Court Finds No Coverage for Loss Caused by Water Back Up Through a Storm Drain

Posted on March 4, 2024 by Tiffany Bustamante

In Carrico v. Stillwater Ins. Co., 23-CV-349-RAJ, 2024 WL 308106 (W.D. Wash. Jan. 26, 2024), the Western District of Washington considered competing motions for partial summary judgment in a property damage case involving a winter storm, where large amounts of rain and melted snow backed the drain up and the force of the water pushed through the exterior door causing damage to the entire basement level. At issue in the case was the application of the policy’s wear and tear exclusion and its exceptions.

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Tagged with: Plumbing System Coverage, Storm Drain Damage, Water Back Up Coverage, Water Damage Coverage, Water Overflow Coverage, Wear And Tear Exclusion
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Court Finds Policy Term, “Windstorm,” to be Ambiguous in Coverage Dispute Involving Tornado

Posted on February 14, 2024 by Paul Ferland, Joshua Tumen

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.

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Tagged with: Deductible, property damage, tornado, windstorm
Posted in Uncategorized

Court Issues First LEG3 Defects Exclusion Decision

Posted on January 16, 2024 by Joshua Tumen, Paul Ferland

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 policies internationally, there has been a clear lack of judicial guidance relative to LEG3.

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Tagged with: builder’s risk, construction defects, insurance coverage, LEG exclusions
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There’s No Place Like Home! Kansas Federal Court Holds Homeowner’s Policy Coverage Requires Policyholder to Physically Reside at Residence

Posted on November 9, 2023 by Vincent Passarelli

A federal court recently held that an insurer may deny coverage under a homeowner’s policy for a “residence premises” when the insured never actually lived at the premises. In Sina Davani v. Travelers Personal Insurance Company and Geico Insurance Agency, LLC, Case No. 22-1244 (D. Kan. October 26, 2023), the District of Kansas granted defendant-insurer’s motion for summary judgment holding that the plaintiff-insured never resided at the insured premises and residence in the context of an insurance contract requires an insured’s physical presence at a certain location and an intent to remain at the location for an indefinite period of time.

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Tagged with: Coverage, Homeowner’s Insurance, Primary Residence, property damage, property insurance
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Southern District of Texas Holds that Appraisal Award is Inconclusive of Whether a Loss is Covered

Posted on August 29, 2023 by Joshua Tumen

The Southern District of Texas recently held that an appraisal award did not establish liability for a covered loss under the policy. In Hoff v. Meridian Sec. Ins. Co., 2023 WL 5192013 (S.D. Tex. Aug. 11, 2023), Meridian Security Insurance (“Meridian”) insured Flemming Hoff (“Hoff”). After filing suit, Hoff requested an appraisal pursuant to the following policy language:

If you [Hoff] and we [Meridian] disagree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the “residence premises” is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.

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Tagged with: appraisal, claim investigation, claims handling, Coverage, damages, estimate, property damage, Texas
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Florida Enacts Broad Insurance Reforms Focusing on Bad Faith

Posted on March 29, 2023 by Chad A. Pasternack, John David Dickenson

From 2019 to 2022, the Florida Legislature enacted four separate property insurance reforms that sought to rein in abusive property insurance litigation fueled by one-way attorney’s fee shifting and an army of professional plaintiffs filing lawsuits pursuant to assignments of benefits. In its latest reform, the Legislature has shifted its focus to the broader insurance market and to tort reform. For many years now, Florida has significantly led the nation in tort costs per household. This metric has been driven by a high octane litigation environment, ever growing personal injury verdicts, and a gradually sharpened focus on setting up insurers for bad faith claims.

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Tagged with: 86.121, Bad Faith, Florida, hb 837, safe harbor
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Louisiana Supreme Court Reverses a Rare State Court of Appeals Win for COVID-19 Business Interruption Claimant

Posted on March 27, 2023 by Karl A. Schulz

COVID-19 business interruption claimants have had few state appellate court decisions upon which to rely. Louisiana produced one such decision in Cajun Conti, LLC v. Certain Underwriters at Lloyd’s, 2022 La. App. LEXIS 939 (La. App. 4 Cir., June 15, 2022). The insurer prevailed in the trial court in a dispute over whether coronavirus constituted “direct physical loss of or damage to” insured property. The insured restaurant appealed. Louisiana’s Fourth Circuit Court of Appeal reversed the trial court. The Court of Appeal’s opinion became widely-cited by other COVID-19 business interruption claimants. The insurer appealed to the Louisiana Supreme Court and Cajun Conti became a widely-followed dispute. As discussed below, the Court of Appeal’s analysis was out of step with the analysis undertaken by courts across the country.

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Tagged with: Coverage, covid, interruption, loss, Louisiana, Texas, use
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Florida Appellate Court Holds that Deadline to Report Claims Does Not Nullify Prompt Notice Provision

Posted on February 03, 2023 by Chad A. Pasternack, Evan Holober

Florida’s Third District Court of Appeal recently affirmed a summary judgment entered in favor of a property insurer, holding that there is no conflict between the policy’s three year limitation for reporting hurricane claims and the requirement that the insured give prompt notice. In Navarro v. Citizens Property Insurance Corporation, No. 3D22-0032, 2023 WL 219032, — So.3d —- (Fla. 3d DCA Jan. 18, 2023), the insured sought coverage for Hurricane Irma damage nearly three years after the storm. The court found that the policy unambiguously required prompt notice, and that the insured failed to rebut the presumption of prejudice against the insurer.

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Posted in Hurricane, Notice

Florida Begins New Era with Major Property Insurance Reforms

Posted on December 16, 2022 by John David Dickenson, Chad A. Pasternack

For the fourth time since 2019, the Florida Legislature has enacted property insurance reforms aimed towards stabilizing a beleaguered insurance market. The bill, S.B. 2-A, creates a reinsurance assistance program, establishes additional oversight for insurers with high volumes of hurricane claims, and reforms many aspects of the claims process, including the timing for paying and adjusting claims. The reforms further eliminate one-way attorney fee awards to policyholders and ban assignment-of-benefits agreements. In this article, we will focus on the changes to the claim adjustment process and coverage and bad faith litigation.

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Tagged with: 624.1551, 626.9373, 626.9541, 627.428, 627.70131, 627.70132, adjustment, attorney's fees, Bad Faith, Florida, H.B. 1-A, notice, property insurance, reform, S.B. 2-A
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Texas Court of Appeals Nixes Plaintiff’s Attorney’s Fees Award Because Offsets Preclude Prevailing Party Status

Posted on December 9, 2022 by Karl A. Schulz

The First Court of Appeals in Houston affirmed an analysis that involved math and application of the Texas Insurance Code. In Jones v. Allstate Vehicle & Property Insurance Company, 2022 Tex. App. LEXIS 8896 (Tex. App.—Houston [1st Dist.] Dec. 6, 2022, no pet.), the policyholder appealed a take-nothing judgment in favor of the insurer in a dispute over a partial denial of a homeowners claim. The policyholder sued her insurer for breach of contract, violation of the Texas Insurance Code, and breach of the duty of good faith and fair dealing. At trial, the jury found that the insurer failed to comply with the policy, engaged in unfair and deceptive trade practices, and failed to comply with the duty of good faith and fair dealing. The jury found that $6,935 would fairly and reasonably compensate the policyholder for the insurer’s conduct. The jury also found that the policyholder incurred $27,000 in reasonable and necessary attorney’s fees.

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Tagged with: attorney, faith, fees, prevailing
Posted in Uncategorized