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Posted in Duty to Defend

On November 14, 2023, the Supreme Court of Hawaii issued a decision in St. Paul Fire & Marine Ins. Co. v. Bodell Construction Co., Case No. SCCQ-22-0000658, holding that insurers may not recoup defense costs for non-covered claims absent an express policy provision for reimbursement. 

Answering a certified question from the United States District Court for the District of Hawaii, the Court explained:

The duty to defend is broader than the duty to indemnify.  An insurer only indemnifies covered claims.  But an insurer must defend when there is possible coverage, even “groundless ...

In orders issued last week, a panel of the Ninth Circuit and a federal district judge in Hawaii certified questions to the Supreme Courts of Alaska and Hawaii regarding the scope of a liability policy’s “absolute” or “total” pollution exclusion.  The state high courts will address whether carbon monoxide and carbon dioxide constitute “pollutants” under such an exclusion. 

Ninth Circuit Order – Is Carbon Monoxide a Pollutant Under a Homeowners Policy?

The Ninth Circuit’s order in Estate of Wheeler v. Garrison Property & Casualty Ins. Co., No. 22-35484, issued on ...

Posted in D&O Policies

On August 10, 2023, Judge Rennie of the Superior Court of Delaware issued a decision in a pair of cases, Viacom Inc. v. Paramount Global, C.A. N22C-06-016 SKR CCLD and Redstone v. ACE American Insurance Co., C.A. No. N22C-06-020 SKR CCLD, ruling that a D&O policy’s “bump-up” exclusion did not apply to losses arising from a merger transaction.

The coverage dispute arose from a 2019 transaction through which Viacom merged with CBS.  As a result of the all-stock transaction, “all assets of Viacom ‘vest[ed] in CBS, and CBS was the surviving corporation.”  Shareholders ...

Posted in Duty to Defend

On July 13, 2023, the Eleventh Circuit issued a decision in Continental Casualty Co. v. Winder Laboratories, LLC, Case No. 21-11758, resolving an issue of first impression under Georgia law—whether an insurer can recoup defense costs it paid under a duty to defend policy upon a finding that the insurer has no duty to indemnify the insured.  The Court ruled that such recoupment is not permitted unless the policy expressly provides for it, explaining:   

As an initial matter, we disagree with the insurers’ argument that there is a clear “majority” rule favoring recoupment across ...

On June 13, 2023, the Sixth Circuit issued a decision in Admiral Ins. Co. v. Fire-Dex, LLC, Case No. 22-3922, affirming a district court’s order declining to exercise jurisdiction over an insurer’s declaratory judgment action on the ground that the action turned on a “novel issue of Ohio insurance law” that should be resolved by the Ohio state courts.

At issue in Fire-Dex was whether illnesses arising from exposure to PFAS—so-called “forever chemicals”—in a manufacturer’s finished products constitute an “occupational disease” under Ohio law.  The Sixth ...

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