CASES OF CONSEQUENCE

FLORIDA Estoppel

A Florida appellate court has ruled that a trial court erred in granting summary judgment to a homeowner’s insurer based upon a jury’s finding that she had acted intentionally in interfering with a third party’s agreements with a local Waste District. In Hurchalla v. Homeowners Choice Property & Cas. Co., No. 4D18-2740 (Fla. App. Oct. 16, 2019), the Fourth District Court of Appeal ruled that the insurer’s summary judgment papers had not refuted the insured’s affirmative defenses and that, in fact, the insurer might be estopped to raise the issue of intentional acts having provided a defense without issuing the reservation of rights letter required by Section 627.426(2). The court declared that an insurance company may be estopped from denying coverage, even where the policy does not cover the claim, where the insured has been prejudiced by the insurer’s assumption of the insured’s defense.

ILLINOIS Motor Vehicle/”Use”

The Appellate Court has ruled that a trial court erred in failing to find that the auto insurer of a livery company owed coverage for injuries that a passenger suffered when a limo driver caused a legally blind passenger to walk into a concrete pillar in the course of walking him from the car to a hospital entrance. In First Chicago Ins. Co. v. My Personal Taxi and Livery, Inc., 2019 IL App (1st) 190164 (Ill. App. Oct. 11, 2019), the First District ruled that the injuries arose out of the “use” of the insured vehicle despite First Chicago’s argument that the “use” ended when the driver arrived at the hospital. The court took note of the fact that the policy did not contain an exclusion for bodily injuries resulting from the “loading or unloading” of vehicles, even though a similar exclusion existed for property. Further, the court found that assisting a disabled passenger was a logical extension of the livery company’s transport services.

NORTH CAROLINA First Party/”Collapse"

A federal district court has ruled that a commercial property policy covered the collapse of an apartment building’s breezeway on which over a hundred students were dancing at the time. In DENC, Inc. v. Philadelphia Ind. Ins. Co., No. 18-754 (W.D.N.C. Oct. 15, 2019), Judge Eagles found that coverage for this loss was reinstated by language in a Collapse endorsement stating that otherwise applicable collapse exclusions did not apply to losses caused by the “weight of people.” In any event, the court found that the loss involved a covered “collapse” as having occurred abruptly and rendering the building uninhabitable.

PENNSYLVANIA Criminal Acts Exclusion

In an unpublished opinion, Pennsylvania’s intermediate appellate court has ruled that a liability insurer was not obliged to defend or indemnify a police officer who collided with an innocent motorist in the course of a high speed car chase. In Pennsylvania Integrated Risk Management Assoc. v. Homanko, J-A22023-19 (Pa. Super. Oct. 15, 2019), the Superior Court agreed with the trial judge that a criminal acts exclusion applied even though it required a judicial determination of liability as a prerequisite to its applicability and even though the motorist had also pleaded claims of negligence.

TENNESSEE Declaratory Relief/Necessary Parties

The Tennessee Supreme Court has ruled in Tennessee Farmers Mut. Ins. Co. v. DeBruce, No. E2017-02078-SC-R11-CV (Tenn. Oct. 15, 2019) that an intermediate appellate court erred in setting aside a default judgment and allowing an accident victim to intervene to pursue claims for coverage. Whereas the Court of Appeals had ruled that the default judgment was not binding on the accident victim, inasmuch as she was a “necessary party” to the coverage litigation but had not been named as a defendant when the insurer brought this declaratory judgment action, the Supreme Court ruled that only the insured was a necessary party. The court declared that “The claimant, who had no judgment against the insured and could not bring a direct action against the insurance company to collect any damages caused by the insured, had no interest affected by the dispute between the company and its insured.”

OTHER DEVELOPMENTS OF NOTE

Inside the Insurance Industry

S&P Global Ratings have revised its financial strength assessment of Argo Group US, Inc. from “positive” to “stable” in the wake of report of an SEC investigation of compensation and governance issues.

AM Best reports that it will not change its rating of James River Insurance in the wake of its cancellation of underwriting arrangements with ridesharing giant Uber.

Cyber Claims Update

The City of Baltimore, which was paralyzed for weeks last May by a RobbinHood ransomware attack, has reportedly purchased two $10 million cyber-insurance policies from Chubb and Axa XL.

New Coverage Litigation

Evanston Insurance has filed suit in federal court in Florida seeking a declaration exclusions for employee injuries and sexual assaults precludes any duty to cover claims arising out of injuries to an employee of its insured who was hit on the head in the course of attempted robbery.

The Louisiana Agricultural Group Self-Insurance Fund filed suit in federal court in Ohio last week seeking reimbursement from drug manufacturers for losses that its members have suffered as the result of the opioid crisis.