Insurance Claims And Issues

Insurance Expert, Custom and Trade Usage of Insurance Policy Terms.

   Two Insurance Companies faced off on many issues in Download Nationwide Life Ins. Co. v. Commonwealth Land Title Ins. Co. (E.D. Pa. Jan. 20, 2011 Opinion on MIL re Expert), PUBLIC ACCESS, also published as 2011 WL 204619 (E.D. Pa. Jan. 20, 2011)(authorized password required to access Westlaw).  One of the many issues in contention was Commonwealth Land Title Insurance Company's use of an Expert Witness to testify about the background of terms and provisions used in Commonwealth's Insurance Policy.

   Commonwealth issued a Title Insurance Policy to Nationwide.  There came a time when Nationwide made a Claim on that Policy and Commonwealth denied the Claim.  Nationwide sued for Coverage.  Commonwealth listed an Expert Witness to testify about its Title Insurance Policy.  Nationwide objected and moved to strike the Expert as a Witness.

   Three of Nationwide's mostly unsuccessful arguments will receive focus here.  First, Nationwide argued that the Commonwealth Policy language was clear and so no Expert Testimony was required.  Under Pennsylvania law which governed the proceedings, "[t]he court must, however, also consider evidence of industry custom and practice."  Nationwide Life Ins. Co. v. Commonwealth Land Title Ins. Co., 2011 WL 204619 at *7.  In fact, "the Pennsylvania Supreme Court has held that trade usage must always be considered in interpreting a contract, regardless of whether a phrase is ambiguous."  Id.  [Emphasis by the Court.]  The Court rejected this prong of Nationwide's argument accordingly.

   Nationwide also argued that the particular Expert Witness at issue, based the Opinions he expressed in his Report "solely on subjective belief and unsupported opinion."  Id. at *8.  For some reason, Nationwide also criticized what it perceived as "no methodology" for this Expert's Opinions.  The Federal Court rejected this argument, beginning with a long list of this Expert's experience.  In sum, this Expert is a lawyer who has dealt with Title Insurance issues.  He was regional claims counsel, and was employed at two Title Insurance Companies, wrote a book about Title Insurance, and edited a newsletter about Title Insurance Law.  "Such an extensive background in the land title insurance industry," wrote the Court while rejecting Nationwide's contentions to the contrary, "unequivocally puts [this Expert] in the particular class of persons who could testify as to the custom and trade of certain terms used within title insurance policies.  No further 'methodology' for his opinions is necessary."  Id.

   Last, Nationwide won half a loaf with the argument that this Expert could not testify about legal conclusions, and that arguably all of the Opinions he expressed in his Report are legal conclusions.  The Federal Court agreed that no Expert can testify to legal conclusions.  Those portions of his report "will be stricken" and the Court refused to consider them in passing upon the parties' motions for summary judgment.  Id. at *15.  There was a "but" coming:  The Expert Witness in question could offer Opinions about "title insurance industry practice and customs" including regarding the terms and provisions at issue in the Commonwealth Title Insurance Policy.  Id.

   The Federal Judge in this case recently granted leave to file an Interlocutory Appeal on the scope of Coverage under the Commonwealth Title Insurance Policy. Download Nationwide Life Ins. Co. v. Commonwealth Land Title Ins. Co. (E.D. Pa. Memorandum Opinion Filed March 23, 2011), PUBLIC ACCESS, also published as 2011 WL 1044864 *4 (E.D. Pa. March 23, 2011).

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Mortgage Insurance Absolutely No Antidote for Radioactive Investments.

'It was so good, they had to do it again.'

   Mortgage Insurance reportedly is being hyped as  a way to "protect against the increased risks in loans that have smaller down payments."  See Gretchen Morgenson, "Fair Game/Note to Banks:  It's Not 2006 Anymore" p. 1, col. 4 (New York Times, "SundayBusiness" Section, Sunday, March 27, 2011).

   Reportedly, lenders are on the receiving end of sales pitches to require smaller down payments when or if they make home loans.  (Yes, again.)  They are being told that Mortgage Insurance will pay if the buyer does not.

   There is a problem with that sales pitch.  The problem is reality.  Instead of making payments on Mortgage Insurance Policies at all times since the current Financial Fiasco began, Mortgage Insurance Companies took a different view of the situation.  They are attempting to rescind those Mortgage Insurance Policies which were, they say, based on fraud and misrepresentation.

   If you or your banking clients think that Mortgage Insurance Companies will change their approach in 2011, please think again.  Ask the Mortgage Insurance Companies what they will do, not the people who make money from convincing you to trust them and not your lying eyes. 

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Banks', Builders' Unemployment Solution: Buy Insurance to Insure Paying Them.

"Everything is changing. Nothing is new.":  Old saying.

   It is not actually newsworthy that builders and bankers want you and your clients to pay Premiums on Insurance Policies for the purpose of insuring your Mortgage Payments.  It has always been called Mortgage Insurance.

   The answer to the question of who really wants this type of Insurance is answered by who gets money from selling it to you and to your clients.  They are not you or your clients.  They are instead the builder who sells you a new house and folds the Premium amounts into the purchase price that the builder receives from you, and the banker who receives the Insurance payment if you cannot make your Mortgage payment to the bank.  The builders and the banks in 2011 are offering this Insurance to you and to your clients for "free," they say, although the Premium amounts are still part of the purchase price and so they are part of the amount mortgaged too.  Another "new" approach by builders and bankers urging you and your clients to get this product is that this Insurance is just the right financial product to continue to make payments in the event that you or your clients lose your jobs -- continue to make payments to them, the builders and bankers of course.

   The current developments are reported by Kenneth R. Harney, "Builders, Banks Offer Free Job-Loss Insurance to Home Buyers" (Los Angeles Times Online, latimes.com, Sunday, March 27, 2011).  The reporter in this linked newspaper article suggests that in at least some situations "job loss coverage can be a 'why not?' proposition."

   Before you advise your clients to purchase this sort of Coverage, or buy it for yourself, consider just how important it is to you and to your clients to continue to make payments on a Mortgage even if jobs are lost and people die and any of the other events occur that make payments on a Mortgage perhaps of less concern to you than to the builders and bankers who try to convince you to buy the Insurance.  And consider just how important it is to finance the Premium payments for such Insurance through your Mortgage over a term of say 30 years, rather than purchasing the Insurance directly from the Insurance Company and perhaps purchasing Coverage that also provides for payments to you or to your clients and not just to Mortgagee Banks.

   Builders build and sell houses.  Bankers sell Mortgages.  Their expertise in selecting Insurance products is likely nonexistent, it is not what they do for a living.  Your expertise in buying Insurance is better than theirs.  Realize that, and ask questions.

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Florida First-Party Bad Faith Work Product, Attorney Client Privilege ...

... Again.

   Joining a cascade of cases, Florida's Third District Court of Appeal issued an opinion in a Hurricane Wilma case that contains twin holdings of great interest for First-Party Bad Faith Policyholders, lawyers, and Courts, in Download State Farm Florida Insurance Co. v. Puig (Fla. 3d DCA Case No. 3D10.2104, Opinion Filed March 23, 2011)(PUBLIC ACCESS, STATED NOT FINAL), also published as 2011 WL 1008266 (Fla. 3d DCA Opinion Filed March 23, 2011)(authorized password required to access Westlaw).  The appellate panel unanimously quashed those parts of a Trial Court's Order that (1) essentially ignored the requirements of Work Product and (2) refused to entertain any Attorney Client Privilege objections, at all, in a First-Party Bad Faith Case.

   Therein lies a tale from Florida's Third District.

   First, the Trial Court's Order was quashed concerning production of State Farm's Claims File prepared after an underlying Insurance Coverage proceeding concluded:

   Notably, over State Farm's assertions of work product protection, the trial court's order compelled the production of documents prepared subsequent to February 25, 2008, after the underlying litigation over the [Policyholders'] claim had concluded.

State Farm Fla. Ins. Co. v. Puig, 2011 WL 1008266 at *1.  The Trial Court erred, said the Appellate Court, because although Work Product immunity can be overcome even as to post-Coverage resolution in a First-Party case, the Trial Court did not require and the Policyholders did not meet their burden to make the required showing to actually defeat Work Product immunity.  State Farm Fla. Ins. Co. v. Puig, 2011 WL 1008266 at *2.

   Second, the tale that lies therein.  The Third District panel in this case also quashed the Trial Court's Order to the extent that the Trial Court refused to consider Attorney-Client Privilege objections to production of the "entire" State Farm Claims File in this First-Party Bad Faith Case.  State Farm Fla. Ins. Co. v. Puig, 2011 WL 1008266 at *2-*3.  In making this ruling, the panel rejected an invitation from the Policyholders on appeal to "revive" a 1987 Third District holding which barred Insurance Companies from ever successfully asserting Attorney-Client Privilege in Bad Faith Cases.  State Farm Fla. Ins. Co. v. Puig, 2011 WL 1008266 at *3 n.2.  Instead, the 2011 Third District panel held:

   The instant petition [for certiorari] must be granted in large part because the essential requirements of law provide that the attorney-client privilege exists and is available to an insurer that is faced with a bad faith claim.

State Farm Fla. Ins. Co. v. Puig, 2011 WL 1008266 at *3.

   What a difference a day makes, the old song says.  What a difference 24 years make, this new decision says.

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Lower Healthcare Costs, Say Health Insurance Companies Paying CEO Bonuses?

   Reportedly, at least some Health Insurance Companies are showing two faces to the people at one time:  One, telling physicians and other healthcare providers to take less money for health care, and two, paying their officers even more money for their services.  See Robert Weisman, "Insurer Battles Identity Crisis" (Boston Globe Online, Sunday, March 20, 2011)(story features Blue Cross Blue Shield of Massachusetts).

   This is just not good.  It is, well, unhealthy.  Treatment appears to be called for.

   When will it come?  If not now, when?

   Who will work to improve this situation?  If not you, who?

The author is Co-Chair of the Health, Life and Disability Insurance Law Subcommittee of the American Bar Association Insurance Litigation Committee.

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Mortgage Servicing Bill of Good Faith and Fair Dealing?

    Here is the question and the predicate for it:

When you take out a home mortgage, do you expect to be treated fairly and competently by your bank or loan servicer?

Most likely you do. But the widely publicized "robo-signing" and foreclosure scandals suggest that for thousands of homeowners, fair dealing and competence have not been routinely available at some of the largest mortgage servicing operations in the country.

Kenneth R. Harney, "Borrowers May Get a Mortgage Servicing Bill of Rights/In Response to Alleged Abuses, State Attorneys General Have Crafted a Draft Proposal That Sets Out Minimum Standards and Operating Procedures That Would Govern How Homeowners Are Treated" (Los Angeles Times Online, Sunday, March 20, 2011).

   The 50 State Attorneys General propose this answer:  As a central part of their proposed settlement with "the 14 biggest banks and servicers," mortgage servicers would agree to a new mortgage servicing bill of rights for consumers setting out "minimum standards and operating procedures that would govern how homeowners are treated."  Kenneth R. Harney, "Borrowers May Get a Mortgage Servicing Bill of Rights/In Response to Alleged Abuses, State Attorneys General Have Crafted a Draft Proposal That Sets Out Minimum Standards and Operating Procedures That Would Govern How Homeowners Are Treated" (Los Angeles Times Online, Sunday, March 20, 2011).

   The core of the proposed minimum standards and operating procedures is Good Faith and Fair Dealing.

 

As an aside, the title of the linked newspaper article refers to "alleged abuses" concerning mortgages.  That seems like newspapers' way of describing criminals caught red-handed, as "alleged perpetrators".

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No CGL Covered Costs or Fees for CERCLA Cleanup ...

... Fourth Circuit holds in Federal Case Under Maryland Law.

   In Industrial Enterprises, Inc. v. Penn America Insurance Co., 2011 WL 925451 (4th Cir. Opinion Filed Friday, March 18, 2011)(authorized password required to access Westlaw), the Fourth Circuit was confronted with an Insurance Coverage issue for Pollution.  The Insurance Coverage Question it faced was whether a standard Comprehensive General Liability Insurance Policy ("CGL") provided Coverage for response costs including defense attorney's fees concerning a CERCLA cleanup.

   In other words, did the standard CGL Policy at issue in this case provide Defense Coverage for costs incurred by the Policyholder-Insured in response to an apparent PRP or potentially responsible party letter sent to it by the Federal Environmental Protection Agency, to remediate the presence of hazardous substances on the Policyholder's land..

   The United States District Judge answered this question "yes" and, on summary judgment, awarded the Policyholder $465,774.50 in defense attorney's fees plus additional, other response costs.

   The Fourth Circuit reversed in this case arising under Maryland law, in a split 2-to-1 panel decision:

On appeal, we reverse. Based on the decision of Bausch & Lomb, Inc. v. Utica Mutual Insurance Co., 625 A.2d 1021 (Md.1993), where the Maryland Court of Appeals held that a similar CGL policy did not cover expenses incurred in response to the State's regulatory order to remove soil containing hazardous chemicals, we conclude that Industrial Enterprises' liability under CERCLA is not liability for “property damage,” but rather regulatory liability for response costs. Accordingly, we conclude that Penn America's CGL policy does not cover Industrial Enterprises' regulatory liability and, therefore, Penn America has no duty to provide Industrial Enterprises with a defense.

Id. at *1.  For those facing this and similar Insurance Coverage Questions, this case provides perhaps the most recent addition to a long list of decisions addressing this Question.

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Pushing the Limits of Providing Detailed Damages Computation.

   In Download Smith v. State Farm Mut. Auto. Ins. Co. (E.D. Mich. Case No. 10.11016, Memorandum and Order Filed March 4, 2011) PUBLIC ACCESS, Ms. Trinity Smith filed suit for no-fault benefits for injuries arising from a motorcycle accident.  Nationwide, the Defendant, filed a motion to dismiss her Complaint "for Smith's failure to comply with discovery."  Id. at *1.

   In the Federal Judge's opinion, "Smith has pushed the limits in her failure to cooperate".  However, the Court denied the motion to dismiss for failure to provide discovery, i.e., for failure to provide a detailed computation of damages which every Plaintiff seeking damages in Federal Court is automatically required to provide to a Defendant.  Under Federal Rule of Civil Procedure 26, there is no need of any request to produce it.  In fact, under many Local Rules, discovery is postponed in the case until the Rule-required time period for exchanging required information is over.  In this case, "under the present set of facts, dismissal is premature," in the Federal Court's opinion, because of "a breakdown in communications between Smith's counsel and Smith," in basic and simple terms.  Id. at *2.

   The most interesting and significant aspect of this Insurance Claim, among many interesting and significant aspects particularly to the parties, is that the required disclosure of a detailed computation of damages under Federal Rule of Civil Procedure 26 was considered under a motion to dismiss for "failure to provide discovery." Failure to provide "discovery" can lead to a motion under Federal Rule of Civil Procedure 37   Rule 37 motions ordinarily involve requests for discovery rather than failure to obey the Federal Rules, although Rule 37(a)(3)(A) makes provision for enforcement of required disclosure under Rule 26..  In this case, the parties based their arguments and the Federal Judge based the Court's decision on the ground of a failure to provide discovery.  There is an aggressive, perhaps "robust" argument available here, however, that the issue in this peculiar case involved instead an asserted failure of a party to obey the Federal Rules which required disclosure.  Here, that party was the Plaintiff who invoked the Federal Rules when she filed her Complaint in Federal Court.

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California Bad Faith Stampede: First-Party, Third-Party Summary Judgment ...

... in Same Case.

   In Download Gaylord v. Nationwide Mut. Ins. Co. (E.D. Cal. Case No. 1.10.CV.620, Order on Defendants' Motion for Summary Judgment Filed March 4, 2011) PUBLIC ACCESS, also published as 2011 WL 836459 (E.D. Cal. March 4, 2011) (authorized password required to access Westlaw), the Court was confronted with claims both for First-Party Bad Faith and for Third-Party Bad Faith.   The Court granted the Insurance Companies' motion for summary judgment on all the Bad Faith Claims.

   The Federal Court listed many hornbook rules of law in a lengthy opinion, including these rules of California Insurer Bad Faith law:

 If a loss is not covered and no benefits are due, there can be no tort liability for breach of the implied covenant, even if the investigation was negligent. Benavides v. State Farm General Ins. Co., 136 Cal.App.4th 1241, 1250-51 (2006). The “ultimate test” in bad faith liability claims is whether the insurer's denial/conduct was unreasonable. See Nieto, 181 Cal.App.4th at 86. Where there is a “genuine issue” or “genuine dispute” as to the “insurer's liability under the policy for the claim asserted by the insured, there can be no bad faith liability imposed on the insurer for advancing its side of that dispute.”

Id. at *17.  Most if not all Courts in other jurisdictions also apply these rules to Insurer Bad Faith claims; however, while "reasonableness" is a hallmark of First-Party Bad Faith exposure, Third-Party Bad Faith does not depend on "reasonableness" for its "ultimate test".  The Federal Court apparently applied these rules to both sets of claims in this case, those based on assertions of First-Party Bad Faith and those involving alleged Third-Party Bad Faith.

   It is also significant to Insurer Bad Faith Law that this case involved reliance on Expert opinions which the Insurance Companies received in connection with their denial of a First-Party Claim and in connection with their refusal to defend a Third-Party Claim against the insured.  In this case, their reliance was reasonable in the eyes of the Federal Court, in fact, so reasonable that it was part of the reason that the Court granted the motion for summary judgment.

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No Coverage, No Bad Faith ... And No Washington State CPA.

  In an action in which the Plaintiff advanced theories of Additional Insured status, Insurance Bad Faith, and Washington State Consumer Protection Act ("CPA") violations, the Federal Court held that there was no Coverage and so there were no Bad Faith or CPA claims available, either:

Nonetheless, an insurer is entitled to summary judgment if reasonable minds could not disagree that denial of coverage was based on reasonable grounds.

Download Davis v. Liberty Mut. Grp. (W.D. Wash. Case No. C10-5248, Order on Summary Judgment Motions Filed Feb. 28, 2011) PUBLIC ACCESS, also published as 2011 809793 (W.D. Wash. Feb. 28, 2011)(authorized password required to access Westlaw).

   In that case, after writing this conclusion, the Federal Court further found that there was no evidence that the Insurance Company did not provide requested relevant provisions of the insurance policy, in basic terms, and that there was no Bad Faith in that regard nor was there a valid CPA claim available in that regard, either.

    It is the law in most jurisdictions that where there is no Insurance Coverage, there is no Insurance Bad Faith whether under third-party or under first-party insurance policies.  In Washington State, however, there can be a claim for statutory unfair practices even where there is no Coverage.  That there is no available statutory claim or cause of action, either, would be a fairly new development.  See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" §3:100 (third-party) and §9:25 (first-party)(Shepard's/McGraw-Hill Second Edition; West Publishing Co. 2010 Supplement; Third Edition in process).

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American Law Institute Set to Restate Law of Liability Insurance.

   The American Law Institute is set to address whether and how to restate the Principles of the Law of Liability Insurance today.  The ALI has already anounced that its "default" orientation is to rewrite the Law, rather than state what the Law is today.

   Check out the information publicly available at http://www.ali.org/.

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Post-Settlement Notice Bars Coverage Under Pennsylvania Businessowner's Policy.

   In Download Nationwide Mut. Fire Insurance Co. v. Nova Real Estate LLC (E.D. Pa. Case No. 09.0303, Memorandum [Opinion] Filed March 1, 2011) PUBLIC ACCESS, also published as 2011 WL 721475 (E.D. Pa. March 1, 2011)(authorized password required to access Westlaw), a Federal Court held that Pennsylvania Insurance Law precluded all Coverage in a case of post-settlement first notice to a Businessowner's Insurance Company in a fire loss.  The Federal Court granted the Insurance Company's Motion for Summary Judgment for that reason.

   In that case, it is reported that the Policyholder's Attorneys negotiated a $3Million settlement of an underlying liability case filed by a third party against the Policyholder.  The Policyholder's Attorneys then sent the Insurance Company a demand to pay indemnity under the Businessowner's Policy:

On October 29, 2008, more than three and one-half years after the fire, counsel for Kay and Ranalli notified Nationwide by letter of the fire, the lawsuit, the settlement and the assignment of rights....  Defendants [Policyholders in this case] admit that this letter was the first notice that Nationwide received of the fire, the lawsuit or the settlement.

Id. at *2.

     Under these circumstances, the Federal Court agreed with Nationwide's reasons for denying Coverage:

       Nationwide argues that under Pennsylvania law there is no coverage under the policy issued to Nova Realty for the settlement of the Kay Lawsuit because Nova Realty failed to provide timely notice of the Kay Lawsuit and the subsequent settlement agreement and Nationwide suffered prejudice as a result of the late notice. Nationwide also argues that it is not obligated to provide indemnification for claims arising from the Kay Lawsuit because Nova Realty and Lawrence Eburouh voluntarily made payments and incurred expenses without Nationwide's consent in violation of the Nationwide Policy.

Id. at *4.

   Under Pennsylvania law in short, said the Federal Court, violations of Notice and Settlement Conditions precluded Coverage on the facts of this case:

After a thorough review of the record, we are satisfied that the Defendants failed to comply with the clear terms of the Nationwide Insurance Policy by providing late notice of claims, that Nationwide was prejudiced by the untimely notice, and that therefore Plaintiff is not liable to Defendant for coverage on the claims arising from the Kay Lawsuit. We also conclude that Nationwide is not obligated to indemnify for claims in the Kay Lawsuit due to Nova Realty's breach of the voluntary payments clause of the Nationwide Policy.

 Id.

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Higher Health Insurance Premiums Charged by Health Insurance Companies, For ...

   Less Coverage.

   Higher Deductibles.

   And More Limited Choices.

   At the same time, Premiums for Health Insurance are increasing.

 See Robert Pear, "Health Care Premiums Soar as Coverage Shrinks" p. A13, col. 1 (New York Times Nat'l ed., Saturday, March 5, 2011). 

   This is probably a rhetorical question, but does anyone else think that as Health Care Costs are increasing, they not only cause increases in Premiums for Health Insurance, but likely also cause these other effects on available Health Insurance Coverage as well?

Continued from the Post of Monday, March 7, 2011.

The Author is Co-Chair of the Health, Life and Disability Insurance Subcommittee of the American Bar Association's Insurance Coverage Litigation Committee.

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Removal When Policyholder Seeks Policy Limits: Federal Court Denies Remand.

   There is sometimes a question about what to do if you are in an Insurance case and the Policyholder has not requested a sum certain.  Is the case appropriate for Removal to Federal Court, or suited for Remand if the Insurance Company tries to remove the case to Federal Court?

    At least where the Policyholder seeks the full Policy Limits in excess of the $75,000.00 jurisdictional amount required for diversity of citizenship jurisdiction in Federal Court, the answer is clear for one Federal Court:

Where the insured seeks to recover to the fullest extent of coverage, the court can determine the amount in controversy by reference to the face of the policy.

 Download Borja v. Geovera Specialty Insurance Co. (M.D. Fla. Case No. 8.11.cv.106, Order Filed February 22, 2011) PUBLIC ACCESS,, also published as 2011 WL 721475 *3 (M.D. Fla. February 22, 2011)(authorized password required to access Westlaw; denying Motion to Remand where Policyholder sought full Policy Limits of $100,000.00 for "Coverage A Dwelling" under Homeowner's Policy at bar).

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Health Insurance Premiums Up, Health Care Providers Responsible.

   But that does not stop critics of the Patient Protection and Affordable Care Act from charging that the PPACA is responsible.  Heck, it does not even slow them down.

   The only thing wrong with that charge is that it is not true.

   Health Insurance Premiums are rising "primarily because of the underlying cost of care and a growing demand for it."  Robert Pear, "Health Care Premiums Soar as Coverage Shrinks" p. A13, col. 1 (New York Times Nat'l ed., Saturday, March 5, 2011).  Who says so?  Health Insurance Companies.  They are the ones who pay the costs of the underlying care.  They are the ones who raise the Health Insurance Premiums.

   "Economists and state regulators" also say this.

   Sometimes the truth intrudes on an otherwise perfectly good charge.

To Be Continued .....

The Author is Co-Chair of the Health, Life and Disability Insurance Subcommittee of the American Bar Association's Insurance Coverage Litigation Committee.

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Pennsylvania, Other States Uninsure People, Subsidize Oil, Other Companies.

   Pennsylvania was the first State to strike oil.  It became wealthy, back in the day.

   Now, in 2011, Pennsylvania is dropping people from receiving Health Insurance benefits to help balance its budget.  So are other States.  See Kevin Sack, "Feeling Budget Pinch, States Cut Insurance" (New York Times Online, Wed., March 2, 2010).

   Now, in 2011 -- and for years past -- the Federal Government pays Oil Companies money.  The Federal subsidies began in a national effort to minimize the risk of drilling for oil and encourage corporations to enter that part of our national economy.  Now that the corporations have not only entered but prospered in oil, the Federal subsidies have not stopped.

   Parenthetically, the Federal Government resumed granting permits to Oil Companies to drill in the Gulf of Mexico for the first time since the BP Oil Disaster.  The largest ownership interest in the first rig to receive a new permit is held by BP, which owns 46.5%.  Ever alert to bad publicity recently, the application was successfully submitted in the name of "Noble Energy, Inc.," which owns 23.25% of the rig located in the same area of the Gulf Coast as Deepwater Horizon used to be located, Mississippi Canyon.  These ownership interests were revealed in an April 1, 2009 Press Release by Noble Engergy, "Noble Energy Announces Deepwater Gulf of Mexico Discovery at Santa Cruz".

   So do States continue to spend public monies in efforts to encourage the growth of companies located within their borders, and States continue to spend public monies to encourage the relocation of many companies who are thinking of leaving other States.  Or spending public monies to perhaps encourage foreign companies to think about leaving other States and relocating regardless of whether the companies have  previously given any thought to relocating.

   These are choices.  One obvious effect of these particular choices is to make it far more difficult or even impossible for those who already have so little in their lives, to go to the doctor or undergo an operation essential to their continued existence, in order to give public money -- some of which comes from the very same disenfranchised uninsured -- to those who do not need any more.  Agree or disagree, that is what is happening.

   Your and your clients' taxpayer dollars at work.  Are these your choices of how to spend the taxes you pay?  Are these your priorities?

The author is Co-Chair of the Health, Life and Disability Subcommittee of the Insurance Coverage Litigation Committee of the American Bar Association.

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New York: Primary CGL, Excess D&O Means No Defense Contribution.

"Millions" for Defense From CGL Primary Carrier, Not One Darn Penny From Director's and Officer's Carrier, the way that their Other Insurance Clauses are written.

   The New York Court of Appeals just held that where both a CGL carrier and a D&O carrier insured the same Property Owners Association, the question of who pays for defense expenses incurred for defending the Insured depends on the language of the two carriers' competing Other Insurance Clauses.  Download Fieldston Property Owners Assn v. Hermitage Insurance Co. (N.Y., Opinion Filed Feb. 24, 2011) PUBLIC ACCESS, STATED UNCORRECTED, SUBJECT TO REVISION,, also published as 2011 WL 649812 (N.Y. Feb. 24, 2011)(authorized password required to access Westlaw; page numbers not available at the time of this post).

   The Commercial General Liability policy was written with a Primary Other Insurance Clause.  The D&O policy was written with an Excess Other Insurance Clause.  In a dispute between the two carriers over who pays for their common Insured's defense expenses for underlying suits, the New York Court of Appeals held that the Primary CGL pays all of the defense expenses of the underlying suits on behalf of that Insured, and the D&O Carrier pays none.

   The way that the Other Insurance Clauses are written in the Insurance Policies determines the outcome in this situation, every time.

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D.C. Judge to Plaintiffs From North Carolina, Texas, and New York:

"Get Out of Town.  And Take Your Healthcare Lawsuit With You."

   In much friendlier language than that, the U.S. District Court for the District of Columbia told outside Plaintiffs and their lawyers from Michigan, Virginia, Tennessee -- and one or two from the District, that their Complaint claiming unconstitutionality of the Patient Protection and Affordable Care Act is dismissed.  Download Mead v. Holder (D.D.C. Case No. 1.10CV950, Order Filed February 22, 2011) PUBLIC ACCESS (64 page Opinion).,

   This makes the fifth different time that a Federal Judge has been asked to determine the constitutionality of the PPACA, and the third time that a Judge has ruled that the PPACA is constitutional.

   The Order and accompanying Memorandum Opinion were both filed on Tuesday, February 22, 2011.  The Plaintiffs, including the lead Plaintiff, a person from North Carolina named Ms. Margaret Peggy Lee Mead (no relation, different spelling), filed their Notice of Appeal on Friday, February 25, 2011.

   The Plaintiffs challenging the PPACA seem pretty confident of the outcome once their appeals eventually move from the next likely level of review, which is at the Circuit Court of Appeal level, and reach the U.S. Supreme Court for an expected conclusion.

This is an UPDATE of a post here on February 14, 2011, "Judges With Different Experience Decide Constitutionality of Federal Healthcare Law".

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