Late
Notice - Statutory Waiver
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Policyholder's § 3420d) Waiver Rebuttal to
Insurer's Late Notice Defense is Limited to Bodily Injury Claims Arising in
New York State; Inapplicable in Environmental Property Damage Dispute
Gas E. Crp. v. Munich Reins.
Am., Inc., 2014 N.Y. LEXIS 1319 (N.Y. June 10, 2014)
The New York Court of Appeals ruled that
an appellate court wrongly applied the strict timeliness standard from
Insurance Law § 3420d(2) in considering
whether waived its
late-notice defense in an environmental property damage coverage action.
The insured, the former owner and operator of multiple gas plant
facilities, brought the following action against several excess insurers
seeking a declaration that these insurers owed a duty to defend and indemnify
the insured for liabilities associated with the investigation and remediation
of the environmental damage at its facilities. In 1994, the insured
first notified the excess insurers of "environmental concerns" at
the facilities - -though no regulatory suit had been filed nor investigation
commenced - - and requested the insurers acknowledge its indemnity obligation
for liabilities the insured may incur. In response, the insurers
generally reserved all rights, including its right to disclaim based on late
notice, and sought documentation showing exhaustion of underlying policy
limits. Shortly thereafter, in early 1995, the New York State
Department of Environmental Conservation commenced a formal investigation.
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Declaratory
Judgment - Fee Shifting
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Court Rules Insurer Must Reimburse Policyholder's Counsel
Fees Incurred in Connection with Declaratory Judgment Counterclaim
American Home Assur. Co. Port Auth. N.Y. & N.J., 2014 N.Y. Misc. LEXIS
2540 (N.Y. Sup. . June 4, 2014)
A New York trial court applied the Mighty Midgets fee-shifting
rule to a policyholder which successfully prevailed on a counterclaim in
response to an insurer's affirmative declaratory judgment action, requiring
the insurer to reimburse the policyholder's reasonable attorneys' fees
incurred in defending against the insurer's lawsuit and in prosecuting its
"mirror image" counterclaim.
An insurer initiated a declaratory judgment against its insured
seeking a ruling regarding its obligations under a policy for underlying
asbestos claims arising out of the construction of the original World Trade
Center. Specifically, the insurer argued it had paid its full policy
limits and sought a had no
further obligation to defend or indemnify its insured for any pending
asbestos claim. The insured answered and asserted four claims, one of
which, was a "mirror-image declaration to the one sought by [the
insurer], i.e. [the insurer] 'is
obligated to provide the [insured] with insurance coverage for the WTC
Asbestos Claims pursuant to the terms of the Policy and applicable
law.'"
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Claims
Made - Late Notice
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Notice Requirement in Claims Made Policy Strictly Enforced; Six
Months' Late Notice Voids Coverage
Templo Fuente De Vida Corp. v. National Union Fire Ins. Co.,
2014 N.J. Super. . LEXIS 1303 (App. . June 6, 2014)
The New Jersey Appellate Division strictly enforced the policy
condition of a claims-made insurance policy that required the policyholder to
notify the insurer of a claim "as soon as practicable" and ruled
that the question of whether the insurer was prejudiced by virtue of late
notice is irrelevant when considering the notice condition in a claims-made
policy.
The insured failed to provide its claims-made insurer with
notice "as soon as practicable" when six months elapsed between the
date on which the insured was served with an underlying complaint to the date
on which the insured notified the insurer of the claim. That finding alone
vitiated coverage, as the "appreciable prejudice" prong of in
New Jersey applies to occurrence policies but not claims-made ones.
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Commercial
Auto - Loading and Unloading Coverage
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Commercial Auto Policy Extends "Loading and
Unloading" Coverage Only Where Negligence Directly Results from
Policyholder's Use of the Insured Auto; Not to Claims Couched in Premises
Liability
Burlington Coat Factory of N.J., L.L.C. v. Jay Dee Trucking,
2014 N.J. Super. . LEXIS 1252 (App. . June 2, 2014)
The New Jersey Appellate Division clarified the scope of
"loading and unloading" coverage prescribed in a commercial auto
policy is limited to circumstances where the insured's alleged negligence
stems from loading and unloading of the insured truck or vehicle, and
declined to extend coverage to claims sounding in premises liability.
In this commercial auto coverage dispute, the underlying
plaintiff sued a premises owner after slipping on a piece of plywood which
bridged the gap between a delivery truck and a loading dock. In
turn, the premises owner sued the insurer of the delivery truck seeking
"loading and unloading" coverage under a commercial auto policy
covering the delivery truck. The Appellate Division rejected the premises
owner's demand for loading and unloading coverage, because the alleged
negligence resulted from a condition of the premises, as opposed to the
actual unloading of the truck.
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Occurrence - Prior Acts Endorsement
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No
Coverage for Philandering Prior Acts Counseling Endorsement
Drew v. Church Mut. Ins. Co., 2014 U.S. Dist. LEXIS 73562
(D.N.J. May 29, 2014)
A priest counseled a man in his parish to get divorced. The
priest neglected to tell the parishioner that he was having an affair with
the man's wife. The priest's insurer was found to have no coverage
responsibility in relation to the eventual settlement pursuant to the
"Prior Acts" endorsement the policy.
A priest had sexual relations with a married parishioner in
early 2009. Soon after, he counseled the woman's husband to acquiesce to her
request for a divorce. The husband learned of the affair and filed suit
against the priest, alleging a breach of fiduciary duty and negligent
infliction of emotional distress. The priest filed a declaratory judgment
action against his insurer after the latter refused to provide or
indemnification. The underlying parties subsequently settled the suit, and
the priest assigned his claim for indemnification under the policy to the
husband.
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