HNRK Coverage Corner

On August 15, 2019, Justice Perry of the New York County Supreme Court issued a decision in Villas of Ocean Dunes Assn., Inc. v. First Specialty Ins. Corp., 2019 NY Slip Op 32435(U), denying an insured’s petition to compel an excess insurer to submit a disputed property damage claim to appraisal under an appraisal provision in the primary policy.

The insured in Villas of Ocean Dunes was a condominium in Florida that suffered damage during Hurricane Irma.  The condominium had two insurance policies covering property damage:  a primary policy issued by Westchester Surplus Lines ...

On May 29, 2019, Justice Crane of the New York County Supreme Court issued a decision in Continental Cas. Co. v KB Ins. Co., Ltd., 2019 NY Slip Op 31513(U), holding that an exclusion for “Knowing Acts” did not excuse a CGL carrier’s duty to defend Lanham Act claims against the insured. In the underlying litigation, the insured, Value Wholesale, Inc. (Value), was sued by the patent holder for FreeStyle blood glucose test strips for allegedly selling imported test strips not authorized for sale in the United States and selling them in FreeStyle product boxes. The action asserted ...

On April 25, 2019, Justice Sherwood of the New York County Commercial Division issued a decision in Westchester Fire Ins. Co. v. Schorsch, 2019 NY Slip Op 31188(U), holding that a D&O policy's “insured versus insured” exclusion did not preclude coverage for claims against corporate officers by a Creditor Trust. In Schorsch, corporate officers sought coverage under the corporation’s D&O policies for claims brought against them by a Creditor Trust set up in the corporation’s Chapter 11 bankruptcy proceedings.  Two of the excess insurers disclaimed coverage based on an ...

On April 3, 2019, the Second Circuit issued a decision in Milligan v. CCC Information Servs. Inc., Dkt. Nos. 18-1405-cv, 18-1407-cv, holding that the appraisal procedure in a property insurance policy could not be used to resolve legal questions regarding the interpretation of the policy, but only to determine the amount of the covered loss.

Milligan is a putative class action, alleging that GEICO “violated Regulation 64, a New York State insurance regulation,” incorporated into the Policy, “which requires an insurer, in the case of a total loss of a current model year ...

On March 28, 2019, Judge Crotty of the SDNY issued a decision in Federal Ins. Co. v. Weinstein, Case No. 18 Civ. 2526 (PAC), granting an insured’s motion to stay a coverage action on the issue of the insurer’s duty to indemnify, pending the resolution of underlying civil and criminal proceedings against the insured, but denying the stay motion as to the duty to defend.

This coverage action arose from the numerous civil and criminal actions (some eighteen in total) against Hollywood producer Harvey Weinstein.  Chubb commenced the action seeking a declaration that it is not obligated ...