CM Report of Recent Decisions (2004v3)
2004 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
The Indiana Court of Appeals has ruled that an agreement to add an additional insured to a commercial general liability policy must be in writing and in effect at the time of the loss in order to provide coverage. Liberty Ins. Corp. v. Ferguson Steel Co., Inc., 812 N.E.2d 228 (Ind. App. 2004).
Appellate Court Reaffirms Innocent Co-Insured Rule in Illinois
In Wasik v. Allstate Ins. Co., 813 N.E.2d 1152 (Ill. App. 2004), the Illinois Appellate Court reaffirmed the rule that innocent co-insureds recover even when other insureds intentionally burn down the property.
Federal Regulation of Cell Towers Emits Waves of Litigation
In recent years, there has been an exponential increase in litigation over the siting of cell towers. As the demand for wireless communication increases, local municipalities are faced with difficult decisions on whether to allow a new tower to be erected. Residents often object to the construction of new towers based on aesthetic or environmental reasons. While some of these objections may be valid, they may also reflect a “NIMBY” (“Not In My Backyard”) attitude that places municipal officials in a tenuous position. When approving a new tower site, local officials often risk a classic catch-22: approve the tower site and alienate the residents who elected them, or deny a permit for the tower site and risk protracted and expensive litigation.
Furnishing Copy of a Surveillance Tape is Sufficient Disclosure
In Zegarelli v. Hughes, 3 N.Y.3d 64 (2004), the New York Court of Appeals - New York’s highest court - holds that furnishing a mere copy of a surveillance tape is sufficient disclosure under New York law.
The Illinois Appellate Court, First District, holds that § 155 of the Illinois Insurance Code preempts a cause of action brought under the Illinois’ Consumer Fraud and Deceptive Business Practices Act (“Consumer Fraud Act”). Young v. Allstate Ins. Co., 812 N.E.2d 741 (Ill. App. 2004).
Illinois Appellate Court Upholds Exculpatory Agreement in Raceway Accident
The Illinois Appellate Court, Fifth District, upholds application of a broad exculpatory agreement to negate plaintiff’s negligence claims in Platt v. Gateway Int’l Motorsports Corp., 813 N.E.2d 279 (Ill. App. 2004).
In Barragan v. Osman Construction Co., 2004 WL 1886464, the Illinois Appellate Court handed down an important opinion regarding the interplay between §§13-204 and 13-207 of the Illinois Code of Civil Procedure. Section 13-207 provides that a defendant may plead a counterclaim that is otherwise barred by the applicable statute of limitations. Section 13-204 provides, in pertinent part, that no action for contribution or indemnity may be filed more than two years after the party seeking contribution or indemnity has been served with process in the underlying action. In a split decision, the appellate court majority determined that the filing of a counterclaim for contribution or indemnity is governed by §13-204 and is thus time-barred if not filed within two years regardless of its technical status as a counterclaim.
Insurer Beware: Payment of Defense Costs May Be Required Pending the Stay of Claims for Rescission and Determination of Exclusions
A Director & Officer liability insurance policy (“D&O policy”) provides coverage for any loss that a director or officer becomes legally obligated to pay, including payment of defense costs. A D&O policy often includes indemnity coverage for the corporation, for those sums paid for the benefit of the directors and officers, as well as coverage for securities fraud claims. When a corporation files for bankruptcy, many issues arise regarding the D&O policy and whether or not the D&O policy itself or the proceeds of that policy are property of the estate. This article discusses the obligations of an insurer to advance defense costs and the recent ruling relating to the directors and officers of Adelphia Communications Corporation (“Adelphia”) in Associated Electric & Gas Insur. Services, Ltd. v. Rigas, 2004 U.S. Dist. LEXIS 4498 (E.D. Pa. 2004)(“Adelphia”).
Insurer May Be Liable for Bad Faith in Connection With its Subrogation Investigation -- Despite Paying Policy Limits to Insured
Plaintiff’s allegations that its property insurer misrepresented that it was pursuing a subrogation investigation against the manufacturer of a clothes dryer believed to be the cause of a fire in the insured’s home, when in fact the insurer had stopped its investigation ten days after the fire, presented a triable issue of fact regarding the insurer’s liability for tortious bad faith, the New Hampshire Supreme Court recently held.
Is the Leaning Tower of Pisa a Covered Collapse Loss?
The Ninth Circuit found coverage for “collapse” in a property policy for a building in a state of imminent, but not actual, collapse. Assurance Co. v. Wall and Associates, L.L.C., 379 F.3d 557 (9th Cir. 2004). As a result, it reversed the federal court for the Western District of Washington which had awarded summary judgment to the insurer on the basis no collapse occurred.
Liability Insurer Recovers Defense Costs Paid for Uncovered Claims
In General Agents Ins. Co. of Am., Inc. v. Midwest Sporting Goods, 812 N.E.2d 620 (Ill. App. 2004), a case of first impression and a split decision, a majority of the Illinois Appellate Court ordered an insured (Midwest) to reimburse its liability insurer (Gainsco) for costs paid to defend Midwest for claims not covered by Gainsco’s policy. The majority’s holding is expressly based upon the circumstances presented, where Midwest accepted defense payments knowing Gainsco intended to seek recovery of such costs if the underlying claims were ultimately found to fall outside of coverage.
Motions In Limine: An Effective Tool to Combat Excessive Verdicts
The Clausen Miller Appellate Practice Group, which is often retained at the conclusion of a trial gone bad, can usually identify the reason for the excessive award. Often the cause is misconduct of the plaintiff’s attorney and that can provide a viable basis for appeal. Indeed the misconduct is sometimes so egregious that it constitutes plain error; that is, it is a point which can be argued on appeal even where trial counsel has failed to preserve the point with proper objection.
New York Taxi-Cab Law Does Not Obviate Insurer's Right To Receive Notice Of Suit
New York’s Court of Appeals has held that New York Vehicle and Traffic Law §370 does not obviate the right of a taxi-cab’s liability insurer to receive notice of a suit against the cab’s owner and driver. American Transit Ins. Co. v. Sartor, 2004 WL 1472632.
Two-Year Suit Limitation Provision Does Not Violate Public Policy
In Parish v. Country Mutual Ins. Co., 814 N.E.2d 166 (Ill. App. 2004), the Illinois Appellate Court holds that an insurance policy’s two-year suit limitation provision does not violate public policy.
