Can an insured settle a disputed claim with its first party insurer and then sue the insurer for allegedly fraudulently inducing a settlement of the claim for less than it is worth? The California Supreme Court answered no in Village Northridge Homeowners Assoc. v. State Farm Fire and Cas. Co., 2010 Cal. LEXIS
First Party Insurance
Fifth Circuit Considers Business Interruption Coverage After Hurricane Katrina
By Tred R. Eyerly on
The insured had a commercial property policy with Lexington. Coverage included $25 million in losses for business interruption. See Consolidated Co. Inc. v. Lexington Ins. Co., 2010 U.S. App. LEXIS 17146 (5th Cir. Aug. 17, 2010).
Hurricane Katrina damaged the insured's property and equipment. The insured was able, however, to resume partial operations ten days…
Burden of Proving Damage Caused by Both Covered and Non-Covered Risks Addressed
By Tred R. Eyerly on
When both a covered risk and a non-covered risk cause some of the property damage, which party bears the burden of identifying the discrete items of property that were damaged and proving what portion of the damage was caused by a non-covered or excluded risk? See Bayle v. Allstate Ins. Co., 2010 U.S.
Mold Damage to Personal Property Covered
By Tred R. Eyerly on
Although the insurer contended the Texas Supreme Court had previously decided that mold was never covered under a homeowner's policy, the Court found coverage for mold damage to personal property in State Farm Lloyds v. Page, 2010 Tex. LEXIS 415 (Tex. June 22, 2010).
The insured discovered mold and water damage to…
Anti-Concurrent Causation Clause Does Not Bar Excess Coverage
By Tred R. Eyerly on
The Fifth Circuit considered whether the district court properly determined that an excess policy covered flood, but that coverage was limited under the policy's anti-concurrent causation clause (post on district court's prior decision here). The appellate court reversed in part and remanded. Stewart Enter., Inc. v. RSUI Indem. Co., Inc., 2010 U.S. App. LEXIS 16555(5th…
Fifth Circuit Certifies Question to Louisiana Supreme Court on Assignment of Policies
By Tred R. Eyerly on
The Fifth Circuit asked the Louisiana Supreme Court whether a policy's anti-assignment clause prohibited post-loss assignments of policy rights. See In Re: Katrina Canal Breaches Litigation, 2010 U.S. App. LEXIS 15603 (5th Cir. July 28, 2010).
After Hurricanes Katrina and Rita, Louisiana distributed federal funds to homeowners under its "Road Home" program for repair…
Insurer’s Motion to Void Policy for Misrepresentation Fails
By Tred R. Eyerly on
If the insured misrepresents that it owns the insured property, can the insurer void the policy? In Grenoble House Hotel v. Hanover Ins. Co., 2010 U.S. Dist. LEXIS 75355 (E.D. La. July 26, 2010), the court denied the insurer's motion for summary judgment seeking to void the policy on misrepresentation grounds.
Hanover…
Anti-Concurrent Causation Clause Bars Coverage
By Tred R. Eyerly on
The Fifth Circuit considered the impact on coverage when an anti-concurrent causation clause seems to be contradicted by a "reverse" anti-concurrent causation clause in an endorsement. See Penthouse Owners Assoc., Inc. v. Certain Underwriters at Lloyds, London, 2010 U.S. App. LEXIS 14531 (5th Cir. July 14, 2010).
Penthouse's property was completely destroyed by Hurricane…
Jury Instructions for Anti-Concurrent Causation Clause Considered
By Tred R. Eyerly on
In a case involving destruction of a mobile home by Hurricane Ivan, the Florida Court of Appeal addressed proper jury instructions regarding the burden of proof under an anti-concurrent causation clause. Citizens Prop. Ins. Corp. v. Hamilton, 2010 Fla. App. LEXIS 9885 (Fla. Ct. App. July 7, 2010).
The insureds had both a…
Validity of Negligence Claim Against Broker Certified to Florida Supreme Court
By Tred R. Eyerly on
In Tiara Condominium Assoc., Inc. v. Marsh & McLennan Co., Inc., 2010 U.S. App. LEXIS 10835 (5th Cir. May 27, 2010), it was unclear whether, under Florida law, the economic loss rule foreclosed claims for negligence and breach of fiduciary duty against the insurance broker. Accordingly, the Fifth Circuit certified the question to the Florida…