NOTEWORTHY NEW RULINGS
FOURTH CIRCUIT Asbestos/Allocation/Exhaustion/Aggregates (MD)
Fourteen years after the Fourth Circuit upheld the applicability of COPH aggregate limits to cap an insurer’s indemnity exposure for asbestos losses, the Court of Appeals has ruled anew in General Insurance Company of America v. the Walter E. Campbell Co., No. 17-1585 (4th Cir. Mar. 26 2018) that the completed operation hazard applies to bodily injury stemming from an individual’s exposure to asbestos during operations that were completed before the policy went into effect regardless of whether they were ongoing when the individual was first exposed. The Fourth Circuit also rejected the insured’s argument that its 2004 opinion in Wallace & Gale should be reconsidered as ambiguously failing to distinguish between “exposure” and “bodily injury.” Further, the court ruled that Travelers had presented credible evidence demonstrating the exhaustion of its policy notwithstanding the insured’s contention that the evidence upon which the Maryland District Court relied was unreliable and had been admitted in violation of FRE 803(6)(a).
ELEVENTH CIRCUIT Coverage B/”Disparagement”/Exclusions (FL)
The Eleventh Circuit has ruled that a Florida District Court did not err in granting judgment to an insurer in a Lanham Act Claim. In Scott, Blane and Darren Recovery, LLC v. Auto-Owners Ins. Co., No. 17-12945 (11th Cir. April 3, 2018) (unpublished), the court ruled that allegations that the insured had falsely claimed in its public marketing materials that its tuna products were superior to its competitors’ offerings because of the process for smoking the tuna meat were excluded from coverage as arising from the failure of the insured’s “goods, products or services to conform with the advertised quality or performance.”
ALABAMA Class Action/Res Judicata
The Alabama Supreme Court has ruled that a class action must be dismissed in light of the fact that the named representative’s claims are barred by res judicata because summary judgment was earlier granted to the insurer in an earlier case in which she had made the same claim. In Baldwin Mutual Ins. Co. v. McCain, 1160093 (Ala. Mar. 23, 2018), the court ruled that summary judgment should have entered for Baldwin Mutual in light of the fact that the named plaintiff McCain was one of the defendants in a related case in which a court had granted judgment for Baldwin Mutual on the “actual cash value” issue and that this ruling was res judicata as to these new claims. In any event, the court declared that a class should not be certified where the class representative’s claims are subject to a unique defense that would render her claims atypical or might adversely impact her ability to represent the interest of the class as a whole.
IDAHO “Occurrence”/Innocent Insureds
The Idaho Supreme Court has ruled in Farm Bureau Mutual Ins. Co. of Idaho v. Cook, No. 44897 (Idaho Mar. 30, 2018) that an incident in which a visitor to the insured’s campground was intentionally shot by another camper was not an “occurrence” even though the insured took no part in the incident. In rejecting the insured’s contention that the meaning of “occurrence” should be considered based upon the standpoint of the insured, the Idaho Supreme Court ruled that an “occurrence” does not exist where it results from an intentional shooting, whether by the insured or some third-party, nor would it overturn prior precedents to this effect on the basis of some claimed public policy.
ILLINOIS Employee Exclusions/Separation of Insureds
The Appellate Court has ruled that a trial court was correct in entering summary judgment to a CGL insurer for a personal injury claim brought against a general contractor by a subcontractor’s employee. In Vivify Construction, LLC v. Nautilus Ins. Co., 2017 IL App (1st) 170192 (Ill. App. Mar. 27 2018), the First District emphasized that an endorsement to the Nautilus policy extended the standard CGL “injury to employee” exclusions to injuries to “any employee.” The Appellate Division rejected the insured’s challenges to this exclusion based upon the policy’s “separation of insureds” clause, nor would it agree that it was appropriate to consider extrinsic evidence as to the terms the subcontract between the underlying parties where the exclusion in question is unambiguous.
NEW YORK Software Exclusion
A federal district court has ruled in BF Advance, LLC v. Sentinel Ins. Co., Ltd., No. 16-5931 (E.D. N.Y. Mar. 20, 2018) that allegations that the insured used and distributed the plaintiff’s software without its permission were excluded in light of a provision in the Sentinel policy barring coverage for “personal injury arising out of computer code, software or programming used to enable” the insurance website or the “presentation or functionality of an advertisement or other content on the insured’s website.”
OTHER DEVELOPMENTS OF NOTE
* * * Inside the Insurance Industry * * *
The Hanover Insurance Group is contemplating a possible sale of London-based Chaucer, which it acquired for $474 million in 2011.
* * * Restating the Obvious * * *
Amidst the current controversy over the American Law Institute’s treatment of the “plain meaning” rule, the Tennessee legislature has taken the curious step of enacting a statute (HB 1977/SB 1862) requiring that insurance policies be interpreted like all other contracts and declaring that an insurer’s duty to defend should only be based upon facts actually alleged in the law suit against the insured.
