CM Report of Recent Decisions (2009v3)
2009 Volume 3
A summary of significant recent developments in the law focusing on substantive issues of litigation and featuring analysis and commentary on special points of interest.
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Articles in this report
S&K Motors v. Harco National Insurance Leaves Commercial Crime Insurer at a Loss
In S & K Motors v. Harco Nat'l, 213 P.3d 630 (Wash. App. 2009), the Washington Court of Appeals examined the whether an insured's excluded losses from a series of employee thefts could be considered when assessing whether the insured had been "fully compensated." The court determined they could, and reaffirmed the broad scope of the made-whole doctrine in Washington.
Consent to Assignment Condition in Policies Upheld
In a recent victory after a many year battle over whether coverage is owed to a successor or assignee, the trial court granted the insurer's Motion for Judgment on the Pleadings, finding that by operation of law, there was no valid assignment that could trump the policies' consent to assignment condition.
In Wasa Int'l Ins. Co. Ltd. v Lexington Ins. Co. [2009] All ER (D) 328 (Jul), the House of Lords had to decide the extent to which the facultative reinsurance should be construed under English law as being "back to back" with the underlying insurance policy.
Indiana Court Of Appeals Allows Recovery Of Replacement Cost Without Replacement
The Indiana Court of Appeals, in a case of first impression, has ruled that the insurer's claims handling conduct can excuse compliance with the policy's requirement to repair before recovery of replacement cost. Rockford Mutual Ins. Co. v. Pirtle, 911 N.E. 2d 60 (Ind. App. 2009).
The Illinois Appellate Court, First District holds that a declaratory judgment finding that a purported additional insured was not covered by a liability policy precludes the named insured from relitigating the coverage issue in a subsequent lawsuit for breach of contract to procure insurance. State Farm Fire & Cas. Co. v. John J. Rickhoff Sheet Metal Co., 2009 WL 2581700 (Ill. App. 1st Dist.).
In Twenhafel v. State Auto Property and Casualty Ins. Co., 2009 WL 2914281 (7th Cir.), the Seventh Circuit examined a policy provision excluding coverage for property left "in the open," and held that the exclusion may only be invoked when property is left exposed to the elements or unprotected from the elements, and not when outdoors but covered by a tarp.
Texas Supreme Court Explains Scope of Appraisal As Matter Of First Impression
In State Farm Lloyds v. Johnson, 2009 Tex. LEXIS 470 (Tex. 2009), the Texas Supreme Court affirmed an appellate court order compelling the insurer to participate in the appraisal process.
Third Party Bad Faith Liability Not Expanded By Recent California Court Rulings
A brief survey of three recent third party coverage cases decided by courts in California indicate that the state judiciary has no inclination to expand the bad faith liability of insurers, or at least that it has yet to find the proper vehicle for such an expansion. In the event that an insurer is held liable, it may be able to establish a valid claim against an independent adjuster in the right factual circumstances.
