Monthly Archives: September 2014

Iowa Decision Underscores the Danger of Sharing Privileged Material with Reinsurers

Last month, a federal court in Iowa handed down a decision holding that neither work product nor attorney-client nor the common interest doctrine shield legal advice and analysis from production in  discovery once it has been shared with a carrier’s reinsurers.  The case – Progressive Cas. Ins. Co. v. F.D.I.C., — F.R.D.— , 2014 WL 4168577, 2014 U.S. Dist. LEXIS 116909 (W.D. Iowa, Aug. 22, 2014) – involved a directors & officers (“D&O”) liability policy rather than a first party property insurance policy, but it nonetheless sounds a cautionary note about the potential consequences of such disclosures. The case arose after the Office of Thrift Supervision closed Vantus Bank and appointed the FDIC as its receiver.  The FDIC then filed

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Posted in Privilege, Reinsurance

Pennsylvania Court Addresses What Is a Coverage Dispute for Appraisal Purposes

Last month, a Pennsylvania federal court rejected the notion that a dispute over whether an admittedly covered occurrence necessitated repair of certain discrete portions of the damaged structure was a coverage dispute, characterizing it instead as merely a dispute over the extent of loss.  As a result, Currie v. State Farm Fire & Cas. Co., 2014 WL 4081051, 2014 U.S. Dist. LEXIS 117970 (E.D.Pa., Aug. 19, 2014) held that the insurer could not refuse appraisal and stated that it was being “disingenuous” in arguing otherwise. The Curries were the owners of a home in Langhorne, Pennsylvania.  When Superstorm Sandy struck on October 29, 2012, the structure took a direct hit from a tree on the property.  The insurer, State Farm

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Posted in Arbitration and Appraisal, Bad Faith, Homeowners Coverage, Loss Adjustment, Superstorm Sandy

Fourth Circuit: Twenty-Seven Days of Inaction Enough to Waive Right to Rescind for Violations of Protective Safeguards Clause

The marriage liturgy in the Anglican Book of Common Prayer contains the well-known line “speak now or forever hold your peace,” and the take-away from a recent Fourth Circuit decision out of North Carolina is clearly “act now or forever lose your rights.”  In Colony Ins. Co. v. Peterson, — Fed.Appx. —, 2014 WL 4179962, 2014 U.S. App. LEXIS 16320 (4th Cir., Aug. 25, 2014), a divided panel of the Court of Appeals held that an insurer had to pay a $2.5 million fire loss even though the policyholders had made material misrepresentations in their application and violated a protective safeguards endorsement.  The carrier was deemed to have waived its right to rescind and to be estopped from denying coverage

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Posted in Arson, Arson and Fraud, Fire, Inspection, Protective Safeguards, Rescission, Waiver

Texas Limits Scope of Anti-Technicality Statute and Material Breach Doctrine in Vacancy Clause Case

Last week, the Texas Supreme Court handed down an opinion that involved two unique (and somewhat troublesome) creatures of state law – the so-called “anti-technicality” statute and the material breach doctrine – and in Greene v. Farmer’s Ins. Exc., 2014 WL 4252271, 2014 Tex. LEXIS 758 (Tex., Aug. 29, 2014), it effectively limited the scope of both.  The court thereby gave effect to a provision in a homeowners policy that suspended coverage if a dwelling was allowed to remain vacant for more than sixty days. The case arose after Lewayne Greene moved into a retirement community, vacating her home in Irving, Texas and placing the structure on the market.  She notified her insurer of the move, but she did not

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Posted in Causation, Fire, Prejudice, Vacant or Unoccupied
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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