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

Hutchings sued Yuter, Neustein and Ten Seventy One for his injuries. They tendered the defense and indemnification of Hutching’s suit to their insurer, Liberty Mutual, who disclaimed coverage. Yuter, Neustein and Ten Seventy One then sued Liberty Mutual for defense and indemnification. Liberty brought a third party action against Greenwich Insurance seeking a declaration that Yuter, Neustein and Ten Seventy One are insureds under its policies and that the policies are primary to the Liberty policies. Greenwich issued two liability policies, both of which were in effect on the date of the accident, but neither of which listed 3001 Arlington a designated premises for coverage.

The Greenwich policies included endorsements titled “Limitation of Coverage to Designated Premises or Project.” The endorsement provided coverage for “bodily injury . . . arising out of . . . the ownership, maintenance or use of the premises shown in the Schedule and operations necessary or incidental to those premises” (emphasis added). Neither Greenwich policy Schedule listed 3001 Arlington as a designated premises. Liberty argued that 3001 Arlington, as the office for premises that were listed on the Greenwich policies’ Schedule, was covered as “operations necessary or incidental to” the other, scheduled premises.

Greenwich moved to dismiss Liberty’s complaint pursuant to CR 12(b)(6) and the court granted its motion. It explained the phrase “operations necessary or incidental to” scheduled premises has a spatial meaning extending the premises listed on the schedule to certain non-scheduled, appurtenant spaces such as location entryways “necessary or incidental” to the enjoyment or use of the insured premises. The court refused to more broadly construe the phrase to include 3001 Arlington. The fact that 3001 Arlington was Ten Seventy One’s business address did not allow Liberty to essentially reform the Greenwich policies to hold it liable for insuring a premise not contemplated in its agreements with its insured.

Wormuth sued for attorney’s fees incurred in responding to State Farm’s removal petition, relying on 28 U.S.C. § 1447(c) which allows a court to award attorney’s fees where the removing party lacks an objectively reasonable basis for seeking removal. State Farm argued the federal court lacked jurisdiction to consider Wormuth’s motion because she failed to request fees in the remand order itself and because its removal was based on objectively reasonable grounds. The trial court found State Farm lacked an objectively reasonable basis for removing the case and awarded Wormuth 60% of the fees requested.

Also on May 21, 2008, in Gulley v. Farmers Ins., 2008 U.S. Dist. LEXIS 40666, the U.S. District Court for the Western District of Oklahoma held the jurisdictional requirement for diversity jurisdiction had been met after considering together the allegations in plaintiff Gulley’s complaint and defendant Farmers’s notice of removal. Gulley sued Farmers for breach of contract and bad faith for failure to timely evaluate and pay Gulley’s underinsured motorists claim, alleging, among other things, that she had “repeatedly requested” Farmers provide her an evaluation of her claim but Farmers failed to do so. Her complaint sought contract damages of $30,000, unspecified compensatory damages and punitive damages “greater than $10,000.”

Farmers’ petition stated that Oklahoma law allowed a punitive damages award equal to actual damages or $100,000, whichever is greater. The punitive damages number together with the allegations in Gulley’s complaint that Farmers ignored her repeated requests to evaluate her claim, that she was owed $30,000 on her breach of contract and that her unspecified compensatory damages may conceivably include emotional distress or economic damages resulting from Farmers’ conduct, persuaded the court that the amount in controversy had been met.