Exhaustion
- Allocation/Insolvency
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New Jersey Supreme Court Rules Policies Issued by
Insolvent Insurers Subject to 2004 PLIGA Amendment Are Only Implicated
After Solvent Policies Exhaust
Farmers Mut. Fire Ins. Co. v. N.J. Property-Liability
Ins. Guar. Ass'n As Adm'r of Claims Against
Newark Ins. Co., 2013 N.J. LEXIS 902 (2013)
The New Jersey Supreme Court ruled that under a 2004 amendment
to PLIGA, policies issued by insolvent carriers and backstopped by the
Insurance Guaranty Association are not triggered in continuous trigger
setting until prior exhaustion of all solvent policies.
In particular, the Court ruled that: (1) the 2004 amendment
was a legislative response to previous
Appellate Division case that found Guaranty
Association was required to pay in insolvent insurer's stead
even if all solvent policies had not yet exhausted; and (2) departure from
the general long-tail allocation methodology set forth in Owens-Illinois
did not violate Contracts
Clause.
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Coverage
Trial - Right to Jury
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No Right
to Jury Trial in Action Brought under Insurance Fraud Prevention Act
Allstate N.J. Ins. Co. v. Lajara, 2013 N.J. Super.
LEXIS 147 (App. Div. Oct. 9, 2013)
The Insurance Fraud Prevention Act
does not include a statutory right to a trial by jury. The New Jersey
Constitution does not guarantee a right to trial by jury for private
actions under the Act.
Plaintiff insurers brought a fraud
claim under the Act against various defendants, including individual
physicians and chiropractors, medical and chiropractic practices, and
unlicensed individuals. The insurers alleged that the defendants
participated in a scheme to coax insurers into paying unwarranted PIP benefits.
Among the defendants' alleged tactics were paying kickbacks to attorneys
who referred clients, paying persons to intentionally cause accidents in
order to generate fraudulent bills, and billing for various services
performed by unlicensed persons. The insurers sought a declaration
that they were not obligated to pay PIP benefits to defendants,
disgorgement of sums already paid and damages allowed under the Act.
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Defense
Costs - Contribution
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Insurer May Bring Direct Action Against Fellow Insurer
for Recovery of Defense Cost Payments
Potomac Ins. Co. v. Pennsylvania Manufacturers' Ass'n
Ins. Co., 73 A.3d 465 (September 16, 2013)
The court ruled that an insurer may
bring a lawsuit against another insurer to recover for overpayment
of single policyholder's defense costs in the context of a continuous
trigger coverage dispute. The presence of a settlement and release between
the defendant insurer and policyholder does not undermine plaintiff
insurer's ability to pursue direct action. The Supreme Court's ruling
depended on a close analysis of Owens-Illinois and Carter-Wallace,
affirming their place as foundational precedent in the wake of the Farmers
Mutual decision.
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Auto
and Transportation Exclusions
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Eastern District Court Finds Insurer is Not Obligated
to Defend Insured in Multiple Suits Stemming from an Automobile Accident
Tudor Ins. Co. v. Golovunin, 2013 U.S. Dist. LEXIS 140186
(E.D.N.Y. Sept. 27, 2013)
The insurer was successful in its
declaratory judgment action against its insured on the basis that it had no
duty to defend or indemnify its insured pursuant to the auto exclusion,
transportation exclusion and a premises limitation provision.
The insured - - a day camp - -was
named as a defendant in four separate lawsuits stemming from a car crash
that occurred while driving to an off-site location. The insurer
brought the present suit seeking a declaration that it does not have a
defense and/or indemnity obligation in connection with the accident based
on the auto and transportation exclusions and the limitation of coverage to
the camp premises.
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Notice
- Claims Made and Reported
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Southern District Finds the Insured's Delay in
Providing Notice Of Pollution Liability Claims Was Unreasonable as a Matter
of Law
Indian Harbor Ins. Co. v. City of San Diego, 2013 U.S.
Dist. LEXIS 137873 (S.D.N.Y. Sept. 25, 2013)
Court finds that a New York choice of law
provision in claims made and reported policy applied to dispute between insurer and the City of San
Diego; and under New York law, delay in providing notice "as soon as
practicable" was unreasonable as a matter of law.
The insurer, which issued a claims made and reported
policy to the City of San Diego (the "insured"), brought the
present action seeking a declaration that it did not owe a duty to
indemnify the insured for three separate lawsuits involving pollution
liability. The subject suit was brought in the Southern District of
New York pursuant to two clauses: (1) a Jurisdiction and Venue clause providing
that all disputes would be resolved within the State of New York and (2)
Choice of Law provision requiring application of New York law.
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Additional Insured - Priority of Coverage Between
Additional Insurers
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Court Determines that Additional Insured Coverage Under Two
Subcontractors' Policies Would be Co-Primary
Travelers Prop. Cas. Co. of Am. v Selective Ins. Co. of N.Y., 2013 N.Y. Misc. LEXIS 4155
(N.Y. Sup. Ct. Sept. 11, 2013)
After reviewing the subcontracts and insurance policies, the
court finds that the owner of premises
is entitled to additional insured coverage pending a finding of fact that
the work arose out of either subcontractor's work for the owner.
The liability insurer for an electrical subcontractor sought
conditional summary judgment declaring that, should a trier of fact in the
underlying action render a factual determination that the electrical
subcontractor employee's accident "arose out" of the work of the
demolition contractor, then the liability insurer for the demolition
subcontractor must provide the owner with coverage on a primary and
non-contributory basis.
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