Two recent opinions illustrate the on-going conflict with respect to whether pollution exclusions should apply to companies that do not cause pollution but nonetheless face pollution-related liabilities. At the heart of these cases is the question whether the literal wording of the policy should control or the insured’s expectation of coverage.
Continue Reading...While all but two states permit insurers to use staff counsel to represent their insureds, many have adopted rules requiring defense counsel to clearly explain that they are employees of the insurance company. Yet how can counsel do so in a trial context without improperly introducing the fact of the existence of insurance, to the prejudice of insured and insurer alike?
Five years ago, the Florida Supreme Court adopted a new Rule 4-7.10 back in 2003 requires staff counsel to advise their insured client of their relationship at the very outset of the representation. On the other hand, staff counsel need not disclose their relationship with their insurer during the trial or representation of the policyholder as Florida courts have recognized the public policy of not disclosing the existence of insurance coverage to juries.
Despite this seemingly sensible resolution of the issue, the same problem resurfaced in West Virginia, a state that often seems to create headaches for insurers..
Continue Reading...Pro se parties can be the bane of litigation. They come up with crazy legal theories, often fail to play by the rules and sometimes view litigation as a contact sport (but so do counsel sometimes, lest we sound too high and mighty here). Moreover, one often suspects that a pro se party generally has a lawyer friend or relation drafting their pleadings.
Such is the case with a new opinion from a new opinion from the federal district court in Nashville, Tennesse in a case with tangled roots in Massachusetts and Tennesse. The court not only denied the defendant insured's motion to dismiss the Tennessee litigation but granted the Plaintiff Insurer's "Motion for Order Requiring Defendant To Show Proof That She Signed "Pro Se" Motion to Dismiss And/Or Acknowledge Any Ghostwriter Attorneys of the "Pro Se" Motion."
High marks to the insurer lawyer who was creative enough to come up with the idea, much less the title (who knows which FRCP this was filed under, however!). But I worry about the precedent. What's next? requiring outside counsel to disclose their role in drafting interrogatory answers or reservation of rights letters? The horror.
The Appellate Court has rejected a wife’s contention that she was entitled to coverage for the loss of the family home despite her husband’s conviction for arson. In Aurelius v. State Farm Fire & Cas. Co., No. 2-07-0266 (Ill. App. August 5, 2008), the Second District affirmed a lower court’s declaration that the homeowner’s policy unambiguously barred coverage for first party losses resulting from intentional acts by “you or any person insured under this policy.”
Continue Reading...Even as briefing has begun before the Massachusetts Supreme Judicial Court with respect to the issue of allocation, Vermont has joined the growing number of Northeastern states adopting a “time on the risk” approach in long-tail cases. In its first comprehensive assay into the murky world of environmental jurisprudence, the Vermont Supreme Court has ruled in Towns v. Northern Security Ins. Co., 2008 VT 98 (Vt. August 1, 2008), that (1) a continuous trigger is appropriate, not “manifestation;” (2) the own property exclusion does not apply to groundwater contamination; (3) even de minimis levels of environmental contamination constitute “property damage;” and (4) a waste hauler’s use of debris from his business to redevelop his personal home is not subject to the “business pursuits” exclusion in a homeowner’s policy.
Continue Reading...The "Eight Corners Rule" has become so ridiculous in its application that now plaintiff lawyers actually have a huge financial disincentive to plead their claims against the insured defendant with any degree of factual specificity lest the true allegations become an impediment to collecting insurance money from the defendant's liability insurer. Today in many states, the more ambiguous the petition, the better the coverage arguments. A recent example of just how preposterous things are getting recently came from New Orleans when the Fifth Circuit decided Gore Design Completions, Ltd. v. Hartford Fire Ins. Co., 2008 WL 2955568 (5th Cir. August 4, 2008). In this decision, the Fifth Circuit reversed summary judgment for the carrier and remanded the case finding a duty to defend in an arbitration action. How they did so illustrates the unfortunate state of the "Eight Corners Rule" in many jurisdictions.
Continue Reading...Global Warming. Has there ever been a topic that generated so many seminars and articles by lawyers hopeful of getting work? (well yes, there was Y2K). So will climate change claims be Asbestos II or just a flash in the pan?
Unlike asbestos, clergy abuse, intellectual property or other progenitors of mass coverage litigation in recent years, my guess is that climate change is not so much likely to be a discrete coverage controversy as a phenomenon that influence how societies, businesses and individuals interact that will, in turn, generate diverse types of first and third party claims. In the near term, we may have just seen the first shot fired in the Climate Change Coverage Wars.
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