Nevada Provides Independant Counsel When Conflict Arises Between Insurer and Insured
December 02, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe Nevada Supreme Court, responding to certified questions, determined that an insurer must provide independent counsel for its insured when a conflict of interest arises between the insurer and insured. State Farm Mut. Auto. Ins. Co. v. Hansen, 2015 Nev. LEXIS 86 (Nev. Sept. 24, 2015).
The insured struck the vehicle of another driver, Hansen. Hansen sued the insured alleging both negligence and various intentional torts. State Farm agreed to defend under a reservation of rights. The reservation of rights letter reserved the right to deny coverage for liabiltiy resulting from intentional acts and punitive damages.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
CGL Policy May Not Cover Cybersecurity and Data-Related Losses
March 25, 2024 —
Susana Arce - Saxe Doernberger & Vita, P.C.The construction industry, like many other industries, has experienced an increased reliance on, and implementation of, technology in the past few years. Smart phones and tablets are used on most project sites, computers are an integral part of the planning process, and various software programs are used throughout the construction process. Likewise, much of the machinery and equipment used during construction (e.g., total stations, trucks, tower cranes) is interconnected, and in some cases, operated or monitored remotely.1
With an increase in technology comes a risk of cybersecurity and data-related losses. Many large businesses purchase Commercial General Liability (“CGL”) insurance and assume cybersecurity and data-related losses are covered. Unfortunately, this is generally not the case. CGL policies typically cover three general types of damage: bodily injury, property damage, and advertising injury.
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Susana Arce, Saxe Doernberger & Vita, P.C.Ms. Arce may be contacted at
SArce@sdvlaw.com
NY Pay-to-Play Charges Dropped Against LPCiminelli Executive As Another Pleads Guilty
June 06, 2018 —
Mary B. Powers & Debra K. Rubin - Engineerings News-RecordThe former president of New York contractor LPCiminelli—the firm that has been at the center of an alleged pay-to-play scheme playing out since 2016 when he and two other executives were indicted—got a reprieve as federal prosecutors said they were dropping all charges against him, including wire fraud, conspiracy to commit wire fraud and making false statements to federal agents, according to a June 1 court filing.
Reprinted courtesy of
Mary B. Powers, ENR and
Debra K. Rubin, ENR
Ms. Rubin may be contacted at rubind@enr.com
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Business Interruption, Food Spoilage Claims Resulting from Off Premise Power Failure Denied
June 02, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe insurer denied the insured restaurant's claim for food spoilage and loss of business income when a flood elsewhere caused a power outage. N. Spy Food Co., LLC v. Tower Nat'l. Ins., 2016 N.Y. Misc. LEXIS 1033 (N.Y. Sup. Ct. March 22, 2016).
Tower denied the claim based on an investigation which revealed that the claims resulted from an off premises power failure. The utility company verified that the cause of the power failure was due to flood, a cause excluded under the policy. The food loss and business interruption, therefore, did not result from direct physical loss or damage by a covered cause, justifying the denial of the claim.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Georgia Court of Appeals Holds That Insurer Must Defend Oil Company Against Entire Lawsuit
October 07, 2019 —
Lawrence J. Bracken II, Michael S. Levine & Alexander D. Russo - Hunton Andrews KurthThe Georgia Court of Appeals recently affirmed a grant of summary judgment in favor of Mountain Express Oil Company on its breach of contract claim against liability insurer, Southern Trust Insurance Company. Empire Petroleum brought claims against Mountain Express for breach of contract, injunctive relief, and libel or slander, among others. Mountain Express sought a defense to that lawsuit under its insurance policy with Southern Trust. Southern Trust contended that the insurance policy did not cover Empire’s non-libel/slander claims, and therefore reimbursed Mountain Express for only a portion of its attorneys’ fees. After the Empire lawsuit settled, Mountain Express sued Southern Trust for breach of contract and bad faith for failing to pay the remaining defense costs, contending that Southern Trust had a duty to defend the entire lawsuit.
The Georgia Court of Appeals affirmed the trial court’s grant of summary judgment to Mountain Express on its breach of contract claim. Citing policy language stating that “[the insurer] will have the right and duty to defend the insured against any ‘suit’ seeking those damages,” the court held that Southern Trust was obligated to defend the entire lawsuit. Specifically, in reaching that conclusion, the court noted that by agreeing to defend any “suit,” not any “claim,” Southern Trust obligated itself to defend the entire lawsuit if any claim could be covered under the policy. Accordingly, Southern Trust breached the policy when it only agreed to defend some of the claims against its insured.
Reprinted courtesy of
Lawrence J. Bracken II, Hunton Andrews Kurth,
Michael S. Levine, Hunton Andrews Kurth and Alexander D. Russo, Hunton Andrews Kurth
Mr. Bracken may be contacted at lbracken@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com
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Register and Watch Partner John Toohey Present on the CLM Webinar Series!
October 11, 2021 —
Dolores Montoya - Bremer Whyte Brown & O'Meara LLPBremer Whyte Brown & O’Meara is proud to announce that Partner John Toohey was invited to speak on a panel for the CLM Webinar Series alongside Attorney Rembold Hirschman, and Senior Claims Examiner Brett Reuter. John and his industry peers recently presented on the topic Handling Construction Defect Cases in Arbitration: The Good and the Bad.
About the webinar: Unfortunately, many construction projects end in dispute and the parties frequently find themselves in the middle of uncharted territory – arbitration! Subscribe and watch as they explore the pitfalls, debunk the myths, and discuss the benefits of arbitration in construction disputes.
About John Toohey: John H. Toohey is a Partner for Bremer Whyte Brown & O’Meara, LLP. Mr. Toohey is an A.V. Preeminent rated attorney with a practice focused on contract negotiation and litigation, complex product liability, and construction. He has successfully represented hundreds of clients in alternative dispute resolution and trial, including multiple cases to jury verdict.
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Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
Prospective Additional Insureds May Be Obligated to Arbitrate Coverage Disputes
September 07, 2020 —
Danielle S. Ward - Balestreri Potocki & HolmesThe Court of Appeal closed out 2019 by ruling that an additional insured can be bound to the arbitration clause in a policy when a coverage dispute arises between that additional insured and the carrier. (Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc. (2019) 44 Cal. App. 5th 834, 837.)
In 2009, Future Farmers of America (“Future Farmers”) entered into a license agreement with SMG Holdings Incorporated (“SMG”) to use the Fresno Convention Center. As part of the agreement, Future Farmers was required to secure comprehensive general liability (“CGL”) coverage and name SMG and the City of Fresno as additional insureds (“AI”) on its policies.
Future Farmers purchased a general liability policy from Plaintiff Philadelphia Indemnity Insurance Company (“Philadelphia”). Neither SMG nor the City of Fresno were added as AIs, but the policy contained a “deluxe endorsement” which extended coverage to lessors of premises for “liability arising out of the ownership, maintenance or use of that part of the premises leased or rented” to the named insured. The policy also contained an endorsement that extended coverage where required by a written contract for liability due to the negligence of the named insured. Philadelphia’s policy also stated that if the insurance company and insured “do not agree whether coverage is provided . . . for a claim made against the insured, then either party may make a written demand for arbitration.”
A patron to Future Farmer’s event at the Fresno Convention Center was seriously injured after he tripped over a pothole in the parking lot and hit his head. He sued both Fresno and SMG. In turn, Fresno and SMG tendered their defense to Philadelphia. Philadelphia denied coverage finding that the incident did not arise out of Future Farmer’s negligence, and that SMG had the sole responsibility for maintaining the parking lot. Consequently, Philadelphia concluded that neither Fresno nor SMG qualified “as an additional insured under the policy” for the injury in the parking lot.
The coverage dispute continued, and in 2016, Philadelphia issued a demand for arbitration which was rejected by SMG. Philadelphia then petitioned the state court to compel arbitration arguing that SMG could not avoid the burdens of the policy while seeking to obtain policy benefits. SMG used Philadelphia’s conclusion that it did not qualify as an AI under the policy to argue that Philadelphia was “estopped from demanding arbitration”. In other words, SMG argued that it could not be held to the burdens of the policy without being provided with the benefits of the policy.
The trial court sided with SMG finding that there was no arbitration agreement between the parties. The court noted that while third party beneficiaries can be compelled to arbitration there was no evidence that applied here, and Philadelphia could not maintain its inconsistent positions on the policy as its respects SMG.
Disagreeing with the trial court, the Court of Appeal concluded that SMG was a third-party beneficiary of the policy. The AI obligations in the license agreement and the deluxe endorsement in the Philadelphia policy collectively establish an intended beneficiary status. The Court saw SMG’s tender to Philadelphia as an acknowledgement of that status.
Relatedly, the Court found that SMG’s tender to Philadelphia – its demand for policy benefits – equitably estopped them from avoiding the burdens of the policy. The Court stated it defied logic to require a named insured to arbitrate coverage disputes but free an unnamed insured demanding policy coverage from the same requirement. Conversely, the Court found no inconsistency in Philadelphia’s denial of coverage to SMG and its subsequent demand for arbitration. Philadelphia did not outright reject SMG’s status as a potential insured, but rather concluded that there was no coverage because the injury occurred in the parking lot. In other words, the coverage determination turned on the circumstances of the injury not SMG’s status under the policy.
In short, the Court concluded that the potential insured takes the good with the bad. If one seeks to claim coverage as an additional insured, they can be subject to the restrictions of the policy including arbitration clauses even if they did not purchase the policy.
Securing additional insurance has become increasingly more difficult and limited over the years, and this holding presents yet another hurdle to attaining AI coverage. For those seeking coverage, it is important to note that the Court’s ruling may have turned out differently had the carrier outright denied SMG’s AI status, rather than concluding that the injury was not covered.
Your insurance scenario may vary from the case discussed above. Please contact legal counsel before making any decisions. BPH’s attorneys can be reached via email to answer your questions.
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Danielle S. Ward, Balestreri Potocki & HolmesMs. Ward may be contacted at
dward@bph-law.com
Why A.I. Isn’t Going to Replace Lawyers Anytime Soon
April 18, 2023 —
Amir Kahana - Kahana FeldIn a recent article entitled, “A.I. Is Coming for Lawyers, Again” the New York Times explored the longstanding idea that the legal profession is most at risk of being disrupted by A.I. The article claimed that: “There are warnings that ChatGPT-style software, with its humanlike language fluency, could take over much of legal work.” And that: “Law is seen as the lucrative profession perhaps most at risk from the recent advance in A.I. because lawyers are essentially word merchants.”
The problem with these predictions is that they are based on a fundamental misunderstanding of what lawyers do, which is primarily to provide sound advice and formulate sophisticated strategy. All the wordsmithing in the world won’t make a bad case good, or vice versa. Lawyers do not have a Jedi mind trick. We analyze the facts, we make the best arguments possible under the circumstances, we advise our clients on their prospects, and we come up with a strategy for an optimal outcome, which almost always includes a path towards settlement. We are strategists and trusted advisors. Not wordsmithers.
This is not anything ChatGPT or current A.I. can do, or even come close to doing. And how do I know that? Because in a recent Wall Street Journal article, experts on self-driving cars explain that A.I. is nowhere close to being able to drive a car autonomously. In an article entitled “When Will Cars Be Fully Self-Driving?” the experts explain that the main impediment to fully autonomous vehicles is how dumb A.I. is. As one of the leading experts explains, fully autonomous cars “would require human-level artificial intelligence, and there is no commonly accepted theory on how to get there. As long as there is no human-level AI, autonomous mobility will be limited.”
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Amir Kahana, Kahana FeldMr. Kahana may be contacted at
akahana@kahanafeld.com
