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Posts published in “Insurance Law”

NY High Court Rules in Favor of Lender in Action to Recover Settlement and Defense Costs From Insurer

In an action by a lender and its affiliate to recover insurance proceeds for defense costs of a federal qui tam action and indemnification for the resulting settlement, the New York Court of Appeals recently held that an arbitration panel can reconsider an initial determination, or “partial final award,” so long as the determination or award does not resolve all of the issues submitted for arbitration.

11th Cir. Reverses Injunctive Class Certification Because Actual Relief Was Damages

The U.S. Court of Appeals for the Eleventh Circuit recently reversed a trial court’s certification of an injunction class, holding that the injunctive relief sought by the class was improper because the true relief sought was really damages. A copy of the opinion in AA Suncoast Chiropractic Clinic, P.A. v. Progressive American Insurance Co. is available at:  Link to Opinion. In 2012, Florida’s law requiring automobile insurance policies to provide personal injury protection (“PIP”) benefits up to $10,000 was amended so that “not every injured motorist will be eligible to access all $10,000 in benefits.” Coverage is capped at $2,500…

2nd Cir. Holds Post-Filing Amendment Can Divest Court of CAFA Jurisdiction

The U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a case for lack of jurisdiction because when the plaintiffs withdrew their class action allegations in an amended complaint, the withdrawal divested the court of jurisdiction under the federal Class Action Fairness Act (CAFA). A copy of the decision in Gale v. Chicago Title Insurance Company is available at:  Link to Opinion. The plaintiff, an attorney on behalf of himself and a putative class, sued several title insurance company defendants alleging that they had tortiously interfered with business opportunities and violated Connecticut law because under Conn. Gen.…

8th Cir. Holds Alleged Contract for Interest Rate Reduction May Not Be Barred by Statute of Frauds

The U.S. Court of Appeals for the Eighth Circuit recently held that a borrower’s claims concerning lender-placed insurance practices were barred by res judicata, because the alleged practices were the subject of a class action suit in which the borrower was a class member who was provided notice of the settlement and did not object to the settlement. However, the Eighth Circuit also concluded that the servicer failed to establish that the statute of frauds barred the borrower’s claims concerning an alleged contract for interest rate reduction. A copy of the opinion in Calon v. Bank of America, NA is…

8th Cir. Holds Property Damage Insurer Improperly Withheld ‘Labor Depreciation’ from Claim Payments

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a trial court’s order certifying a class of Arkansas homeowners against an insurer that improperly withheld amounts for labor depreciation when paying covered property damage claims under their insurance policies. A copy of the opinion in Stuart v. State Farm Fire and Casualty Company is available at:  Link to Opinion. A putative class of Arkansas homeowners (“insureds”) sued their insurer alleging that between Nov. 21, 2008 and Dec. 6, 2013 the insurer improperly withheld labor depreciation costs when paying insureds for covered property damage under their insurance policies. The insureds…

Wisc. Supreme Court Holds Fire Spreading Across Multiple Properties Was Single ‘Occurrence’ Under CGL Policy

Reversing the rulings of the trial court and intermediate appellate court, the Supreme Court of Wisconsin recently concluded that a fire which spread across several properties was a single ‘occurrence’ for purposes of the commercial general liability policy, and not a new ‘occurrence’ each time the fire crossed a property line. By determining that the fire was a single ‘occurrence’ under the policy, the policy’s reduced per-occurrence limit for property damage “due to fire, arising from logging or lumbering operations” under its incorporated endorsement, rather than its higher aggregate limit, applied. A copy of the opinion in Ecura Insurance v. Lyme…

3rd Cir. Limits Title Insurer’s Duty to Defend

The U.S. Court of Appeals for the Third Circuit held that a title insurer under Pennsylvania state law only had a duty to defend its insured lender for the covered claims alleged in the four corners of a borrower’s complaint, not for all alleged claims under the “in for one, in for all” rule. A copy of the opinion in Lupu v. Loan City, LLC is available at:  Link to Opinion. A Pennsylvania borrower refinanced his home loan and mortgage with a lender.  The loan transferred several times finally ending up with the current holder.  A title insurer provided title…

4th Cir. Holds HPA Does Not Require LPMI Disclosures If LPMI Not Required at Closing

The U.S. Court of Appeals for the Fourth Circuit recently concluded that lender-paid mortgage insurance (“LPMI”) disclosures under the federal Homeowners Protection Act are only required if LPMI is a condition of the borrower obtaining the loan. In affirming the trial court’s dismissal of the borrowers’ claims, the Fourth Circuit dissected the specific language of the provision in the HPA addressing disclosures related to mortgage insurance, 12 U.S.C. § 4905.  Specifically, the Fourth Circuit determined that the disclosures are only required if LPMI is a condition of the loan at the time of closing. In this case, the lender did not…

SD Fla. Rejects Borrower’s Effort to Exclude Evidence of Reasonableness of Lender-Placed Insurance Premiums

The U.S. District Court for the Southern District of Florida recently denied a borrower’s motion to exclude testimony of an insurer’s expert regarding the reasonableness of lender-placed insurance premiums levied upon the borrower’s mortgage loan. In so doing, the Court rejected the borrower’s argument that the expert testimony failed to address claims that the insurer colluded with its mortgage servicer to inflate insurance premiums, concluding that the borrower’s objection goes to the weight, rather than the admissibility of the testimony, and that testimony concerning the insurer’s compliance with applicable rules, regulations and industry standards would assist the trier in fact.…

10th Cir. Rules TCPA Action Not Covered by Insurance Under Colorado Law

The U.S. Court of Appeals for the Tenth Circuit recently affirmed summary judgment in favor of an insurance company, holding that the insurer had no duty to defend and indemnify its insured in a lawsuit alleging that the provider’s telemarketing phone calls violated several federal and state laws, because statutory damages and injunctive relief under the Telephone Consumer Protection Act (TCPA) are uninsurable penalties — not damages — under Colorado law and the insurance policies at issue. A copy of the opinion in ACE American Insurance Company v. Dish Network is available at:  Link to Opinion. The federal government and five…