A panel of the California Court of Appeals, in an unpublished opinion (Stein v. Axis Ins. Co., (Cal. Ct. App., Mar. 8, 2017, No. B265069) 2017 WL 914623), issued March 8, 2017, held that a policy exclusion requiring “final adjudication” did not support a refusal to pay the policyholder’s defense costs by Houston Casualty Company (HCC) following a trial court’s entry of judgment where the policyholder still could pursue appeal.
Continue Reading D&O Policy’s “Final Adjudication” Provision Requires More Than A Trial Court Judgment

The recovery of attorneys’ fees is an important issue in almost every lawsuit, and especially for policyholders in litigation against their insurer.  In almost every case, the policyholder and its insurer will dispute whether the policyholder’s attorneys’ fees are reasonable and necessary, with insurer arguing that they are not.  On Tuesday, February 7, 2016, the Texas Supreme Court heard oral argument in In re National Lloyds Insurance Company, Wardlaw Claims Service, Inc., and Ideal Adjusting, Inc., Case No. 15-0591, regarding whether a policyholder seeking recovery of its attorneys’ fees should be permitted to discover its insurance company’s attorneys’ fee information—such as hourly rates and time spent on the matter.

Continue Reading Texas Supreme Court Hears Argument On Whether Insureds Can Discover Insurer’s Own Attorneys’ Fees

With hurricane season in full swing, policyholders should keep an eye on the Texas Supreme Court for a decision that may impact future recovery efforts. On Tuesday, October 11, 2016, the Texas Supreme Court heard oral argument in USAA Texas Lloyds Co. v. Gail Menchaca, Case No. 14-0721, regarding whether a jury’s award of damages for the insurer’s failure to conduct a reasonable investigation (in violation of the Texas Insurance Code) could stand despite the jury’s finding that the insurer did not breach the insurance policy.

Continue Reading Texas Supreme Court To Determine Whether Insurer Liable For Wind Damages Despite Having Not Breached The Policy

In Cypress Point Condo. Ass’n, Inc. v. Adria Towers, L.L.C., 076348, 2016 WL 4131662, at *8 (N.J. Aug. 4, 2016), a condominium association sued its general contractor for rainwater damage to the condominium complex, after the project was completed, which was allegedly the result of defective work performed by subcontractors. The condominium association also sued the developer’s CGL insurers, seeking a declaration that claims against the developer were covered by the policies. The trial court granted summary judgment to the insurers, finding that there was no “property damage” or “occurrence,” as defined and required by the policies, to trigger coverage. The condominium association appealed, and the Appellate Division reversed, concluding that “consequential damages caused by the subcontractors’ defective work constitute[d] ‘property damage’ and an ‘occurrence’ under the polic[ies].”

Continue Reading Supreme Court Of New Jersey Holds That “Occurrence” In CGL Includes Consequential Damages To Property Caused By Faulty Workmanship

On April 14, 2016, in the case of St. Paul Mercury Ins. Co. v. Am. Bank Holdings, Inc., 15-1559, 2016 WL 1459517, at *1 (4th Cir. Apr. 14, 2016), the Fourth Circuit held that notice to a registered agent started the clock for purposes of calculating timely notice under American Bank’s liability policy with St. Paul.  The policyholder, American Bank Holdings, Inc., provided untimely notice after the registered agent forwarded the underlying lawsuit to American Bank’s CFO, who was no longer with the business. With no apparent back-up for the CFO, the underlying lawsuit remained untouched until the plaintiff obtained and sought to enforce a $98.5 million default judgment. When American Bank alerted St. Paul, the insurer denied coverage based on untimely notice under the policy’s provision that notice be given “as soon as practicable, but in no event later than: (a) sixty (60) days after expiration of the Policy Year in which the Claim was first made.” American Bank later spent approximately $1.8 million in attorneys’ fees and costs getting the default judgment vacated and the state-court lawsuit dismissed.

Continue Reading Poor Risk Management Jeopardizes Coverage After Untimely Notice