Recent Decisions
John W. Fried to Speak at American Bar Association's Tort Trial & Insurance Practice Annual Meeting
August 7-11, 2008 at the Waldorf Astoria, New York, NY. Mr. Fried will speak at the August 9, 2008 session titled "Billing Guidelines and Auditors - Are They Ethical? Are They Legal?" To register for the Annual Meeting and the sessions, please visit http://www.abanet.org/tips/am08/home.html
NEW YORK HIGH COURT FINDS CONSEQUENTIAL DAMAGES AVAILABLE TO POLICYHOLDERS BRINGING FIRST-PARTY INSURANCE COVERAGE AND BAD FAITH CLAIMS
Two new decisions of the New York Court of Appeals (New York’s highest court) promise to change the face of insurance coverage litigation in New York. On February 19, 2008, the Court of Appeals held that policyholders who seek recovery for their insurers’ bad faith breach of their insurance policies can assert claims for “consequential damages.”
View Bi-Economy Decision
View Panasia Decision
New York High Court Reaffirms Multiple-Occurrence Ruling
On May 1, 2007, the Court of Appeals of New York denied a motion for reargument of its original decision in Appalachian Insurance Company v. General Electric Company, 863 N.E.2d 994 (N.Y. 2007). By that denial, the Court dashed any remaining hopes that General Electric would obtain excess insurance coverage in connection with hundreds of thousands of personal injury claims arising from alleged exposure to GE’s asbestos-insulated steam turbines. In its original decision, the Court of Appeals held that the steam turbine claims constituted multiple “occurrences,” because the exposure of claimants differed in time, place and length. Since GE’s share of the typical judgment in connection with the turbine claims averaged only $1,500, and GE’s London Market excess policies did not attach unless the $5 million per-occurrence limit of its primary insurance was exceeded, no excess coverage would be available for the turbine claims.
The Court of Appeal’s multiple-occurrence ruling is at odds with a number of cases in other jurisdictions holding that the manufacture of an asbestos-containing product constitutes a single “occurrence,” for purposes of insurance coverage. Part of the reason for the New York decision likely rests on New York’s “unfortunate events” test for determining the “number of occurrences,” which focuses on “the nature of the incident giving rise to damages,” as opposed to the “cause” of the underlying injuries. For a copy of the decision, click here.
Insurer's Claim for Retrospective Premiums Barred by Statute of Limitations
In Reliance Insurance Company (In Liquidation) v. Griffin Dewatering Corporation, Case No. 2:05 CV 281 (N.D. Ind. 4/17/07), an Indiana federal magistrate judge recently became the first judge in Indiana to address the statute of limitations issue in the context of retrospective premium payments. The policyholder in the case, Griffin Dewatering, was represented by Fried & Epstein LLP. Griffin successfully moved for partial summary judgment, arguing that its insurer’s claim for breach of contract in connection with the payment of over $600,000 in retrospective premiums was barred, in major part, by the statute of limitations.
In addressing Griffin’s argument, the magistrate examined when Reliance’s claim for breach of its retrospective premium policy had accrued, an issue that has been addressed by only a handful of cases across the country. In light of the terms of the agreement between Griffin and Reliance, the magistrate rejected Reliance’s argument that the statute of limitations did not accrue until the final retrospective adjustment on its policy was rendered. Instead, the magistrate adopted the approach argued for by Griffin and applied in the majority of cases to address the issue--that, for statute of limitations purposes, each retrospective premium payment was a separate, enforceable obligation on which the statute of limitations accrued when it was invoiced and not paid. For a copy of the decision, click here.
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