Jul 1 2022

Insurance Law - Week of July 1, 2022


Policyholders are pinning their hopes on the Washington Supreme Court to arrest the growing trend in pro-insurer COVID rulings. The court heard oral argument on Tuesday in Hill and Stout PLLC v. Mutual of Enumclaw Insurance Co.. According to press reports, the court’s embrace was less than fulsome.

The Arkansas Supreme Court ruled last week in The Travelers Ind. Co. v. The Board of Trustees of the University of Arkansas, 2022 Ark. 145 (Ark. June 23, 2022) that a trial court abused its discretion in refusing to grant the pro haec vice application of Robinson & Cole’s Stephen Goldman on the basis that he signed an electronically-filed document that failed to comply with state filing rules. The court split, however, on the issue of whether it had jurisdiction to reverse the trial judge’s order excusing potential jurors who were not fully vaccinated.

The Appellate Division of the New Jersey Superior Court handed insurers two more wins last week, ruling in Rockleigh Country Club v. Hartford Ins. Group, No, A-1826-21 (App. Div. June 21, 2022) and AC Ocean v. American Guarantee & Liability Ins. Co., No. A-1824-21 (App. Div. June 23, 2022) that these claims did not involve “direct physical loss.” In a surprisingly lengthy opinion, the AC Ocean court further ruled that these claims were subject to contamination exclusions that the trial court had found to be ambiguous or restricted to pollution losses.

The Eighth Circuit sustained an insurer’s win in a Minnesota case last week, declaring in Torgerson Properties, Inc. v. Continental Cas. Co., No. 21-1663 (8th Cir. June 28, 2022) that the shut down of the insured’s busines properties was due to governmental orders and not any contamination on the property.


CALIFORNIA           Opioid Claims/Jurisdicton/Bellweather Casews

The California Court of Appeal has ruled in St. Paul Fire & Marine Ins. Co. v. Amerisourcebergen Corp., G059967 (Cal. App. June 20, 2022) that a judge in the Orange County Superior Court did not abuse its discretion in staying St. Paul’s California DJ so that a “bellwether” opioid coverage suit could go forward in West Virginia. The Fourth District declared that Travelers had failed to show that its claims were sufficiently different from the West Virginia dispute to require independent disposition and emphasized the virtues of “employing a bellwether case in a complex matter like this can serve to winnow and sharpen not only discovery, but claims, defenses, calendaring decisions, motion practice, arguments, hearings or trial, adjudication, indeed every aspect of the litigation process—to the benefit of the parties, the court, and the public alike.”

ILLINOIS           “Professional Services” Exclusion/Duty to Cooperate

The Illinois Appellate Court has ruled that a welder was not performing “professional services” when he accidentally set fire to a condominium unit while working on pipes in the unit. In Stonegate Ins. Co. v. Smith, 2020 IL App (1st) 210931 (Ill. App. June 22, 2022), the court ruled that the “professional services” exclusion required the insurer to show that the insured’s acts were predominantly mental, whereas here the cause of the loss in this case was essentially menial or physical activity. Further, the court refused to find that the insured’s delay in giving notice of this loss was unreasonable and declined to find that the insured’s failure to cooperate voided coverage in light of the insurer’s perfunctory efforts to contact him for his help.

NEW YORK           Arbitration/Jurisdiction

The Appellate Division of the New York Supreme Court ruled last week in Westport Ins. Corp v. HBC U.S. Holding, 2022-0230 (App. Div. June 21, 2022) that an arbitration clause in Westport’s policy was not in conflict with a clause requiring that any disputes under the policy be litigated in New York.

SOUTH DAKOTA           Farm Liability/Concurrent Cause Doctrine

The South Dakota Supreme Court has ruled in Nationwide Agribusiness Ins. Co. v. Fitch, 2022 S.D. 36 (S.D. June 15, 2022) that serious personal injuries that a worker suffered when a “Gator” tractor rolled on top of him while spraying for weeds on the insured’s farm did not trigger Nationwide’s farm liability policy. While finding questions of fact as to whether the claimant was an “employee,” the Supreme Court agreed with the trial court that the policy’s “Recreational Vehicle Liability Coverage Endorsement” excluded coverage for the Gator when, as here, it was used for farming purposes. The Supreme Court rejected the claimant’s argument that the exclusion did not apply because a “concurrent cause” of his loss was the insured’s negligence.


Inside the Insurance Industry

S&P Global Insurance reports that P/C insurers will finish 2022 with a combined ratio in excess of 100 for the first time in years as inflationary concerns roil the markets.

Having already withdraw from homeowners and rental property markets in Florida, Progressive announced that it would also no longer write dwelling fire (DP3) coverage in the Sunshine State.

New Coverage Cases of Consequence

The landlord of the Annapolis Capital Gazette has filed suit against the newspaper’s liability insurer, demanding a defense to law suit suits arising out of the mass shooting at the newspaper’s headquarters on June 23, 2018.

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