Insurance
Insights
i
s a quarterly publication of
Nicolaides Fink Thorpe Michaelides Sullivan
LLP.
In each issue we highlight cases affecting the insurance industry, as well as our representation of insurers in courts across the country. Also highlighted is firm news and leadership activity in various professional organizations. For more about our firm, please visit us
here.
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ALI's Restatement of the Law of Liability Insurance
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On May 22, 2018, the American Law Institute (“ALI”) voted to approve the Restatement of the Law of Liability Insurance. While the official text is prepared for publication, the approved draft is the ALI’s official position and may be cited as such. The Restatement contains fifty distinct principles of insurance law divided into four chapters addressing: (1) contract law in the liability insurance context; (2) duties of insurers and insureds in handling an underlying action; (3) general liability insurance principles, including coverage provisions and application of limits, retentions and deductibles; and (4) enforceability and remedies.
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New York High Court Denies Additional Insured Coverage for Construction Manager Who Did Not Have a Direct Contract with Insured
In
Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire & Marine Ins. Co
., 31 N.Y.3d 131 (N.Y. 2018), a project owner contracted with a general contractor, Samson, to construct a building. The contract required Samson to obtain general liability insurance for the project with an endorsement naming as additional insureds the project owner and construction manager, Gilbane JV. Gilbane JV was sued relating to work at the project and tendered the suit for defense and indemnity to Samson’s general liability insurer, Liberty Insurance Underwriters (“Liberty”).
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California Supreme Court Holds Negligent Hiring, Retention and Supervision Associated with an Intentional Act Can Be an "Occurrence"
On June 4, 2018, the California Supreme Court, addressing an important unresolved coverage issue under California law, held that intentional injuries attributed to an employer’s alleged negligent hiring, retention, and supervision can be considered “accidental,” and therefore can constitute an “occurrence” under the employer’s general liability insurance policy.
Liberty Surplus Ins. Corp. v. Ledesma and Meyer Constr. Co., Inc.
, Cal. Sup. Ct. Case No. S236765.
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Washington Appeals Court Holds Insurance Adjusters Can Be Personally Liable for Bad Faith and Consumer Protection Act Violations
The Washington Court of Appeals recently held that an insurance adjuster can be sued for bad faith and Consumer Protection Act (“CPA”) violations.
Keodalah v. Allstate Ins. Co.
, 413 P.3d 1059 (Wash. Ct. App. 2018). The underlying claim involved an auto accident in which the insured, Keodalah, was hit by an uninsured motorcyclist. Keodalah sought uninsured motorist (UIM) coverage under his auto policy issued by Allstate. Allstate hired an accident reconstruction firm, which found that the motorcyclist caused the accident, consistent with the police department’s investigation. After Allstate offered $5,000 in settlement and refused to pay the $25,000 UIM limits, Keodalah sued. The Allstate adjuster who handled the claim initially asserted that Keodalah was at fault, but later admitted this was untrue
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"Prior Knowledge" Exclusion Applies in Claims Handling E&O Dispute
In
Med. Protective Co. of Fort Wayne Indiana v. Am. Int'l Specialty Lines Ins. Co.
, No. 1:13 CV 357, 2018 WL 1257238 (N.D. Ind. Mar. 9, 2018), the firm obtained summary judgment on behalf of our client, on the grounds that the policyholder seeking coverage under a “claims made” policy knew or should have known prior to the policy period that a claim was likely. Our client issued a “claims made” professional liability policy to a medical malpractice insurer (essentially, a policy protecting the policyholder insurer against “bad faith” claims and other extracontractual losses resulting from errors in claims handling). An exclusion in the policy precluded coverage for claims later asserted if the malpractice insurer knew, prior to the policy period, that a claim could be made based on its actions.
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An Integration Clause Does Not Prohibit Consideration of All Parts of a Multi-Document Insurance Contract to Harmonize Facial Contradictions
The Tenth Circuit Court of Appeals affirmed summary judgment in favor of an insurer based on the entirety of a multi-document insurance contract, notwithstanding an integration clause that prohibited amending the policy except by endorsement, and “facial contradictions” between the policy and other documents that were part of the insurance contract.
National Union Fire Ins. Co. of Pittsburgh, Pa. v. Federal Ins. Co.
, Case No. 16-1438 (10th Cir. May 17, 2018).
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Trial Court Rules Sexual Abuse Exclusion Enforceable in Illinois
Our client won summary judgment enforcing sexual abuse exclusions in
Markel Insurance Company v. Energym Gymnastics, Inc.
, Case No. 17 CH 1948 in the Circuit Court of Cook County, Illinois. In 2016, Joseph Hannon was arrested and charged with sexually assaulting children while working as a gymnastics instructor at Energym Gymnastics, Inc. Families of two victims sued Energym. We sought a declaratory judgment on Markel’s behalf, asserting primarily that the policies’ Illinois Sexual Abuse Or Sexual Molestation Exclusion -- Youth Related Organizations endorsement precluded coverage. Energym and the underlying claimants asserted numerous counterclaims and affirmative defenses, alleging vexatious and unreasonable conduct, anticipatory breach of the policies, and violation of Illinois’ Consumer Fraud and Deceptive Trade Practices Act, and asserting that the Sexual Abuse Exclusion contravened public policy and could not be enforced.
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Welcome Aboard!
- This Spring we welcomed James L. Ellison and Rona Eli to the firm. James is based in our Chicago office and represents insurers in high exposure disputes involving medical malpractice, public entity and environmental matters. He earned his law degree from the University of Arkansas. Rona is a litigator who joined the firm in May and works in our Los Angeles office, providing insurance coverage advice to clients. Rona received her law degree from Suffolk University Law School.
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Our Honors
- Chambers and Partners has recognized our firm's overall insurance practice with high rankings, and, for the third consecutive year, named Matt Fink and Sara Thorpe as leading practitioners in insurance coverage law. Read more.
- Law360 has named Nicolaides Fink Thorpe Michaelides Sullivan LLP one of the "Best Law Firms for Female Attorneys" in its 2018 Glass Ceiling Report. Read more
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Taking the Stage
- In May, Monica Sullivan served as a panelist at the 2018 CLM Bermuda Chapter Education and Networking Event in Hamilton, Bermuda. In her segment of the presentation "Modern Day Crises: An Insurance Perspective on When Sex, Drugs and Guns Go Wrong," Monica addressed the historical context of the opioid crisis and the impact this epidemic is having on the insurance industry today.
- In June, Jodi Green participated on a panel addressing insurance coverage issues relating to opioid litigation at The Opioid Litigation Conference in Dallas, Texas.
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Attorney Spotlight: Jeff Labovitch aka
"The Iceman"
Jeffrey N. Labovitch, Partner
(San Diego)
Jeffrey Labovitch
joined our firm shortly after its doors opened and established the firm’s San Diego office. Jeff applies his 13 years of insurance coverage experience to assist our clients on a variety of litigated and non-litigated matters
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Read more
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Chicago
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