CASES OF CONSEQUENCE
MASSACHUSETTS Mold/Trigger/Loss in Progress
Clarendon National has appealed Judge Sarokin's January 8, 2019 ruling in Clarendon National Ins. Co. v. Philadelphia Indemnity Ins. Co. Civil No. 17-12541 (D. Mass.) that a subsequent liability insurer had no obligation to provide coverage for a tenant's mold claims in light of the fact that the mold problem had begun prior to the beginning of Philadelphia's 2007 policy period and had resulted in numerous complaints to the insured property management company prior to the issuance of the policy.
MASSACHUSETTS Business Risk Exclusions
The Massachusetts Appeals Court has ruled in All America Ins. Co. v. Lampasona Concrete Corp., No. 18-P-247 (Mar. 19, 2019) that a trial court erred in ruling that Exclusion J(6) precluded coverage for the cost of removing and replacing a hospital's flooring structure when the insured subcontractor had only worked on the concrete slab underlying the floor. Under the circumstances, the Appeals Court ruled that the judge had erred in making a factual finding that the flooring was one integrated structure and, furthermore, that the carpeting and vapor barrier over the negligently installed flooring slab were not "that particular property" on which the insured was performing operations at the time.
VIRGINIA Additional Insureds
A federal district court has ruled in Waste Management, Inc. v. Great Divide Ins. Co., 3:17 (E.D. Va. Mar. 12, 2019) that injuries suffered by a truck driver in the course of attempting to fix problems with a "tipper" at a waste disposal facility did not trigger coverage for the suit against the landfill operator because the claims against the landfill operator were not based upon any act or omission on the part of the named insured.
WEST VIRGINIA Ambiguity/Reasonable Expectations
The West Virginia Supreme Court has ruled that an umbrella policy that a Zurich affiliate issued to an auto dealership unambiguously restricted coverage to the dealership and the dealership’s owner and therefore did not cover a permissive use claim involving a vehicle operated by the owner’s son. In State of West Virginia ex rel Universal Underwriters Ins. Co. v. Wilson, No. 18-0509 (W. Va. Mar. 9, 2019), the court ruled that the scope of umbrella coverage was limited to the "Designated Persons" and was not affected by a separate endorsement to the primary policy that extended coverage to persons in the insured’s household. Further, the court declined to find coverage based upon the doctrine of reasonable expectations, which the court sought to clarify: "In order to bring clarity to the bench and bar, we now expressly hold that as a general rule, in order for the doctrine of reasonable expectations to be applicable to an insurance contract, there must be an ambiguity regarding the terms of that contract. However, an exception to this general rule occurs when reliable and relevant evidence, extrinsic to the insurance contract, casts a reasonable doubt as to whether coverage was provided by an otherwise unambiguous policy." The court declined to apply the exception in this case, as the dealership’s claim that it was assured by its insurance agent that the son would be covered was inconsistent with testimony by a 30(b)(6) witness that no such assurances were ever given. The court also justified its ruling on the basis of judicial estoppel, declaring that even though the conventional contours of this doctrine did not apply to these facts, "we now hold that for summary judgment purposes, judicial estoppel may be applied against a litigant to prevent the litigant from using deposition testimony of a nonparty that is not consistent with a position taken by the deponent in a previous case, or with a position taken earlier in the same case."
OTHER DEVELOPMENTS OF NOTE
* * * Inside the Insurance Industry * * *
Lloyd’s Chief Risk Officer Hillary Weaver is leaving after sixteen years.
* * * IBNR Dept. * * *
MillerCoors has sued Anheuser-Busch claiming that the beer giant’s recent ad campaign was seeking to frighten consumer by implying that Miller Lite contains corn syrup (who knew that Miller Lite contains anything tasty or nourishing).
* * * Cyber Update. * * *
Here the latest newsletter from MM’s cyber-practice group.
* * * Mark Your Calendars * * *
DRI Insurance Coverage and Claims Institute
Loews Hotel Chicago
April 3-5, 2019
Emerging and Environmental Claims Managers Association Conference
May 1-3, 2019
DRI Insurance Bad Faith Conference
Westin Washington, D.C.
June 5-7, 2019