Hunton Insurance Recovery Blog

Last month, I wrote about State Farm's "Dirty Little Secret." After a non-jury trial, Florida's Second Judicial Circuit (Leon County) declared that data submitted by State Farm Florida Insurance Company ("State Farm") to Florida's Office of Insurance Regulation ("OIR"), as required by Fla. Stat. 624.424(10), constituted a "trade secret" under Florida law. The Circuit Court released its written opinion on May 2, 2016.

Andrea DeField’s update, and her original post discuss portions of the proposed Restatement of the Law on Liability Insurance and how they may alter the consequences for breaching the duty to defend. The proposed Restatement contains many other provisions that may prove relevant to future coverage disputes, particularly ones governed by state law that is less developed than in states like New York, California, and Florida.

In an article recently published in Bloomberg/BNA Privacy and Security Law Report, Hunton lawyers Syed Ahmad, Sergio Oehninger and Patrick McDermott discuss a recent decision finding insurance coverage for a cyber-related incident.  In the article, the authors dissect whether information made available on the internet is “published” if there is no evidence that anyone ever accessed the information.  As the authors and the court conclude, coverage is indeed available under the general liability policy at issue, demonstrating that general liability insurance can provide ...

As a follow-up to my post yesterday concerning the New York Court of Appeals' decision in In the Matter of Viking Pump, Inc. and Warren Pumps, LLC, Insurance Appeals, where the New York high court confirmed that policyholders may allocate all amounts of loss to a single policy and a single policy year, Syed Ahmad, a partner in our Insurance Coverage Counseling and Litigation team, was interviewed by Law360 about the decision's broad-ranging implications. As Mr. Ahmad explained in an article appearing today in Law360, titled NY Allocation Ruling Speeds Policyholders' Road To ...

On Tuesday, May 3, 2016, the New York Court of Appeals held that each of several excess liability insurers can be wholly responsible for the entire extent of their policyholders' asbestos liabilities.  The Court further held that "vertical" exhaustion would apply; rejecting the insurers' attempt to apply "horizontal" exhaustion before upper-layer policies must respond.  The decision, in In the Matter of Viking Pump, Inc. and Warren Pumps, LLC, Insurance Appeals, comes in response to two questions certified from the Delaware Supreme Court:

The Eleventh Circuit confirmed in First Mercury Insurance Company v. Excellent Computing Distributors, Inc., No. 15-10120 (11th Cir. Apr. 20, 2016), that policyholders need not await adjudication of underlying liability litigation before obtaining a confirmation of coverage. The decision arose from a declaratory judgment action concerning the availability of insurance coverage for an underlying negligence suit against the policyholder. The district court dismissed the declaratory judgment action, finding it "inappropriate to exercise jurisdiction over an action seeking a declaration of the plaintiff's indemnity obligations absent a determination of the insureds' liability.” The court also noted that "significant factual questions necessary for a resolution of [the] declaratory judgment action are at issue in the state [court] action, and have yet to be resolved.” But the court did not identify the factual questions.

On April 14, 2016, in the case of St. Paul Mercury Ins. Co. v. Am. Bank Holdings, Inc., 15-1559, 2016 WL 1459517, at *1 (4th Cir. Apr. 14, 2016), the Fourth Circuit held that notice to a registered agent started the clock for purposes of calculating timely notice under American Bank's liability policy with St. Paul.  The policyholder, American Bank Holdings, Inc., provided untimely notice after the registered agent forwarded the underlying lawsuit to American Bank's CFO, who was no longer with the business. With no apparent back-up for the CFO, the underlying lawsuit remained untouched until the plaintiff obtained and sought to enforce a $98.5 million default judgment. When American Bank alerted St. Paul, the insurer denied coverage based on untimely notice under the policy's provision that notice be given "as soon as practicable, but in no event later than: (a) sixty (60) days after expiration of the Policy Year in which the Claim was first made." American Bank later spent approximately $1.8 million in attorneys' fees and costs getting the default judgment vacated and the state-court lawsuit dismissed.

Yesterday, a federal court found that FIFA’s D&O insurer is obligated to reimburse and advance legal costs for the defense of Eduardo Li, one of the defendants in the FIFA racketeering and fraud prosecution. Li v. Certain Underwriters at Lloyd’s, London, No. 15-cv-6099 (E.D.N.Y. Apr. 27, 2016). Li was the president of the Costa Rican soccer federation, an executive member of the soccer association for North and Central America (CONCACAF), and a member of FIFA standing committees. Along with other FIFA executives, he was indicted this past summer and charged with racketeering conspiracy, wire fraud conspiracy, and money laundering conspiracy.

Yesterday, a federal court found that FIFA’s D&O insurer is obligated to reimburse and advance legal costs for the defense of Eduardo Li, one of the defendants in the FIFA racketeering and fraud prosecution. Li v. Certain Underwriters at Lloyd’s, London, No. 15-cv-6099 (E.D.N.Y. Apr. 27, 2016). Li was the president of the Costa Rican soccer federation, an executive member of the soccer association for North and Central America (CONCACAF), and a member of FIFA standing committees. Along with other FIFA executives, he was indicted this past summer and charged with racketeering conspiracy, wire fraud conspiracy, and money laundering conspiracy.

The Supreme Court of Georgia recently ruled that the pollution exclusion in a CGL policy applied to a personal injury claim arising from ingestion of lead-based paint, rejecting an earlier court opinion that lead-based paint was “not clearly a ‘pollutant’ as defined in the policy.”  Read more here.