Hunton Insurance Recovery Blog

The Georgia Court of Appeals held on November 20, 2015, that compliance with an excess liability policy’s notice provision is not a precedent to coverage. Plantation Pipe Line Co. v. Stonewall Insurance Co., No. A15A1359 (Nov. 20, 2015 Ga. App., 3rd Div.). In Plantation Pipeline, the insured sought coverage for ground contamination originating from a 1976 pipeline leak. The leak was fixed and remediated shortly after it was discovered. In 2009, Plantation discovered further contamination at the site, which it again remediated. Plantation sought coverage for the remediation. Stonewall denied coverage based on the policy’s notice provision, contending that notice of the leak and remediation was untimely. The parties cross-moved for summary and the trial court granted Stonewall’s motion. On appeal, the Georgia Court of Appeals affirmed, finding that Plantation’s notice was not timely as it did not report the claim to Stonewall for more than two years. However, the majority agreed with Plantation that the notice provision does not “expressly stipulate that compliance with the notice provision is a condition precedent to coverage.” The panel further found that “the policy does not even contain a general provision that no action will lie against Stonewall unless, as a condition precedent thereto, Plantation shall have fully complied with all terms of the policy.” Thus, the panel found it was error for the trial court to preclude coverage based on a failure to provide timely notice.

A federal court in Virginia recently held in Travelers Casualty and Surety Company v. Schur, No. 3:15CV60-HEH (E.D.Va., Nov. 24, 2015), that a liability insurer’s so-called “business pursuits” and “known falsity” exclusions do not preclude a defense against defamation allegations where the allegations raised at least a potential for coverage under the policy.  The decision illustrates the continued application of Virginia’s “eight corners” and “potentiality” rules, which mandate a narrow application of the underlying allegations against the language of the policy and require a defense if any allegation raises even a potentiality for coverage.

The Supreme Court of Texas has ruled that CERCLA enforcement proceedings brought by the EPA are a “suit” as that term is used in commercial general liability insurance policies.  In doing so, Texas joins the majority of other jurisdictions to consider the issue. McGinnes Industrial Maintenance Corp. v. The Phoenix Insurance Co., No. 14-0465 (Tex. June 26, 2015).

The Tenth Circuit Court of Appeals recently held in KF 103-CV v. American Family Mut. Ins. Co., No. 14-1403 (10th Cir. Oct. 29, 2015), that a general liability insurer owed a defense to a real estate developer who allegedly trespassed on nearby easements, causing a loss of use of those easements and a diminution in value to the dominant property.  The decision illustrates the expansive defense coverage owed under ordinary general liability insurance, with coverage extending to claims alleging only a loss of use or property value.

Background 

Judges – Not Juries – Award Attorney’s Fees In Virginia Bad Faith Cases, FC&S Legal
November 10, 2015

In REVI, LLC v. Chicago Title Insurance Company, the Virginia Supreme Court held that a trial judge, rather than a jury, should determine whether an insured is entitled to attorney’s fees as a result of the insurer’s bad faith.

Insurers To Indemnify $132 Million Loss From Train Collision Allegedly Caused By Texting Engineer, FC&S Legal
November 9, 2015

In Those Certain Underwriters at Lloyd’s London et al. v. Connex Railroad LLC, a Los Angeles trial court found that an insurer must indemnify its insured railroad for $132 million in claims arising out of a commuter train collision caused by alleged texting by engineer.  In finding for the insured, the court rejected application of the policies' "intentional acts" exclusion, holding that the exclusion only applies where the insured would have known that ...

Maryland’s Court of Special Appeals recently ruled in James G. Davis Construction Corporation v. Erie Insurance Exchange¹ that a subcontractor’s insurer was obligated to defend the general contractor against allegations that it was negligent in its supervision of the subcontractor. In doing so, the court reversed the trial court’s ruling that the general contractor was covered only for claims of vicarious liability for the subcontractor’s actions.

Lessons from 'Deflategate': Drafting the right arbitrator picks, InsideCounsel
October 27, 2015

Article discussing the insurance implications from the NFL’s so-called “Deflategate” scandal, involving the alleged deflation of footballs used in the 2014 AFC Championship Game.  The scandal resulted in a four-game suspension of four-time Super Bowl Champion Tom Brady.  When Brady—through the NFL Players Association—appealed the four-game suspension as part of the NFL’s arbitration process, Commissioner Roger Goodell unilaterally appointed himself as ...

In a decision of import to businesses facing intellectual property infringement lawsuits, the Southern District of Florida has ruled that a commercial general liability policy’s “knowing violation” and “infringement” exclusions do not apply to lawsuits involving allegations of intent and knowledge in the context of advertising injury. E.S.Y., Inc., et al. v. Scottsdale Insurance Company, No. 15-21349 (S.D. Fla. October 14, 2015) (“E.S.Y.”).

Tapping Corporate Predecessors’ Liability Insurance Policies Just Became Easier Following Fluor Ruling, Westlaw Journal Insurance Coverage, volume 26, issue 2
October 15, 2015

In a landmark decision, the California Supreme Court on August 20, 2015, held that enforcing an anti-assignment clause in an insurance policy as a bar to coverage – where the assignment occurred post-loss – was contrary to California Insurance Code Section 520, which provides that consent-to-assignment clauses are invalid if invoked after a loss has happened.  See Fluor Corp. v. Superior Court ...