National Insurance Law Forum : Insurance Litigation Lawyer & Attorney : National Insurance Law Forum : Insurance Coverage, Bad Faith Litigation

In Cain Petroleum Inc. v. Zurich American Insurance Company, Court of Appeals of Oregon, A134133 (December 3, 2008), the Oregon Court of Appeals upheld a distinction in a “Storage Tank System Third Party Liability and Cleanup Policy” between scheduled and unscheduled underground storage tanks (“USTs”). The policy provided coverage for environmental cleanup costs and third party liability caused by releases from a “scheduled storage tank system” at a “scheduled location” after a “retroactive date.” It was undisputed that the location at issue was a scheduled location and that the location included three scheduled tanks installed in 1994. It was also undisputed that the retroactive date on the policy was 1991. Finally, it was undisputed that the contamination at the site did not come from any of the three scheduled USTs.

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The Supreme Court of Washington’s recent decision in St. Paul Fire and Marine Ins. Co. v. Onvia, Inc., 2008 Wash. LEXIS 1055 (November 26, 2008) addressed two claims commonly alleged against insurers in coverage disputes: “bad faith” and violation of the Consumer Protection Act. The matter reached the Court upon certified questions from the United States District Court for the Western District of Washington. The first question was whether an insured has a cause of action under Washington law “against its liability insurer for common law procedural bad faith for violation of the Washington Administrative Code and/or for violation of the Washington Consumer Protection Act (CPA), chapter 19.86 RCW, even though a court has held that the insurer had no contractual duty to defend, settle, or indemnify the insured?” Second, assuming a ‘yes’ answer to the first question, must the insured “prove that the insurer’s conduct caused actual harm, or should the court apply a presumption of harm?” Third, “[h]ow should damages be measured?” 2008 Wash. LEXIS 1055 at *2.

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So you haven't finished your holiday shopping yet?  No worries--here are three new matters that are due to be decided shortly in Massachusets, Pennsylvania and Texas that every insurance maven will want on their year end wish list!

1.  Boston Gas v. Century Indemnity, SJC 10246  (Mass.)

The Supreme Judicial Court will hear oral argument on January 8, 2009 on allocation issues certified to it from the First Circuit in Century Indemnity's appeal from this pollution clean up case, Boston Gas v. Century Indemnity Co., 529 F.3d 8 (1st Cir. 2008)    At issue is whether a federal district court erred in allowing a gas utility to allocate the entire cost of cleaning up a former MGP site to excess coverage issued in the 1960s.  Unlike several neighboring states (CT, NH, NY, VT), whose Supreme Courts have adopted pro rata approaches to long tail cases, Massachusetts has, to date, appeared to go its own way as lower courts have permitted "spking" whether on an "all sums" or joint and several theory. 

The Boston Gas appeal has drawn significant attention from amici despite the fact that tjhe SJC, contrary to its recent practice, made no formal request for amicus briefing.  

It will be interesting to see if the attitude of the court is affected by the fact that Judge Botsford, who authored the trial court in Rubenstein v. Royal Ind. adopting joint and several liability, is now sitting on the SJC.  Another interesting sidebar will be whether Ralph Gants plays a role.  Gants, who was nominated this week by Governor Patrick to take the seat of retiring Justice Greaney, must still be approved by the Governor's Council, which may or may not take place in the next 30 days.  Gants currrently sits in the state's business court where he has devoted significant time and attention to insurance issues, albeit with mixed results for carriers. 

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