover insurance for long-tail, progressive injury claims—such as environmental or asbestos liabilities—that can implicate multiple policies over multiple policy terms. Now, in a New York minute, just weeks after hearing oral argument, the Empire State’s highest court leveled the playing field by endorsing the “all sums” and “vertical exhaustion” approach to allocation advocated by a policyholder, at least as to policies containing “non-cumulation” and “prior insurance” provisions.

New York City skyline with urban skyscrapers at sunset.

In In re Viking Pump, Inc., New York’s Court of Appeals did not overrule its 2002 decision in Consolidated Edison Co. of New York v. Allstate Ins. Co., which had applied pro rata allocation where the non-cumulation clause argument was not raised, but the court made clear that pro rata allocation is not the default rule in New York. Rather, the specific wording of the triggered policies will control, and can require allocation on an all-sums basis. This is a huge win for policyholders with New York liabilities and a further endorsement, by a prestigious court, of the “all sums” approach to allocation.

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Just as the famous 1897 New York Sun editorial playfully reassured the skeptical eight-year-old Virginia, so too a recent FCyber2ourth Circuit decision should reassure policyholders in Virginia (and nationwide). Despite insurers’ skepticism, general liability insurance may in fact cover cyber events.

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Houdini managed an escape from a straight jacket while suspended 40 feet in the air. But that trick turned out to be easier than a primary insurer’s recent attempt to escape its duty to defend in California. In Underwriters of Interest Subscribing to Policy No. A15274001 v. ProBuilders Specialty Ins. Co., Case No. D066615, Ct. App. Dist. 4, Oct. 23, 2015 (Underwriters), the California Court of Appeal ruled that an “other insurance” clause in a CGL policy that purported to eliminate an insurer’s duty to defend if another insurer picked up the defense was unenforceable. Continue Reading ›

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California’s Supreme Court has closed a loophole of its own creation. The 12-year-old Henkel decision—which permitted insurers to avoid liability for losses when the insured subsequently assigned its policy rights to another entity—has been overruled. Continue Reading ›