May 20 2022

Insurance Law - Week of May 20, 2022


In Commodore, Inc. d/b/a GreenStreet Café, Inc. v. Certain Underwriters at Lloyd’s, London, No. 3D21-0671 (Fla. App. Ct. May 11, 2021), the Florida District Court of Appeal declined to find that the First District’s 1996 Azalea opinion compelled a finding that the inability to use real property constituted “direct physical loss” and declared that it would instead follow its 2017 Maspon opinion in which it had declared that physical loss must be “actual.” As a result, the court concluded that “loss of intended use alone, without tangible alteration to the property, is not sufficient to trigger coverage under the plain language of the Policy.”

The Eleventh Circuit issued a short opinion last week in Café Int’l Holding Co. v. Chubb, Ltd., No. 21-13390 (11th Cir. May 11, 2022)(unpublished) sustaining a Florida District Court’s 2021 declaring that an Italian restaurant did not suffer direct physical loss.

The Eleventh Circuit announced last week that it was cancelling the oral argument that had been scheduled in First Watch Restaurant’s suit against Zurich and would proceed to decide the appeal without a hearing.

The Louisiana Court of Appeals has ruled in Foot Locker, Inc. v. Zurich American Ins. Co., 2021-CA-0594 (La. App. May 13, 2022) that a trial court did not err in granting an insurer’s forum non conveniens motion, nor was Zurich required to present “clear and convincing” evidence to prove that the case belonged in New York.


FIFTH CIRCUIT           Class Actions/”Minimal” Diversity Jurisdiction (LA)

The Fifth Circuit has ruled in Turner v. GoAuto Ins. Co., No. 22-30103 (5th Cir. May 2, 2022) that a class action against an auto insurer did not meet the “minimal diversity” requirements of the federal Class Action Fairness Act. Although CAFA does not require insurers to prove complete diversity, the Fifth Circuit ruled in this case that once the trial court allowed the plaintiffs to amend their complaint to described themselves as “citizens of Louisiana” and not just “residents,” there were insufficient allegations to show that any of these claimants were citizens of other states.

SEVENTH CIRCUIT           Suit Limitation Period (IN)

The Seventh Circuit has ruled that an Indiana trial court did not err in dismissing a condo association’s suit that was filed more than two years after the insured property suffered hail damage. In Legend’s Creek Homeowners Assoc. v. Travelers Ind. Co. of America, No. 30-3163 (7th Cir. May 10, 2022), the court ruled that insurers have no affirmative duty to warn insureds that they only have two years to bring suit. Further, the court refused to find that Travelers had in any way misled its insured such that the limitations period should be tolled.

EIGHTH CIRCUIT           Assault and Battery Exclusion (MO)

The Eighth Circuit has ruled that a Missouri District Court was correct in holding that an assault and battery exclusion eliminated coverage for injuries that a bar patron suffered when he was beaten by an employee in the bar parking lot. In Great Lakes Ins. SE v. Andrews, No. 21-1725 (8th Cir. May 10, 2022), the court ruled that this was a “text book” case of assault and battery. The court rejected the bar’s argument that the claims against it were based on negligent hiring and supervision and therefore did not “arise out of” an assault. The court held that the “arising out of” language applied to how the bodily injury occurred rather than how the law suit was brought. The court also refused to apply the “concurrent proximate cause” rule given that all of the allegations of negligence were for conduct that was specifically enumerated in the assault and battery exclusion.

NEW YORK           Auto/”Use”/Loading and Unloading

The Appellate Division ruled last month in Tishman Construction Corp. v. Zurich American Ins. Co., 2022 NY Slip Op 02886 (App. Div. April 28, 2022) that an automobile liability exclusion in a CGL policy did not preclude coverage for a personal injury suit brought by a truck driver who, after loading his truck, fell in a hole on a customer’s property as he was walking to the back of a warehouse to see how he could back out. Although the policy stated that “use” includes loading and unloading, the court declared than "an accident does not arise from the 'use' of an automobile merely because it occurs during the loading or unloading process but rather must be the result of some act or omission related to the use of the vehicle." Further, the court refused to find that the process of unloading was not completed merely because the employee was injured while looking for a clear exit path.


Industry News

Boston-based Robert Rogers, who had been AIG’s global head of construction professional liability, has joined Aon PLC as a managing director.

Tort News

The cap on pain and suffering in med mal cases in California, which has been fixed at $250,000 since 1975, will gradually rise to $750,000 for injured patients and $1 million for families of deceased patients over the next decade if Governor Newsom signs a bill that received unanimous approval from the California legislature.. After that, the caps will increase 2% every year to keep up with inflation.

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