One of the more interesting cases from this last quarter is the California Fourth District case, Navigators Specialty Insurance Company v. Moorefield Construction, Inc., which upheld an insurer’s reimbursement claim against the insured after defending and indemnifying a non-covered claim. This is also a rare case in which construction defects were deemed not an “occurrence” and the appellate court also discussed the supplementary payments provision. We hope you find our brief summaries of all the cases informative. Please take a moment to check out the list of educational seminars our coverage attorneys can present to you or your group, at the end of this Newsletter.

As always, if you or your group have any coverage questions we might answer, please do not hesitate to call!

Mark E. Hellenkamp
Partner, San Diego
619.819.2404
mhellenkamp@mpplaw.com

Potential of Ongoing Damage Triggers Duty to Defend

A California Court of Appeal found that the potential of ongoing damage to wood inside a chimney was sufficient to trigger coverage for a resulting fire that occurred after the liability policy had expired.

To read more, click HERE.

This Construction Defect Was Not an Accident; Insured Required to Reimburse Insurer Settlement Amount Paid, But Not Portion Attributable to Supplementary Payments

California’s Fourth District Court of Appeal held that although an insurer had no duty to defend or indemnify, because the construction defect at issue was not an “occurrence,” supplementary payments were part of the duty to defend and the duty to defend determination was not retroactive; therefore, the insurer was not entitled to reimbursement from the insured for that portion of the settlement attributable to attorney’s fees and costs of suit.

To read more, click HERE.

Post-Verdict Award of Brandt Fees Should Be Included in Punitive-Compensatory Damages Ratio

California’s Third District Court of Appeal upheld, on remand, the trial court’s remittitur of $19 million punitive damages award to $475,000, which included Brandt fees that were not previously considered in fixing the 10:1 ratio.

To read more, click HERE.

Speculation About Extraneous Facts Does Not Trigger Duty to Indemnify

California’s Sixth District Court of Appeal held that a subcontractor’s excess insurer was not liable for a worker’s injuries arising out of a fall because, based on undisputed circumstances, no reasonable inference could be made that the insured subcontractor was at fault.

To read more, click HERE.

No Duty to Pay Judgment Because Insured’s Deliberate Acts Were Not an “Occurrence”

The United States District Court for the Central District of California held that an insurer did not owe a duty to pay a judgment against its insured because the insured’s intentional acts caused the plaintiff’s injuries and therefore did not constitute an “occurrence.”

To read more, click HERE.

Excess Only Provision Negates Coverage

In a matter involving disputes between multiple primary level insurers, a District Court in California found that an excess only provision negated the duty to defend or indemnify.

To read more, click HERE.

Reasonable Settlement Offer Precludes Finding of Bad Faith

The District Court in Nevada found that an insurer did not engage in bad faith conduct when it rejected a UM policy limits demand and made a reasonable offer to settle or mediate the claim.

To read more, click HERE.

Professional Services Exclusion Bars False Claims Act Lawsuit

A District Court in California found that the professional services exclusion precluded coverage for a lawsuit alleging violation of the False Claims Act.

To read more, click HERE.

Duty to Defend in Environmental Contamination Lawsuit Because “Sudden and Accidental” Exception to Chemical Discharge Exclusion Applied

The United States District Court for the Central District of California held that an insurer owed a duty to defend because the possibility existed that its release of a solvent fell within the “sudden and accidental” exception to the “chemical discharge” exclusion, which barred coverage for the release of irritants or contaminants into the environment.

To read more, click HERE.

Excess Policy Which “Follows Form” With Underlying Primary Does Not Incorporate the Limits of Liability of the Primary Policy

A United States District Court in California held that held that an excess policy which “followed form” with a primary policy incorporated the primary policy’s conditions and exclusions, but not the primary policy’s lower limits of liability.

To read more, click HERE.

The presentations below are made by members of the Insurance Practice Group. If you have any interest in holding such presentations for your company, please contact the presenter.

Recent Presentations

On January 31, 2017, Pamela Palmer moderated a panel at the American Conference Institute's 6th Annual Forum on Admiralty and Maritime Claims and Litigation titled "P&I Club and Insurance Roundtable: Issues of Concern for the In-House Counsel Going Forward; Cybersecurity in Shipping; Impact of Consolidation and Interest in Diversification; The Latest Developments in Claims; New Coverage Nuances and Ensuring Necessary Coverages Are in Place; and Suggestions as to How Outside Counsel Can Get on a Pre-Approved Panel."

Upcoming Presentations

On February 9, 2017, Doug Wood will present a National Webinar on Arson / Fraud Claims titled "Investigating Potentially Fraudulent Claims" for the Property Liability Research Bureau (PLRB).

On March 7, 2017, Doug Wood will present “Anatomy of an Arson - Sex, Drugs and Rock & Roll” with Juliet Schade of CIG and Ulises Castellon of Fire Cause Analysis for the Combined Claim Conference (CCC).

On March 26-29, 2017, Doug Wood will present “The Seven Deadly Sins of SIU Adjuster Testimony” to the at the Property Liability Reseach Bureau (PLRB) National Conference.

On April 12-14, 2017, Doug Wood will present "Navigating the SIU Minefield" at the Anti-Fraud Alliance / Northern California Fraud Investigators Association's 28th Annual Anti-Fraud Conference.

On April 27, 2017, Pam Palmer will moderate a panel titled "Discovery and the Extra-Contractual Suit" at the ABA Tort Trial and Insurance Practice Section Conference in Chicago.

In addition, Doug Wood is working on the 2017 updates to 5 Chapters in the CEB treatise “Property Insurance: Law & Litigation”, specifically, “Chapter 3, "Insurable Interest", Chapter 4, "Insuring Secured Lenders and Lienholders", Chapter 7, "Business Interruption and Other Business Coverages", Chapter 8, "Causation and Common Exclusions", and Chapter 12, "Calculating Liability: Measure of Indemnity".

The presentations below are made by members of the Insurance Practice Group. If you have any interest in holding such presentations for your company, please contact the presenter.

Newsletter Contributors

Mark E. Hellenkamp
Micah M. Hoffman
John S. Na
David M. Plouff
Douglas K. Wood

For more information on the Insurance Coverage Practice Group, please visit our website.

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Disclaimer: This email is designed to provide information in regard to the subject matter and is made available with the understanding that the email does not constitute the rendering of legal advice or other professional services. If legal advice is required, such services should be sought. All rights reserved.

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