Insurance
Insights
is a publication of Nicolaides Fink Thorpe Michaelides Sullivan LLP,
in which
we discuss recent significant insurance coverage cases and issues relevant to the insurance industry. For more about our firm, please visit us
here.
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Middle District of Tennessee Finds Bad Faith Statute Does Not Preclude Punitive Damages Award Against Insurers
The United States District Court for the Middle District of Tennessee recently found that Tennessee’s “Bad Faith Refusal to Pay” statute, Tenn. Code Ann. § 56-7-105, does not preempt a common law punitive damages claim against an insurer.
U.S. Roller Works, Inc. v. State Auto Prop. & Cas. Ins. Co.
, No. 3:16-CV-2827, 2018 WL 1288942 (M.D. Tenn. Mar. 13, 2018). In
Roller Works,
the manufacturer of rubber to steel rollers sued its first-party property insurer seeking punitive damages for alleged bad faith failure to pay a portion of a wind and water damage claim. The insurer moved to dismiss the punitive damage claim, arguing that the Tennessee bad faith statute, which imposes a penalty of up to 25% for any refusal to pay a loss in bad faith, forecloses a separate claim for punitive damages.
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Seventh Circuit Finds No Coverage Without Proof Lost Profits Resulted From Property Damage
In
Berry Plastics Corporation v. Illinois National Insurance Company
, the Seventh Circuit predicted how the Indiana Supreme Court would decide the issue of whether future lost profits are covered as damages “because of” property damage.
Berry Plastics,
903 F.3d 630 (Sept. 10, 2018).
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Florida Federal Court Finds No "Personal Injury" Coverage for Data Breach Claim
St. Paul Fire and Marine sought a declaratory judgment as to whether it had a duty to defend its insured, Millennium, against a claim alleging that Millennium negligently provided data security services to Rosen Hotels & Resorts (“Rosen”), resulting in a breach of Rosen’s credit card system.
St. Paul Fire & Marine Ins. Co. v. Rosen Millennium, Inc.
, No. 6:17-cv-540-Orl-41GJK, 2018 WL 4732718 (M.D. Fla. Sept. 28, 2018). Specifically, Rosen alleged that Millennium “made private information known to third parties that violated a credit card holder’s right of privacy.”
Id.
at *3. Millennium asserted that loss of use of credit cards implicated “property damage” coverage under its commercial general liability policies and that such policies also covered Rosen’s costs for complying with notification statutes. The district court, however, ruled that these claims were not ripe for declaratory judgment because they were not specifically set forth in Rosen’s notice of claim.
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Ohio Supreme Court Finds No Coverage for Faulty Workmanship Claim
In
Ohio Northern University v. Charles Construction Services, Inc.
, the Ohio Supreme Court addressed whether a commercial general liability policy covered a general contractor for property damage caused by its subcontractor’s defective work.
Charles Constr. Svs., Inc.
, No. 2017-0514, 2018 WL 4926159 (Ohio Oct. 9, 2018)
.
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Appellate Court Affirms Breach of Notice of Suit Condition Bars Coverage for Arbitration Award Under Umbrella Liability Policy
I
n
Tudor Insurance Co. v. Altman Management Co.
,
et al
.
,
Nos. 335841 and 335890 (Mich. App. Ct. August 21, 2018) (unpublished), the Michigan Court of Appeals affirmed summary judgment to our client, National Union Fire Insurance Company of Pittsburgh, Pa., agreeing with the Circuit Court of Wayne County that the insured’s breach of the National Union excess policy’s notice of suit condition relieved National Union of any coverage obligation.
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Insuring the Ever-Growing Cannabis Industry
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Roughly six-in-ten Americans (62%) believe marijuana should be legalized, a figure that has doubled since 2000. (Hannah Hartig & Abigail Geiger, Pew Research Center,
About six-in-ten Americans support marijuana legalization
(Oct. 8, 2018),
available at
http://www.pewresearch.org/fact-tank/2018/10/08/americans-support-marijuana-legalization/)
. The legal landscape has also changed dramatically in this time, with 32 states and the District of Columbia legalizing the use of medical marijuana and ten states and the District of Columbia allowing recreational use, with only more states expected to follow. (Matt Ferner, Huffington Post, “3 States Legalize Marijuana for Recreational or Medical Use” (Nov. 7, 2018),
https://www.huffingtonpost.com/entry/midterm-election-marijuana-legalization_us_5be26aa3e4b0dbe871a45fd7).
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On the Program
Daniel Graham
and other members of the Nicolaides team attended the Defense Research Institute's annual Insurance Coverage and Practice Symposium on November 29-30, 2018, in New York. Dan was a featured speaker on the topic "Social Media and Coverage B." Dan currently serves as chair of the Personal and Advertising Injury Subcommittee of the DRI's Insurance Law Committee.
Nicolaides Fink Thorpe Michaelides Sullivan LLP
was a proud sponsor of this year's symposium, which was attended by insurance executives, claims professionals, and in-house and outside coverage counsel.
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Insurance Coverage for Opioid Liability
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In Our Communities
During the month of September, the Nicolaides team gave back to our communities by working with local food banks and other organizations in Chicago, San Diego and San Francisco. Our Chicago office worked with
Project I Am
, an organization founded three years ago by 11-year-old Jahkil Jackson, providing "blessing bags" filled with food, toiletries and personal messages for hundreds of people in the city's homeless community. In San Diego, attorneys, staff and their families volunteered with
Feeding San Diego
, which focuses on providing healthy, fresh foods and resources to a network of more than 245 distribution partners serving 63,000 people weekly. And, in San Francisco, a squadron of Nicolaides volunteers rolled up their sleeves to help the
San Francisco-Marin Food Bank,
boxing 8,140 pounds of food for distribution to those in need throughout San Francisco and Marin County. We thank attorneys
Amy Cassidy,
Amy Klie,
Matthew Lovell
and
Chris Middleton
for organizing these gratifying evenings of service.
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Attorney Spotlights
Alexander Mahler - At Your Service
Alexander B. Mahler
joined the firm in September and is very happy to be surrounded by so many great people and accomplished coverage lawyers. For approximately 20 years, his practice has been focused on representing insurers in complex coverage and bad faith disputes arising under a wide range of primary and excess policies.
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Regina Ripley Kick-Starts Non-Profit Soccer Club for Families
Regina A. Ripley
also joined Nicolaides in September and has nearly 20 years of coverage experience advising, litigating, and mediating disputes for insurers and in various state, federal and appellate courts around the country. Since her first day as a lawyer in September 2001, she has worked solely on coverage, contribution, and subrogation matters for insurers.
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Chicago
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Los Angeles
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San Diego
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San Francisco
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White Plains
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