A recent decision from one of New York’s trial courts of general jurisdiction could have a chilling effect on written communications between an insurer and its retained counsel during a claim investigation. In Otsuka America, Inc. v. Crum & Forster Specialty Insurance Co., 2019 WL 4131024, Judge Andrea Masley of the Supreme Court of the State of New York, New York County, ruled that several communications between Crum & Forster (CF) and its attorney (including the attorney’s coverage opinion letter), were not privileged and must be produced. The Court found that CF retained counsel, in part, to provide an opinion on whether the insured’s claim was covered. Determining whether a claim is covered is part of the regular business of…
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New York Ruling Could Significantly Impact Disclosure of Communications Between Insurer and Counsel
Tagged with: Bad Faith, Discovery, Investigation, Loss Adjustment, Privilege, U.S. Legal System
Posted in Bad Faith, Discovery, Investigation, Loss Adjustment, Privilege, U.S. Legal System
Posted in Bad Faith, Discovery, Investigation, Loss Adjustment, Privilege, U.S. Legal System
Texas Reforms Insurance Litigation – Section 542A of the Texas Insurance Code 60 Days to Get Your House in Order
Texas has finally enacted statutory reforms specifically designed to combat abusive insurance litigation. Enacted primarily in response to hailstorm lawsuits, the scope of the reforms are much broader. Effective September 1, 2017, Section 542A of the Texas Insurance Code governs all lawsuits arising out of insurance claims where the damage was caused, either directly or indirectly, by the weather or other “forces of nature.” Importantly, Section 542A finally affords insurers the opportunity to amicably resolve disputed claims without protracted litigation. However, insurers need to be prepared to make quick strategic decisions to take advantage of the law’s protections. The practical effect of Section 542A is to give insurers 60 days to “get their house in order” and make decisions that…
Connecticut Court Holds No Cause Of Action Against Independent Adjuster For Negligence
The states are divided over whether an independent adjuster can be sued for negligence by the insured, and no Connecticut appellate court has ever addressed that issue. Last Tuesday, however, one of the state’s federal courts predicted that the Connecticut Supreme Court would hold that the adjuster owes no duty to the policyholder in Danielsen v. USAA Cas. Ins. Co., et al., 2015 U.S. Dist. LEXIS 158387, 2015 WL 7458513 (Nov. 24, 2015, D. Conn.), and it dismissed the complaint’s negligence count against the adjuster. The insured owned a home in Madison that suffered water damage from a malfunctioning dishwasher, and he brought suit against the carrier and its independent adjuster, alleging that they had underpaid the loss. The allegations…
New York Court Holds Public Adjuster Entitled to Fee Even Though Claim Settled After Ten Years Of Litigation
Disputes between the insured and its public adjuster (PA) are frequently contentious and have the unfortunate potential to draw the carrier into litigation. A perfect example is last week’s decision in Public Adj. Bur., Inc. v. Greater N. Y. Mut. Ins. Co., et al., 2015 NY Slip OP 07942, 2015 WL 6510639, 2015 N.Y. App. Div. LEXIS 8000 (N.Y.App.Div., Oct. 29, 2015), where New York’s intermediate level appellate court held that the PA was entitled to its fee for performing “valuable services” even though those evidently ceased when suit was filed and it then took an additional ten years of bitter and protracted litigation to bring about a settlement. While not as prolonged and torturous as Dickens’ Jarndyce v. Jarndyce,…
New Jersey Judge Writes a Primer on How Not to Draft a Denial Letter
Last month, a federal trial court in New Jersey shot down an insurer’s arguments that it had unambiguously denied coverage for Superstorm Sandy damage in a letter to the insured. In Liguori v. Certain Underwriters at Lloyds, 2015WL 4402851. 2015 U.S. Dist. LEXIS 93090 (D.N.J., Jul. 17, 2015), the judge found that correspondence announcing that the carrier was “pleased to inform you” that wind damage was covered while flood was “expressly excluded” and concluding with what he called an “open-ended statement that the letter could be amended should new information become available” simply did not pass muster as a formal denial. The insureds owned a home in Seaside Heights that was demolished by the storm on October 29, 2012, and…
Tagged with: New Jersey
Posted in Homeowners Coverage, Hurricane, Loss Adjustment, Suit Limitation, Superstorm Sandy
Posted in Homeowners Coverage, Hurricane, Loss Adjustment, Suit Limitation, Superstorm Sandy
Kansas Court Sanctions Depreciation of Labor to Determine Actual Cash Value
Two of our previous posts reported that Arkansas and Kentucky courts have now barred insurers from depreciating labor—as opposed to materials—when arriving at actual cash value (ACV). Last Wednesday in Graves v. American Family Mut. Ins. Co., 2015 WL 4478468, 2015 U.S. Dist. LEXIS 95127 (D.Kan., Jul. 22, 2015), a federal court in Kansas reached the opposite result in a case of first impression in that state, holding that ACV entails depreciating both materials and labor. A storm damaged the insured’s roof in December 2013, and she made claim under her homeowners policy. The contract of insurance called for payment on an ACV basis unless the damage had been completely repaired or replaced, and it defined ACV as “[t]he amount…
Tagged with: Kansas, Labor
Posted in Actual Cash Value, Depreciation, Homeowners Coverage, Loss Adjustment, Replacement Cost
Posted in Actual Cash Value, Depreciation, Homeowners Coverage, Loss Adjustment, Replacement Cost
California Court: Appraisers Cannot be Directed to Assign Loss Values to Undamaged or Non-Existent Items in the Insured’s Scope
It is axiomatic that the appraisers’ task is solely to determine the amount of loss, as opposed to coverage or liability. In Li-Lin Sung v. California Capital Ins. Co., 2015 WL 3797827, 2015 Cal. App. LEXIS 530 (Jun. 18, 2015), a unanimous panel of California’s Court of Appeal recently held that that necessarily entailed assessing whether components of the policyholder’s claim were actually damaged or even in existence at the time of the loss. According to the opinion, it was error to compel the appraisers to assign loss values to each and every item the insured claimed — such as damage to non-existent windows or to a fourth story on a three-story building — because assessing the existence and nature…
Georgia Court: Policy Does Not Require Insured to Produce Recordings of Her Conversations With the Carrier
On May 20th, a federal court in Georgia held that the standard “requirements in case of loss” language compelling the insured to turn over her books and records during the adjustment process did not require the production of recordings that she had secretly made of her telephone calls with the insurer’s representatives. In Armstead v. Allstate Prop. & Cas. Ins. Co., 2015 WL 2408049, 2015 U.S. Dist. LEXIS 66030 (N.D. Ga., May 20, 2015), the court rejected arguments that the policyholder’s refusal to disgorge the tapes was a violation of the “no action” clause that precluded her breach of contract and bad faith action because it held that the carrier had not shown that they were material to the adjustment…
Tagged with: Georgia, No Action Clause, Requirements in Case of Loss
Posted in Cooperation, Discovery, Examinations Under Oath, Fire, Homeowners Coverage, Investigation, Loss Adjustment
Posted in Cooperation, Discovery, Examinations Under Oath, Fire, Homeowners Coverage, Investigation, Loss Adjustment
A New Twist in the California Debate Over Allegedly Inadequate Replacement Cost Limits in Homeowners’ Policies
The April 8, 2015 decision of the California Court of Appeals in Ass’n. of Cal. Insurance Companies v. Jones, 2015 WL 1569669, 2015 Cal. App. LEXIS 298 (Cal.Ct.App., Apr. 8, 2015) held that the state’s Insurance Commissioner overstepped his authority in attempting to regulate the content and format of replacement cost estimates under homeowners’ insurance policies. Although the legislature may choose to provide such a definition, it has not done so. While the sufficiency of policy limits remains a concern in the insurance industry and there are other valid statutes in effect that address replacement cost, pending a potential appeal of the decision the Regulation at issue, Title 10, Cal. Code of Regulations, §2695.183, is therefore no longer effective. Fire…
Tagged with: California, Estimates, Replacement Value
Posted in Loss Adjustment, Replacement Cost, Unfair Insurance Practices
Posted in Loss Adjustment, Replacement Cost, Unfair Insurance Practices
Florida Court: Your Own Attorney is Simply Not a “Disinterested” Appraiser
As noted yesterday, last month saw an intermediate level appellate panel in Florida address whether the attorney for the policyholder could serve as that party’s appraiser. It was a case of first impression in the Sunshine State. In Florida Ins. Guar. Assn. v. Branco, 2014 WL 4648208, 2014 Fla. App. LEXIS 14602 (Fla.Dist.Ct.App., Sept. 19, 2014), the panel held that it was impermissible to select one’s own lawyer to act in that capacity when the contract of insurance called for a “disinterested” appraiser. The Brancos’ home was damaged by a sinkhole in April of 2010, and they made claim under a homeowner’s policy issued by Homewise Preferred Insurance Company. The insurer denied liability, asserting that what had happened did not…
Tagged with: Disinterested Appraiser, Florida
Posted in Arbitration and Appraisal, Loss Adjustment, Sinkhole
Posted in Arbitration and Appraisal, Loss Adjustment, Sinkhole
