In what appears to be a case of first impression, an Ohio trial court ruled in Kimmelman v. Wayne Insurance Group, that the crypto-currency, Bitcoin, constitutes personal property in the context of a first-party homeowners’ insurance policy and, therefore, its theft would not be subject to the policy’s $200 sublimit for loss of “money.”
A California federal court found coverage under AIG’s general liability policy for the defense and indemnity of email scanning suits against Yahoo!. Those suits generally alleged that Yahoo! profited off of scanning its users’ emails. Because the allegations gave rise to the possibility that Yahoo! disclosed private content to a third party, the court found that the suit potentially fell within the coverage for “oral or written publication, in any manner, of material that violates a person’s right of privacy.” Thus, AIG’s duty to defend was triggered.
The court also found that AIG had a duty to indemnify for Yahoo!’s settlement in the email scanning suits. One key question was whether the settlement amount paid as attorneys’ fees to plaintiff’s counsel constituted damages under the policy. The court concluded that they were, based on the fact that the plaintiffs sought attorneys’ fees under a statute and on its finding that Yahoo! would reasonably expect that those fees would qualify as damages.
Yahoo! had also alleged that AIG acted in bad faith in its claims handling because AIG had denied coverage for the first two lawsuits and then ultimately acknowledged such an obligation with respect to the third lawsuit and in so doing had cited exclusions that were not a part of the policy. The court found that issue was one for a jury to decide.
This decision is another example that valuable cyber coverage for defense and indemnification may be available under general liability policies. Of course, whether there is coverage will depend on the particulars of the claim and the insurance policy.
Whether an insurance bad faith claim, joined by amendment to an underlying insurance coverage action, may be removed more than a year after the original action was begun has divided federal judges in the state of Florida but has not yet been considered by the Eleventh Circuit. Now, a new opinion out of the Middle District of Florida (Jacksonville Division) has added to the debate.
Kanye West’s touring company, Very Good Touring, Inc. (Very Good), and its insurer, Lloyd’s of London (Lloyd’s), have resolved their dispute over event cancellation coverage for West’s “Life of Pablo” Tour, which experienced canceled shows due to West’s health condition. The settlement resolved all claims and counterclaims. Continue Reading Insurer Settles $10M Coverage Dispute With Kanye West Touring Company
In a recent insurer’s failure-to-settle case, Hughes v. First Acceptance Ins. Co. of Ga., the Georgia Court of Appeals reaffirmed that there is no hard-set rule conducive to summary judgment; rather, the court ruled that a jury should determine whether the insurer’s actions had been “reasonably prudent.” Plaintiff Robert Jackson allegedly caused a five-vehicle collision that resulted in his death and the serious injuries of others, including Julie An and her minor child, Jina Hong. An and Hong, through their counsel, communicated with Jackson’s insurance company, First Acceptance, stating that they were “interested” in settling their claims within Jackson’s policy limit of $25,000. Counsel also requested that the insurer send him policy information within 30 days. An later claimed that this communication represented an offer of settlement, when, 41 days later, they sent First Acceptance a letter withdrawing their “offer” and stating their intent to file suit due to the insurer’s failure to respond. An and Hong then filed suit and were ultimately awarded $5,334,220 in damages. First Acceptance paid $25,000 towards the award, leaving Jackson’s estate exposed to over five million dollars in damages.
An eye-popping settlement in Georgia serves as a cautionary tale for insurers who refuse to provide a straight answer when responding to a demand for policy limits and as a lesson for insureds dealing with recalcitrant insurers: Don’t just take “no” for an answer.
In a prior blog post, we discussed Kanye West’s touring company’s, Very Good Touring, Inc. (“Very Good”), lawsuit against its insurer, Lloyd’s of London (“Lloyd’s”), for withholding almost $10 million in coverage after the cancellation of shows on West’s “Life of Pablo” Tour. On Tuesday, August 29, 2017, Lloyd’s responded by counterclaiming against Very Good and West, alleging that the loss was due to their failure to abide by policy conditions.
Hollywood is not off to a great start for the month of August. Kanye West’s touring company, Very Good Touring, Inc. (“Very Good”), sued insurance company Lloyd’s of London (“Lloyd’s”) on Tuesday in California federal court for withholding almost $10 million in coverage for the shows on West’s “Life of Pablo” Tour that were canceled due to West’s health condition. In Very Good Touring, Inc. v. Cathedral Syndicate, et al., No. 2:17-cv-05693 (C.D. Cal. filed Aug. 1, 2017), the touring company characterized Lloyd’s delay in providing a coverage opinion as “emblematic of a broader modus operandi of the insurers of never-ending post-claim underwriting where the insurers hunt for some contrived excuse not to pay.”
In recent months, insurers have increasingly used New York rescission law as a means to not only deny coverage for specific claims, but also to void any protection an insurance policy may provide for other losses down the road. For example, H.J. Heinz Company recently found itself without coverage for a $30 million recall after its insurer rescinded its policy based on a misrepresentation in Heinz’s insurance application. In an article for FC&S Legal, Syed S. Ahmad, Tae Andrews, and Kelly Oeltjenbruns analyze recent rescission claims and illustrate the dangerous exposure—and high price tag—that can accompany misstatements or non-disclosures, even unintentional ones, when procuring coverage. The article, available here, tackles the issue of minimizing risks associated with recession claims and shares helpful tips for policyholders.
In the linked Client Alert, my colleague, Geoff Fehling, discusses the recent federal appellate decision in Camacho v. Nationwide Mutual Insurance Co., No. 16-14225, 2017 WL 2889470 (11th Cir. July 7, 2017), where the Eleventh Circuit affirmed a Georgia district court’s refusal to disturb a jury award for the policyholder arising from the insurer’s failure to accept a time-limited settlement demand, holding that the lower court’s order was “thorough and well-reasoned.”