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

Failure of Professional Hockey Team to Give Notice of Player Lawsuit Bars Coverage for Default Judgement An Illinois federal court, applying Illinois law, concluded that an insurer is not liable to provide coverage for a default judgment to an injured ex-Federal Hockey League player because the insurer was not given notice of the underlying lawsuit. The underlying plaintiff, Kyler Moje (“Moje”), played minor-league hockey for the Danville Dashers, a... Read More

APCIA Insurer Group Rejected for Offering Duplicative Arguments The Supreme Court of Delaware, in an order responding to an insurance trade group’s motion for leave to file an amicus curiae brief in a coverage appeal before the court, denied the trade group’s motion and rejected the brief. The court is reviewing consolidated appeals in a set of related insurance coverage disputes.  The American Property Casualty Insurance... Read More

Insurer Liable Only When There is a Clear Demand to Settle Within Limits and a Reasonable Deadline to Respond The Supreme Court of Georgia issued a unanimous decision clarifying Georgia law regarding an insurer’s duty to settle.  Reversing the Court of Appeals’ decision, the Supreme Court concluded that the insurer was entitled to summary judgment and could not be sued for failing to settle a... Read More