In MAve Hotel Investors LLC d/b/a The MAve Hotel, et al. v. Certain Underwriters at Lloyd’s, London, et al., 2024 WL 2830909, (S.D.N.Y. 2024), to preserve diversity jurisdiction, the United States District Court for the Southern District of New York permitted a plaintiff insured to drop non-diverse, dispensable defendant Underwriters at Lloyd’s, London (“Underwriters”) which subscribed to a commercial property insurance policy. About The Authors
The New York Supreme Court recently weighed in on what constitutes “reasonable care” to maintain heat in the context of a first-party insurance policy exclusion requiring such reasonable care. In Michael Zimmerman v. Leatherstocking Cooperative Insurance Company, CV-23-0362, 2024 NY Slip Op 02113 (April 18, 2024), the Plaintiff was in the process of selling his home in Saratoga Springs, New York. The house was insured under a homeowners policy issued by Leatherstocking Cooperative Insurance Company. On January 2, 2019, a real estate broker arrived at the house and discovered extensive water damage. Plaintiff, who had left for an extended vacation a month prior, notified Leatherstocking of the loss. About The Authors
In Mankoff v. Privilege Underwriters Reciprocal Exchange (2024 WL 322297 (Tex. App.—Dallas Jan. 29, 2024)), the Court determined that the term “windstorm” was ambiguous as utilized in the subject insurance policy. About The Authors
Introduction In a case of first impression, the United States District Court for the District of Columbia (applying Illinois law) rejected a LEG3 exclusion as ambiguous. See S. Capitol Bridgebuilders “SCB” v. Lexington Ins. Co., 2023 U.S. Dist. LEXIS 176573 (D.D.C. Sep. 29, 2023). The London Engineering Group (“LEG”) is a consultative body for insurers of engineering class risks. Nearly 30 years ago, LEG introduced a series of defects exclusions, including LEG1, LEG2, and LEG3 (which was revised in 2006). Each provides increasing levels of coverage, with LEG3 being the broadest. Generally, while preserving some coverage, LEG3 purports to exclude costs incurred to improve defects of “material workmanship, design, plan, or specification.” Until now, despite frequent usage in builder’s risk…
A recent New Jersey Appellate Division ruling follows the general trend nationally in which courts are, by and large, rejecting insureds’ claims for coverage for business income losses due to government orders related to preventing the spread of Covid-19. While there have been certain outliers, like the Louisiana Fourth Circuit Court of Appeal’s deeply divided plurality decision earlier this month in Cajun Conti LLC, et al. v. Certain Underwriters at Lloyd’s, et al., the overwhelming majority of courts have ruled in favor of insurers. Specifically, courts have consistently recognized that physical alteration or damage to covered property is a prerequisite for triggering business interruption coverage under a first-party insurance policy. Further, courts have almost uniformly enforced virus exclusions. In this…
In a timely reaffirmation of the Fifth Circuit’s 2007 ruling in Leonard v. Nationwide Mut. Ins. Co., a Louisiana federal court recently upheld the application of an insurance policy’s Anti-Concurrent Causation Clause (“ACC”) in precluding coverage for property damage caused by a combination of storm winds and flooding. In Chad Little, et al. v. Aegis Security Insurance Co., Case No. 2:21-CV-00997 (W.D.La. July 9, 2021), the Western District of Louisiana granted defendant-insurer’s motion for summary judgment holding that the defendant-insurer proved that both a covered peril (storm winds) and an excluded peril (flooding) contributed to the losses claimed by the plaintiffs-insureds, and that as a result of the application of the policy’s ACC, all coverage was precluded. About The Authors
A federal court recently held that ongoing insurance coverage issues should not prevent an appraisal from going forward as per an appraisal clause in the insurance policy. In DC Plastic Products Corp. v. Westchester Surplus Lines Insurance Co. Case No. 17-13092 (D.N.J. May 19, 2021), the District Court of New Jersey directed the parties to proceed with the appraisal process as set forth in the relevant policy, despite the defendant-insurer’s argument that appraisal is improper under New Jersey law where unresolved coverage issues exist. Plaintiff DC Plastics Products Corporation (“DC Plastics”) made an insurance claim to its insurance carrier Westchester Surplus Lines Insurance Co. (“Westchester”) after DC Plastics’ premises in Bayonne, New Jersey was damaged as a result of Superstorm…
The Southern District of New York recently held that a contamination exclusion was ambiguous in the context of Covid-19-related business interruption losses. Accordingly, the court held that the issue was inappropriate to decide at the summary judgment stage and denied both parties’ cross-motions for summary judgment. In Thor Equities LLC v. Factory Mut. Ins. Co., No. 1:20-cv-03380 (S.D.N.Y. Mar. 31, 2021), an insured commercial property owner sought business interruption coverage under its property insurance policy. The parties filed cross-motions for summary judgment, asking the court to determine the applicability of two exclusions, one of which was a contamination exclusion. The exclusion excluded “contamination, and any cost due to contamination including the inability to use or occupy property or any…
A trial level court in North Carolina recently found coverage under first-party property insurance policies for the insured restaurants’ COVID-19-related business income losses. In North State Deli, LLC et al. v. Cincinnati Ins. Co., et al., Case No. 20-CVS-02569 in the General Court of Justice, Superior Court Division, County of Durham, Judge Orlando F. Hudson, Jr. granted partial summary judgment to the plaintiff-insureds, finding that plaintiffs’ business income losses resulting from the governmental shutdown of its business constituted a “loss” to property, sufficient to trigger coverage under the Cincinnati policies. Although similarly situation insureds will undoubtedly rely on this decision in support of their claims for coverage, it is important to note that the North State Deli decision relies heavily…
In Jowite Limited Partnership v. Federal Insurance Company, the United States District Court for the District of Maryland issued a rare opinion addressing whether “collapse” is a covered “ensuing loss” under an all-risks insurance policy without a specific collapse coverage. Case No. 1:18-cv-02413-DLB (D. Md. August 17, 2020). In a win for insurers, the Court held that, under Maryland law, the ensuing loss exception to a construction defect exclusion did not apply to reinstate coverage where the purported “collapse” was to the defective property itself, regardless of whether the “collapse” was characterized as merely the damage caused by construction defects or a separate and distinct peril. The insured, Jowite Limited Partnership (“Jowite”), owned an apartment complex constructed in…
