No Common Interest Exception Without Prior Agreement The Illinois Appellate Court for the First District, applying Illinois law, in an opinion written by Justice Mikva, reversed the circuit court and found there was no good faith settlement that operated to require dismissal of the third-party defendant.  The appellate court also held that the common interest exception to the waiver of attorney client privilege did not apply... Read More

Expert’s Testimony Too Speculative to Satisfy Policyholder’s “Sudden and Accidental” Burden The Seventh Circuit panel of Judge Barrett, Judge Sykes and Judge St. Eve, in an opinion written by Judge Barrett, upheld the district court’s decision to strike expert testimony.  The Seventh Circuit held that without the expert testimony, the insured had no evidence to support its position that a “sudden and accidental” exception to the... Read More

Possibility of Substantial Punitive Damage Award Justifies Independent Counsel The Illinois Appellate Court for the First District, applying Illinois law, in an opinion written by Justice Harris, and joined by Justices Cunningham and Connors, held that Xtreme Protections Services LLC (“Xtreme”) was permitted to retain its own defense counsel and recover the costs from its insurer, Steadfast Insurance Company (“Steadfast”), due to a conflict of... Read More

Duty to Defend Even When Insured’s Actions Intentional if the Resultant Harm was Unforeseeable The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, denied a motion for judgment on the pleadings filed by State Farm in a declaratory judgement action in which State Farm argued that it had no duty to defend policyholders in a suit brought by the... Read More

Insurer Cannot Use Extrinsic Evidence to Demonstrate That Fire Suppression Foam is a “Pollutant” to Avoid Defense Obligation A Florida appellate court, applying Florida law, ruled that an insurer must defend a policyholder that was alleged to have caused damage to airplanes from contact with its fire suppression foam.  The court held that the lower court erred in weighing outside, or extrinsic,... Read More

Increasing Reserves Insufficient to Prove Insurer Thought Liability Reasonably Probable The Seventh Circuit, applying Illinois law, affirmed a lower court ruling that held the American Physicians Assurance Corporation, Inc. (“APAC”) acted in bad faith when it rejected settlement offers in the underlying case against its policyholder, Surgery Center at 900 North Michigan Avenue, LLC (“Surgery Center”).  The appellate court reached... Read More

Subcontractor Entitled to Defense Even if Contractor Would Not Be The First District Appellate Court of Illinois, in an opinion written by Judge Mikva, reversed the trial court and found that when a complaint alleges an insured subcontractor’s faulty workmanship caused damage to other property outside the scope of the subcontractor’s work, there is a duty to defend.  Because the appellate... Read More

2-1 Decision Finds No Coverage Because Autoerotic Asphyxiation Constitutes an Intentionally Self-Inflicted Injury In a 2-1 decision, the Seventh Circuit reversed trial court Judge Robert Dow’s ruling that death from autoerotic asphyxiation would reasonably be considered an “intentionally self-inflicted injury” not covered by portions of the decedent’s life insurance policies.  The majority opinion written by Justice Brennan was joined by Justice Mannion with Justice Bauer dissenting.  The decedent... Read More

Asbestos Claims Constitute Multiple Occurrences Implicating Aggregate Limits The First District Appellate Court, in an opinion authored by Justice Pucinski, and joined by Justices Mason and Hyman, reversed the trial court’s issuance of summary judgment for the insurers.  The policyholder, Hennessy Industries (“Hennessy”), was the successor-in-interest to Ammco Tools Inc. (“Ammco”), a brake shoes manufacturer which incorporated asbestos.  As a result, Ammco/Hennessy is named in asbestos personal... Read More