About United Policyholders United Policyholders (UP) Is a Voice and an Informa- Tion Resource for Insurance Consumers in All 50 States

Introduction

About United Policyholders United Policyholders (UP) is a voice and an information resource for insurance consumers in all 50 states. Founded in 1991, UP is non-profit and tax-exempt. Sup- port for our work comes from grants, book sales and do- nations from individuals, professionals and businesses. UP does not accept funding from insurance companies. Our work is divided into three program areas:

Advocacy and Action: Fighting for policyholders’ rights and advancing the interests of insurance consum- Amy Bach thanking Eugene ers in courts of law, before regulators, legislators and in Anderson for his support at UP’s the media. 10th Anniversary celebration. Roadmap to Recovery: Helping individuals and businesses understand their rights and options during the insurance claim/loss recovery process. A Brief History of the Roadmap to Preparedness: Promoting insurance UP Amicus Project literacy and personal financial preparedness through The United Policyholders Amicus Project helps lessons learned after natural disasters. preserve and enforce insurance promises – large and small – because lives and livelihoods depend on Individual and business consumers, journalists, public them. In state and federal appellate courts and in the officials and regulators seek information and input nation’s highest court, we advocate for insureds on daily from United Policyholders. The organization’s the full range of issues (from unfair claim denials to Executive Director is an official consumer representa- deceptive sales practices to improper exclusions) and tive to the National Association of Insurance Com- the full range of products (including but not limited missioners, and currently serves on the American Law to individual and group disability, health, life, long Institute’s Advisory Panel on the Principles of Liability term care and homeowner policies, commercial Insurance. The insurance law experts on UP’s Board of general liability, directors and officers and business Directors include the former Chief Justice of the Ari- owners’ policies). zona Supreme Court, a Mississippi State Senator, the former Insurance Commissioner of Washington State We weigh in on exclusions: pollution, advertising inju- and several prominent policyholder attorneys. ry, intentional acts, mold, water damage, anti-concurrent causation. We weigh in on definitions: occurrence, UP’s online library of claim and buying tips, sample accident, insured location. We weigh in on duties: fair forms, articles, links and reports draws thousands of and thorough investigation, equal consideration to the readers each month. Thanks to our generous donors financial interests of the insured, the duty to defend and volunteers, UP distributes free copies of The and indemnify…just to name a few. We weigh in on Disaster Recovery Handbook and Household Inven- standards for the recovery of economic, non-economic tory Guide to disaster survivors throughout the United and punitive damages. States. As a non-party with a broad perspective and national direct contact with real-life insurance transactions, UP helps focus courts’ attention on the larger issues at stake. No meritorious case is too large or too small for the UP Amicus Project.

United Policyholders Amicus Project Report 1 Introduction

We are honored and fortunate to be associated with an ever-growing team of volunteer brief writers and we are deeply grateful for the contributions they make toward helping us advance policyholders’ interests.

From 1995 until his death in 2010, Eugene Anderson of Anderson, Kill & Olick was the primary moving force behind the UP Amicus Project. Often referred to as the “Dean of Policyholder Attorneys,” Gene was a highly skilled and passionate insurance consumer Stanley Feldman joined the UP Board advocate who personally drafted more than 75 amicus of Directors in 2007 and brought over briefs for UP pro bono and encouraged his colleagues 20 years of experience as an Arizona to do the same. He kept UP apprised of new cases and Supreme Court Justice. marketplace developments impacting policyholders, and was extremely generous in devoting his firm’s resources to the UP Amicus Project. United Policyholders has filed over 300 amicus briefs Numerous other Anderson Kill & Olick attorneys have to date in a wide range of important cases impact- written or helped write a substantial number of the ing policyholders’ rights and insurers’ duties. UP’s briefs we have filed. The firm dedicates an extraordi- arguments have been adopted expressly and implicitly nary amount of pro bono attorney hours to preparing by the U.S. Supreme Court and many other courts. amicus briefs for United Policyholders each year and Numerous courts have specifically invited UP to has inspired other firms to follow its lead. brief certified questions as amicus curiae. When ap- propriate, UP is a co-amici with trade associations, Because of their genuine dedication to serving their government entities and other non-profits. Examples clients and advancing policyholders interests across the include AARP, Consumer Federation of America, the board, Gene Anderson and his colleagues at Anderson National Electrical Manufacturer’s Association, the Kill & Olick introduced UP to countless other firms, American Institute of Architects, and the California legal scholars, professors and sources of data. By so Industry Association. doing, Gene and Anderson Kill & Olick helped build the United Policyholders’ Amicus Project’s influence Our first brief was prepared in 1992 to educate a on courts throughout the United States. California Appellate Court on why property policies that purport to cover dwelling “replacement” should The Value of UP cover legally required (building code) upgrades. It was written by Amy Bach, who oversaw the UP Amicus as Amicus Curiae Project as a volunteer for 13 years before becoming The business of insurance is infused with a public the organization’s full time Executive Director. She purpose because insurance is a modern-day economic continues to manage the project today with help from necessity. It enables anyone from an individual to a a corps of experienced and dedicated policyholder multi-national corporation to plan for financial protec- advocate volunteers. tion against the risk inherent in living and conducting business in a complex society. It promotes peace of All of United Policyholders’ amicus curiae briefs are mind, instilled by a sense of certainty and predictabil- prepared and filed by experienced attorneys who spe- ity, which enables us as a society to plan and progress. cialize in insurance and/or appellate law. Volunteers Because policies are legal contracts, and insurers are and advisors to United Policyholders have prepared regulated entities, insurance is a very active area of and filed pro bono 99% of the organization’s briefs. law with a high volume of cases affecting the public

2 Amicus Project Report United Policyholder Introduction

interest being litigated throughout the United States at state and frequently participates in oral argument of any given time. particularly significant cases by invitation. The Asso- ciation is only one of hundreds of insurer entities that A brief amicus curiae is one that is presented to a court routinely file amicus briefs. In the majority of cases, by a person or an organization that is not a party to a judges get no briefs at all that advance the perspective case the court is considering. Amicus briefs become of insureds or insurance consumers. Predictably, the part of the “record” the court reads and considers be- results often favor the insurance industry. UP is chang- fore rendering a decision. Published judicial decisions ing this imbalance through our Amicus Project. (“decisional law”) and enacted statutes (“statutory law”) define insurance consumers’ rights and insurance United Policyholders works in individual states with companies’ obligations. Decisional law is critically regulators at the National Association of Insurance important and has long-lasting impact on the market- Commissioners and we provide loss recovery support place and consumer transactions. to citizens through our Roadmap to Recovery program. This work enhances our legitimacy as a true friend The classic role of amicus curiae is to assist in a case to courts, particularly when we file a brief in a state of general public interest, supplement the efforts of where we have sent staff or volunteers after a disaster. counsel, and draw the Courts attention to law that es- caped consideration (Miller-Wohl Co. v. Commissioner Laws and practicality require that people and businesses of Labor & Indus. 694 F.2d 203, 204 (9th Cir. 1982)). buy insurance to protect real and personal property as Commentators have often stressed that an amicus is in well as business and individual income. Insurance con- a superior position to “focus the court’s attention on tracts and relationships are complex. Interpreting policies the broad implications of various possible rulings.” R. and navigating the claim process requires specialized Stern, E. Greggman & S. Shapiro, Supreme Court Prac- skills. It is an economic fact that because insurance tice, 570-71 (1986) (quoting Ennis, Effective Amicus companies (like all businesses) seek to be as profitable as Briefs, 33 Cath. U.L.Rev. 603, 608 (1984)). possible, they have natural financial incentives to deny and underpay claims. All these factors make United Poli- Insurers and their trade associations routinely deluge cyholders’ educational, amicus, watchdog, and advocacy courts with briefs arguing their views. For example, the roles critically important and necessary. Complex Insurance Claims Litigation Association (for- merly the Insurance Environmental Litigation Associa- Please visit www.uphelp.org and subscribe to our tion) is a group of the largest commercial U.S. insurers newsletters to stay abreast of our work and new briefs that appears as amicus curiae in coverage and claims as we file them. practice cases at the appellate level in almost every

United Policyholders Amicus Project Report 3 Amicus Project Volunteers

The following are the attorneys who have drafted briefs on behalf of United Policyholders. With only a few exceptions, every brief was written entirely pro bono. The names of attorneys who have prepared numerous briefs are in bold:

David L. Abney Douglas K. DeVries Craig M. Hirsch Carrie Maylor-DiCanio Seth B. Schafler Krista M. Abrahams Joseph P. Dougher David M. Hoffman C. Douglas Maynard, Jr. Matthew J. Schlesinger Han J. Ahn Ellen Doyle John Hoglund Jason S. Mazer Bradley J. Schram Howard L. Andari Stephen A. Dvorkin Robert M. Horkovich Darin J. McMullen Kenneth L. Seiler Eugene R. Anderson Larry D. Dyess Jane A. Horne M. Austin Mehr Claudia J. Serviss Stephen D. Apolinsky Jeffrey Isaac Ehrlich Amy Howe Efrat Menachemi Duane W. Shewaga Sharon J. Arkin Richard A. Ejzak Christine P. Hsu William F. “Chip” Mark D. Silverschotz Jill N. Averett Bennett Ellenbogen Nicolas N. Insua Merlin, Jr. Micah Skidmore Amy Bach N. Frank Elliot III Idan Ivri Thomas C. Mielenhausen Steven L. Snyder Donald J. Baier John N. Ellison Denise Jarman Brian M. Miles Jordan S. Stanzler Suzanne Havens Beckman L. Steven Emmert Benjamin A. Kahn Chipman Miles Perry Staub, Jr. Michael E. Berman Shruti D. Engstrom Steven P. Kaiser David V. Miller Charles L. Stern, Jr. Bernie Bernheim Laurie B. Epstein John H. Kazanjian Richard D. Milone Steven B. Stevens John Berringer Lee M. Epstein Mary Kestenbaum D. Scott Mohney Charles A. Stewart, III Timothy R. Beyer Stanley G. Feldman Fortson Deborah M. Mongan James C. Sturdevant Michael J. Bidart Robert C. Fellmeth Alan G.B. Kim, Jr. Steven W. Murray Stephanie A. Sullins Lauren Bisordi Lawrence S. Fischer Jeremy King John G. Nevius C. William Tanzi Mike Breen Eric C. Fleetham Paul G. Kent Daniel J. O’Friel Denise Y. Tataryn G. David Brumfield James J. Fournier Paul W. Kissinger Roger O’Sullivan Darren S. Teshima Randall C. Brummitt Robert E. Frankel Whitman G. S. Knapp Rhonda D. Orin C. Alexander Teu Barbara Burstein Casandra Franklin Evan T. Knott Mark A. Packman Calvin C. Thur E. Andre Busald Jocelyn A. Gabrynowicz David A. Kochman David A. Paige Jeffrey I. Tilden Kim E. Card Michele A. Gallagher Daniel J. Koes David Parisi Richard T. Treon Drew A. Carson Mark Garbowski Sarah H. Kostura Kirk A. Pasich Deborah Trotter Robert L. Carter David A. Gauntlett Marc Ladd William G. Passannante Lorena Trujillo Andrew N. Chang Timothy E. Geertz Timothy P. Law Wm. Scott Patterson Harold B. Klite Truppman Brian D. Chenoweth Jean F. Gerbini Lori E. Lee Susan G. Papano John L. Tully Robert Y. Chung Robert S. Gerstein Amanda M. Leffler Robert F. Pawlowski Scott C. Turner Whitney D. Clymer Pamela Gilbert Barry S. Levin Richard Payne Cathleen Cinella Tylis Jonathan M. Cohen Richard Giller Arnold R. Levinson Michelle Perez Steven D. Urgo Terrance J. Coleman Stephen N. Goldberg Joan L. Lewis Bryan W. Petrilla Brian T. Valery Michael Conley Thomas C. Goldstein Richard P. Lewis James Plummer G. Andrew Veazey W. James Cousins, Jr. David B. Goodwin James T. Linford David J. Poirier Brenton N. Ver Ploeg Gordon M. Cowan Tylvester O. Goss Nancy B. Lipin Michael N. Poli Jennifer Best Vickers L. Norton Cutler Tara A. Griffin Eric R. Little William Powers John S. Vishneski James D’Antonio Christine A. Gudaitis James A. Lowe Drew Ranier Paul Walker-Bright Filomena D’Elia Michael S. Gurland R. Hugh Lumpkin Toki Rehder Irene C. Warshauer Matthew R. Danahy Joshua H. Haffner Sallie Conley Lux Todd D. Robichaud Steven J. Weiss James M. Davis Greg Hansen John A. Macdonald David Roland Joel M. Westerbrook Mark D. DeBofsky Finley T. Harckham Michael D. Madigan Andrew M. Roman Kenneth Willis Anthony DeMarco Alex D. Hardiman Michael R. Magaril Paul A. Rose Timothy C. Wilson Johnny Denenea Lee S. Harris Jean Magladry Matthew D. Rosso John P. Winsbro Ron Dean Daniel J. Healy Cort T. Malone Christopher A. Rycewicz Alice J. Wolfson Charles M. Denton II Randy M. Hess Raymond A. Mascia Jr. Robert K. Scott Nicholas J. Zoogman Paul A. Desrochers Brittany Hillman Lorelie S. Masters Eli L. Samet

Eugene Anderson, a moving force behind UP’s Amicus Project.

4 Amicus Project Report United Policyholders Amicus Curiae Briefs

The following, in chronological to choose how to allocate losses order, are United Policyhold- among multiple policies. ers Amicus Curiae Briefs filed between 1992 and the publication Larsen Oil Company v. of this report in July, 2011. Federated Service Insurance Company, (1995, Oregon), Case No. 94-35891, United States Bischel v. Fire Insurance Court of Appeals, 9th Circuit. Exchange, (1992, California), 1 Cal. App. 4th 1168, Court of Issue: Enforceability of an “absolute” pollution exclu- Appeal, Fourth Appellate District, “Insurance litigation sion. UP weighed in as an amici Division 1, California. has a direct impact on the policyholder side while the Issue: Coverage for upon the consumers we insurer’s position was support- grades mandated by build- serve and the claims ed by the “Insurance Environ- ing codes. UP’s first amicus that affect their lives mental Litigation Association” brief was filed in support of a and livelihoods. Our policyholder whose insurance comprised of Aetna Casualty & amicus work is integral Surety Co., Allstate Insurance company sold him a replace- to our ability to help ment cost policy but refused to Co., AIG Insurance Companies, policyholders all across American States Ins. Companies, pay for the cost of repairing his the United States.” property in compliance with lo- Chubb & Sons, CIGNA Property – Amy Bach, Esq., cal building codes. & Casualty Companies, Con- Executive Director of tinental Insurance Companies, International Recovery UP, Amicus Project Envision Claims Management Corporation v. National Union Coordinator Corp., Fireman’s Fund Insurance Fire Insurance Company of Companies, Hanover Insurance Pittsburgh, PA, (1995, Florida), Company, Hartford Insurance Case No. 95-1852, Florida Third Group, Home Ins. Co., Liberty District Court of Appeal. nonresident insured of an in- Mutual, Maryland Ins. Group, Issue: Pollution exclusion. solvent insurer was entitled to Prudential Re, Royal Ins. Co., St. UP’s second ever amicus brief indemnity from the Massachu- Paul Companies, Selective Ins. called the Court’s attention to setts Insurers Insolvency Fund Cos, State Farm Fire & Casualty, coverage positions being as- (Fund) for the costs of defending Travelers, USF&G and Zurich- serted by an insurer that contra- and settling tort claims asserted American Ins. Group. dicted representations that had against the insured by Massa- been made to regulators to se- chusetts residents. Gamble Farm Inn, Inc. v. cure approval of the exclusion- Selective Insurance Company, Stonewall Insurance ary language. (1995, Pennsylvania), Case No. Company v. Asbestos Claims 92-01485, Court of Common Management Corporation, Clark Equip. Co. v. Pleas, Lycoming County, (1995, New York), 85 F.3d 49, Massachusetts Insurers Pennsylvania. United States Court of Appeals, Insolvency Fund, (1995, Issue: Duty of good faith and 2nd Circuit. Massachusetts), 666 N.E.2d fair dealing. UP argued that an Issue: Pro-rata allocation; 1304, Supreme Judicial Court of insured should have a reasonable quasi-estoppel. UP challenged Massachusetts. expectation that the third party inconsistent positions taken by Issue: Insured’s right to sub- administrator (TPA) administer- insurers before regulators with mit claims to an insolvency ing a claim has an obligation to regard to policyholders’ ability fund. At issue was whether the act in good faith and deal fairly.

United Policyholders Amicus Project Report 5 Amicus Curiae Briefs

Engalla, Nida v. The Permanente West American Insurance Estoppel; inconsistent coverage Medical Group, Inc., (1996, Company v. Mark R. Freeman, positions; public policy; clean- California), Case No. S048811, (1996, California), Case No. up costs as damages. California Supreme Court. S049306, California Supreme Issue: Mandatory arbitration Court. Iowa Comprehensive Petroleum clause in an HMO policy. UP Issue: Duty of good faith and Underground Storage Tank challenged the fairness of an fair dealing. Insurance Com- Fund Board v. American States HMO’s mandatory provision in pany’s duty of good faith and Insurance Company, (1996, a contract of adhesion that re- fair dealing with its policyholder Iowa), Case No. 96-510, Supreme quired policyholders to submit should continue into litigation Court of Iowa. claim disputes to a private ar- and should not be limited to the Issue: Pollution exclusion. bitration system over which the circumstances surrounding the HMO had undue control. insurance coverage litigation. Advance Watch Company, LTD v. Kemper National Insurance Lebas Fashion Imports of Wixon v. Amica Mutual Company, (1996, Michigan), USA v. ITT Hartford Insurance Insurance Company, (1996, Case No. 95-1367/1387, Court of Group, (1996, California), Case California), Case No. A068078, Appeals, 6th Circuit, Michigan. No. B083983, Court of Appeal, Court of Appeal, First District, Issue: Trademark infringe- 2nd Appellate District, Division 3, Division 2, California. ment; advertising injury. California. Issue: Deductible. Calculation Trademark infringement claims Issue: Advertising injury; of deductible in an earthquake should be covered under standard quasi-estoppel. claim. form advertising injury policy.

Richards, Alan v. Lloyds of Benoy Motor Sales, Inc. Fluoroware, Inc. v. Chubb London, (1996, California), Case v. Universal Underwriters Group of Insurance Companies, Nos. 95-55747 and 95-56467, Insurance Company, (1996, (1996, Minnesota), 545 N.W.2d United States Court of Appeals, Illinois), Case No. 1-96-0536, 678, Court of Appeals of 9th Circuit. Appellate Court of Illinois, First Minnesota. Issue: Forum selection; District, Fourth Division. Issue: Insurer withholding choice of law. Lloyds of Issue: Loss mitigation. In- information supporting cov- London should be judicially demnity v. Defense; PRP letters erage. Insurance companies estopped from asserting incon- as suits. should not be allowed to keep sistent positions with regard to information supporting cover- enforcement of forum selection Board of Education of age from the courts of their poli- and choice of law clauses. Township High School District cyholders. Depublication of pro- No. 211 v. International Ins. Co., policyholder decisions should (1996, Illinois), 720 N.E.2d 622, Waters v. United States not be condoned. Automobile Association, (1996, Appellate Court of Illinois, First California), Case No. S051883, District, Sixth Division. Issue: All risk policies. Stone, Jonathan and Roberta v. Supreme Court of California. Continental Insurance Company, Issue: Proof requirement Maremont Corporation v. (1996, New York), No. 95-11376 for emotional distress. Insur- Edward William Chesire, (1996, Supreme Court, Appellate Division, ers duties re: property damage 2nd Department, New York. claims and insureds’ right to Illinois), Case No. 1-96-0146, Appellate Court of Illinois, First Issue: Insurance nullification. recover for emotional distress UP addressed the fact that insur- caused by bad faith conduct. Judicial District, Third Division. Issue: Pollution exclusion. ance companies are quasi-fiducia-

6 Amicus Project Report United Policyholders Amicus Curiae Briefs

ries and should not be permitted to California law an insurer has a engage in post-loss underwriting. duty to defend the entire case as long as there is a potential for Town of Harrison and Village of coverage of even one claim. In- Harrison v. National Union Fire surer can request an allocation of Insurance Co. Pittsburgh, PA, costs after defense is complete. (1996, New York), 653 N.Y.S.2d 75, Court of Appeals of New York. Downey Venture, The v. LMI Issue: Pollution exclusion. Insurance Company, (1997, Fiduciary duty; duty of good “UP’s amicus project California), Case No. B106304, faith and fair dealing is invaluable because it Court of Appeals, 2nd Appellate provides a consumer’s District, Division 3, California. Round Rock Plaza Venture and Issue: Duty to defend. voice to appellate courts Robert Tiemann v. Maryland considering insurance Ins. Co., (1996, Texas), Case No. Foster-Gardner, Inc. v. National issues - a voice they 03-95-00108-CV, Texas Court of Union Fire Insurance Company Appeals, 3rd District, at Austin. hear from no other of Pittsburgh, PA, (1997, Issue: Pollution exclusion. organization. It is critical California), Court of Appeal, that the courts realize Second Appellate District, Trinity Universal Insurance and recognize that there Division 2, California. Company v. Nicole Cowan, are real people, with real Issue: Pollution exclusion; (1996, Texas), Case No. 95-1160, lives, behind the case PRP letters as suits. Supreme Court of Texas. captions and UP makes Issue: Duty of good faith and sure that happens.” Kransco v. American Empire fair dealing; occurrence. UP – Sharon Arkin Surplus Lines Insurance reviewed “insurance lore” the Company, (1997, California), 23 duty of good faith and fair deal- Cal.4th 390, California Supreme ing and an insurance company’s Court. duty of candor. Issue: Comparative bad faith Baugh Construction Company not an affirmative defense. v. Granite State Insurance Monticello Insurance Company v. An insurance company can no Company, (1997, California), Baecher, (1996, Virginia), Case No. longer use the affirmative defense Case No. C023071, Court of 960193, Supreme Court of Virginia. of comparative bad faith to escape Appeal, Third Appellate District. Issue: Trigger of coverage; oc- liability for bad faith claims han- Issue: Duty of good faith and currence; pollution exclusion. dling practices. Although this is a fair dealing. Under New Jersey third party case, the reasoning has law, the obligation of good faith been applied to first party cases as Aerojet-General Corporation v. and fair dealing extends to the Transport Indemnity Insurance well. See Hale v. Provident Life assertion, settlement and litiga- Company, (1997, California), & Accident Insurance Co. (2003) tion of contract claims. Case No. S054501, 17 Cal.4th 38, Supreme Court of California. Dana Corp. v. Hartford Accident Buss v. Superior Court State Issue: Inconsistent coverage and Indemnity Co., et al., (1997, of California, County of Los positions; allocation. Insur- Indiana), Case No. 17171-6-II, Angeles, (1997, California), ance companies should not be Court of Appeals, Indiana. Case No. S052844, Supreme allowed to profit from inconsis- Issue: Environmental liabili- Court of California. tent coverage positions. ties. Issue: Duty to defend. Under

United Policyholders Amicus Project Report 7 Amicus Curiae Briefs

George, Albert, Pearl George, United States of America v. the Court of Appeals decision Karen Miller & Steven Jackson John Brennan, (1997, New holding that (1) insurance com- v. Guaranty National Insurance York), 183 F.3d 139, United pany acted in bad faith; (2) the Co., (1997, Kentucky), Case No. States Court of Appeals, 2nd insurance company failed to 96-SC-512-D, Supreme Court, Circuit. show the policyholders burned Kentucky. Issue: Duties of insureds. UP their own home and (3) punitive Issue: Fairly debatable stan- briefed the court on fiduciary damage award of two million dard. Insurance coverage; ref- duty; the purpose of insurance, was not excessive. ormation; bad faith; fiduciary the “sophisticated policyholder”; duty; attorney-client privilege- contra preferendum and the pub- Cook, Heidi Sue v. American standard of review. lic service nature of insurance. States Insurance Company, (1997, Washington), Case No. Western Alliance Insurance Fleming v. USAA, (1997, 35941-0-1, Washington Supreme Company v. Jarnail Singh Gill, Oregon), Case No. S44805, Court. (1997, Massachusetts), Case No. Supreme Court of Oregon. Issue: Pollution exclusion. SJC-07506, Supreme Judicial Issue: Pollution exclusion. UP Court of Massachusetts. filed a petition supporting review TIG Insurance Company v. Gary Issue: Pollution exclusion; urging that the key definition of Smolker, (1998, California), IELA. “pollutants” employed in the Case No. BC173952, Superior subject insurance policies was so Court of California, County of Cello-Foil Products, Inc. v. overbroad it was meaningless. Los Angeles. Michigan Mutual Liability Issue: Duty of good faith and Company, (1997, Michigan), Groshong, Joel C., Huth, Joann fair dealing. Case Nos. 104107, 105981, and Huth, Gary v. Mutual 106678, Michigan Supreme Enumclaw Insurance Company, Truck Insurance Exchange v. Court. (1997, Oregon), Case Nos. SC Superior Court of California Issue: First manifest; en- S43912, CA A89325, CC 9407- (1998, California), Case No. vironmental damage. In a 04901, Oregon Supreme Court. B117294, Court of Appeal, policy involving environmen- Issue: Doctrine of insurabil- Fourth Appellate District, tal damage which actually took ity; personal injury; occur- Division 1, California. place over many years and span- rence. Issue: Plain meaning as ordi- ning multiple insurance policy nary and popular meaning; periods, coverage should not Medallion Industries, Inc. v. legally obligate. be limited only to insurance Atlantic Mutual Insurance policies in effect at the time the Company, (1997, Oregon), No. Deni Associates of Florida v. property damage is discovered 97-35317, United States Court of State Farm, (1998, Florida), or “first manifests.” Appeals, 9th Circuit. Case No. 89115, Florida Supreme Issue: Doctrine of insurabil- Court. American Home Assurance ity; discrimination; accident. Issue: Ambiguity; pollution Company v. International exclusion; reasonable ex- Insurance Co & National State Farm Fire & Casualty pectations of coverage. Casualty Co., (1997, New York), Company v. James and Cynthia Case Nos. 12679/91, 20741/90, Simmons, (1997, Texas), Case No. Employers Insurance of Court of Appeals of New York. D-4095, Supreme Court of Texas. Wausau, A Mutual Company Issue: Late notice; notice Issue: Punitive damages; v. City of Waukegan, Illinois, prejudice rule. burden of proof. UP supports (1998, Illinois), Case Nos. 2-97-

8 Amicus Project Report United Policyholders Amicus Curiae Briefs

0606, 2-97-0901, Appellate Court In re Salem Suede, Inc., In of Illinois, Second District. re Zion Realty Corp., (1998, Issue: Duty to defend. The Massachusetts), 219 B.R. 922, duty to defend should be deter- United States Bankruptcy Court, mined solely from the allega- District of Massachusetts. tions appearing on the face of Issue: Insurer’s statutory li- the complaint. In determining abilities. Insurance companies whether or not the insurance that have violated their indepen- company has the duty to defend, dent duty of good faith and fair the trial court cannot examine “The insurance product dealing to innocent injured third party claimants cannot be al- testimony, depositions, affida- is not made in the vits or other documents. lowed to misuse the bankruptcy the Courtroom. The process to escape potential stat- United Policyholder’s Cincinnati Insurance Company, utory liability to third parties. Amicus Project Inc. v. David J. And Marcia affords a significant Wills, (1998, Indiana), Case No. Farmington Casualty Company 79S00-9808-CV-458, Indiana opportunity to bring v. Cyberlogic Technologies, Supreme Court. different considerations Inc., (1998, Michigan), Case No. Issue: Conflict of interest. of insurance before 98-1611, United States Court of Insurers should not be allowed jurists so a better Appeals, 6th Circuit. to use in-house employee-attor- decision can be made. Issue: The meaning of “aris- neys to defend policyholder cli- My late friend, Eugene ing out of” in an advertising ents because the inherent conflict Anderson, always injury claim. of interest robs the policyholder talked about the of the right to a vigorous, inde- importance of judges First State Insurance Company v. Minnesota Mining pendent and zealous defense. understanding “the Manufacturing Company, (1998, lore” of insurance Minnesota), Case Nos. C4-97- Ducote, Sr., Craig v. Koch and not just insurance Pipeline Company, LLP, (1998, 1872, CO-97-2257, Minnesota law. It is the Merlin Supreme Court. Louisiana), Case No. 98-C-0942, Law Group’s honor to Supreme Court of Louisiana. Issue: Disappearing deci- participate in this very Issue: Pollution exclusion. sions; confidentiality orders. important service for Public policy requires that standard-form, industry-wide pol- United Policyholders.” Carter-Wallace, Inc. v. Admiral lution exclusions should be in- – William “Chip” Merlin Insurance Company, (1998, New terpreted narrowly so as not to Jersey), 712 A.2d 1116, Supreme yield overbroad and unintended Court of New Jersey. or absurd restrictions on insur- Issue: All sums; trigger of ance coverage. coverage; estoppel; joint & Foreign Car Center v. severe liability. Travelers Indemnity, (1998, Ieyoub, Richard P. v. The Massachusetts), Case No. 1:97- American Tobacco Company, Greenberg & Covitz v. National CV-12587, United States District Union Fire Insurance of (1998, Louisiana), Case No. Court, Massachusetts. 97-31222, United States Court of Pittsburgh, PA, (1998, New Jersey), Issue: Pollution exclusion; Supreme Court of New Jersey. Appeals, 5th Circuit. drafting history; expected or Issue: Arbitration. Issue: Waiver of defenses; intended. claims handling.

United Policyholders Amicus Project Report 9 Amicus Curiae Briefs

A-One Oil Company v. The Issue: Statute of limitations. Issue: CGL policies. A cover- Massachusetts Bay Insurance Statute of Limitations should age determination for property Company, (1998, New York), not be invoked to deny cover- damage losses depends on the 672 N.Y.S.2d 423, New York State age when the untimeliness of property itself and the nature of Court of Appeals. the claim was based on the in- the risk causing the injury. De- Issue: Pollution exclusion. surance company’s inadequate cision pertains to Commercial Insurance company should not investigation and misrepresenta- General Liability Policies be able to avoid its duty to de- tions regarding coverage. fend and indemnify based on a Hartford Casualty Insurance Co. pollution exclusion when dam- Payton, Dolores v. Aetna/US v. SCI Liquidating Corporation, age sustained was result of re- Healthcare, (1999, New York), (1999, Georgia), Case No. placement of an old heater in a Case No. 100440/99, Supreme S99Q15756, Supreme Court of private residence. Exclusion, as Court of the State of New York. Georgia. applied does not meet reason- Issue: Public service nature Issue: Umbrella coverage. able expectations of insured. of insurance. Tutorial for the The purpose of an umbrella gen- Court re: Insurance ethics; duty eral liability policy is to provide Mesa Operating Company v. of good faith and fair dealing; in- coverage above a (nominal re- California Union Insurance surance as a product; insurance tained limit) for claims deemed Company, (1998, Texas), Case companies as fiduciaries; public not to be covered by the under- No. 05-96-00986-CV, Texas service nature of insurance. lying CGL policies. Court of Appeals, 5th District. Issue: Pollution exclusion. Quan v. Truck Exchange, (1999, U.S. Test, Inc. and Bobby Cobb The evidence presented sup- California), Case No. 5071510, v. N.D.E. Environmental Corp ports the conclusion that the California Appellate Court. and United Coastal Insurance, insurance industry represented Issue: Duty to defend. (1999, Louisiana), 196 F.3d 1376, that the State Board of Insurance United States Court of Appeals understood the “sudden and ac- St. Joe Minerals Corporation for the Federal Circuit. cidental” pollution exclusion did v. Zurich Insurance, (1999, Issue: Advertising injury; not reduce existing coverage for California), Case No. G018280, patent infringement. Ad- pollution damages that were nei- Court of Appeal, Fourth Appellate dresses the scope of “advertis- ther expected nor intended. District, Division 3, California. ing injury” coverage for induce- Issue: Damages; duty to de- ments to infringe a patent in light American Games, Inc. v. Trade fend. of 28 U.S.C. section 271(a). The Products, Inc., (1998, Washington), Court erred in relying on the ab- Case No. 97-35275, United States Unigard Insurance Co. v. The sence of the word “patent” with Court of Appeals, 9th Circuit. City of Lodi, California, et al., the offenses of “infringement Issue: Vacatur. UP challenged (1999, California), Case No. of copyright, title, or slogan” to insurance companies’ use of va- 99-15802, United States Court of exclude coverage for an induce- catur to wipe out decisions and Appeals, 9th Circuit. ment to infringe a patent claim privately engineer the common Issue: Fiduciary duties of in- arising under the code section law in their favor. surers. which is based on the insured’s advertising activities. Kuwahara v. 20th Century Vandenberg, John B. v. Superior Insurance, (1999, California), Court, State of California, (1999, Callas Enterprises v. Travelers Case No. S083217, California California), 21 Cal.4th 815, Indemnity Company of Supreme Court. California Supreme Court. America, (1999, Minnesota),

10 Amicus Project Report United Policyholders Amicus Curiae Briefs

Case No. 98-3802, United States Kent Farms, Inc. v. Zurich Court of Appeals, 8th District. Insurance Company, (1999, Issue: Duty to defend. Insur- “A well-written and Washington), Case No. 67635-6 ers are obligated to pay defense objective amicus brief Washington Supreme Court. costs in a complaint where dis- is an invaluable tool Issue: Interpretation of cov- tinct claims for an intellectual with which to enlighten erage. Insurance companies property tort is alleged along judges about the cannot abrogate their insurance with a breach of contract claim. rights and needs of policies by applying in practice a more restrictive interpretation consumers.” of coverage than what was rep- Labarre, Ann M. et al v. Credit – Stanley Feldman Acceptance Corporation, (1999, resented to the insurance com- Minnesota), Case No. 98-3097, missioners in order to obtain United States Court of Appeals, approval of the language of the 8th Circuit. policy and associated premiums. Issue: RICO. RICO assists and Issue: “Known loss” stan- does not impair the stats in their dard versus proof of fraud Mathis v. State Farm Mutual battles against insurance compa- in application. Pennsylvania Automobile Insurance ny fraud. RICO does not conflict should require proof of fraud on Company, (1999, Washington), with Minnesota’s regulatory an application for insurance by Case No. 98-36001, United States system. Policyholders must be clear and convincing evidence Court of Appeals, 9th Circuit. allowed to pursue all other non-I and should not adopt a “known Issue: Employee termina- insurance common law and stat- loss” standard which drastically tion for refusing to engage utory remedies. lowers the insurer’s burden. in bad faith behavior. Court should unequivocally declare St. Paul Fire & Marine v. Texas Assoc. of Counties that the termination of an in- McCormik & Baxter Creosoting Government Risk Management surance company employee for Company, (1999, Oregon), Case Pool v. Matagorda County, refusal to engage in bad faith No. 541584, Supreme Court of (1999, Texas), Case No. 98-0968 conduct contravenes a clear Oregon. Supreme Court of Texas. mandate of public policy and Issue: Pollution exclusion; Issue: Texas Court should subjects the insurance company extrinsic evidence. not adopt the holding of employer to liability in tort for Buss. The Texas Court should wrongful discharge. not adopt the anti-policyholder Consulting Engineers, Incorporated v. Insurance holdings of Buss v. Transamer- Strandley v. CNA Ins. Co., (1999, Company of North America, ica Co. 939 P.2d 766 (1977) and Washington), 137 Wn.2d 1030, (1999, Pennsylvania), Case should not be swayed by insur- Washington Supreme Court. No. 0017 E.D., Supreme Court, ance company argument that the Issue: Statute of limitations; Eastern Division, Pennsylvania. holding is sweeping the country. pooling. Issue: Trigger of coverage; public policy. Humana Inc. and Humana State of Wyoming v. Federated Health Insurance of Nevada, Inc. Services Insurance, (1999, Rohm and Haas Company v. v. Mary Forsyth, (1999, United Wyoming), Case No. 98-8096, Continental Casualty Company, States), 525 US 299, Supreme United States Court of Appeals, (1999, Pennsylvania), 781 Court of the United States. 10th Circuit. A.2d 1172, Supreme Court of Issue: RICO; unfair trade Issue: Standing; direct ac- Pennsylvania. practices. tion on statute.

United Policyholders Amicus Project Report 11 Amicus Curiae Briefs

Haisch, Elizabeth v. Allstate Issue: Duty to defend. UP Insurance Company, (2000, supports the position that the Arizona), Case No. CV-00-0272- duty to defend attaches as soon PR, Supreme Court of Arizona. as there is a possibility that the Issue: Med-pay coverage. An allegations of the complaint fall insurance company should not be within the coverage of the policy. allowed to sell med-pay coverage without informing insured that if Shapiro, Paul v. Berkshire Life they are covered by an HMO, the Insurance Company, (2000, New med-pay coverage is worthless. “We at Dickstein York), Case No. 99-7980, United Shapiro are honored States Court of Appeals, 2nd Zilisch, Kimberly K. v. State to serve as pro bono Circuit. Farm Mutual Automobile Issue: General Business Code counsel for United Insurance Company, (2000, section 349; attorney’s fees. Policyholders’ Amicus Arizona), Case No. CV-98-0535- Section 349 of the General Busi- Project and grateful for PR, Supreme Court of Arizona. ness Code makes it possible for Issue: Fairly debatable stan- the invaluable service it insurance companies to be com- dard. UP challenged the “fairly provides to insureds – pelled to pay the legal costs of debatable” standard as the stan- the opportunity to weigh policyholders who successfully dard to be used for determining in on significant and sue their insurance companies. It a bad faith denial of coverage. cutting edge insurance is very important that this section “Fairly debatable” is a standard coverage issues as of the business code be enforced that favors insurance companies. friends of the court.” fully and fairly. The policyholder – Cassandra Franklin should not be required to prove Dart Industries v. Commercial an extensive pattern of conduct Insurance Co., (2000, by the insurance company in or- California), 28 Cal.4th 1059, der to invoke Section 349. California Supreme Court. definition of sickness or any other language in the policy. Issue: Proof of coverage. Op- Birth Center v. St Paul posing a Court of Appeal Deci- Companies, Inc., (2000, sion, UP urged that insureds (in- Kazi, Zubair and Khatija Kazi v. Pennsylvania), Docket Nos. State Farm Fire and Casualty cluding holocaust victims) who 25, 26, 27 & 28 M.D. Appeal, Company, (2000, California), 24 do not have copies of their origi- Supreme Court of Pennsylvania. Cal. 4th 871, California Supreme nal policies be allowed to offer Issue: Refusal to settle. Pay- Court. “secondary evidence” of lost ment of an excess verdict does Issue: Scope of property documents to prove the exis- not extinguish the insurer’s damages. An easement must be tence of the policies themselves. bad faith refusal to settle under considered tangible property and Pennsylvania law. injury there from must be cov- Galanty v. Paul Revere Life Ins. ered under “property damage.” Co., (2000, California), 23 Cal. 4th Lititz Mutual Insurance 368, California Supreme Court. Company v. Steely, (2000, Peerless Lighting Company v. Issue: Incontestability clause; Pennsylvania), Case No. American Motorists Ins. Co., “First Manifest.” The two year 00249 2000, Supreme Court of (2000, California), Case Nos. incontestability clause in a policy Pennsylvania, Middle District. A082975, A083487, A084373, cannot be contradicted by a “First Issue: Pollution exclusion. Manifest” provision under the Court of Appeal, First Appellate District, California.

12 Amicus Project Report United Policyholders Amicus Curiae Briefs

Sunbeam Corporation v. ing itself and assigning its liabil- Liberty Mutual Insurance ities to another company without Company, (2000, Pennsylvania), first obtaining the consent of its Supreme Court of Pennsylvania. policyholders. Issue: Pollution exclusion; estoppel; insured’s reasonable Anderson, Thomas v. Allstate expectations of coverage. Insurance Company, (2001, California), Case No. 01-15145, Jones, Janet and Terry v. Allstate United States Court of Appeals, Insurance Co et al., (2000, “We live in a nation in 9th Circuit, California. Washington), Case No. 46005-6-1, which insurance provides Issue: Mold. Insurer cannot Washington Supreme Court. a basic social safety use toxic mold protection act to Issue: Conflicts of interest. shield itself from bad faith li- net for the majority of Allstate cannot be allowed to ability in a claim regarding re- ordinary consumers. deceive policyholders and third mediation of mold. party claimants by failing to The existence, or lack, of coverage can have inform them they may be in an Basich v. Allstate Ins. Co. et enormous consequences adversarial position with the in- al., (2001, California), Case surance company and that the for the insured as well No. B132634, Court of Appeal, insurance company has no obli- as his or her family. The Second Appellate District, gation to protect the victim. UP Amicus Project plays Division 3. an important role in Issue: Statue of limitations; Liristis, Carla et al v. American assisting those ordinary equitable estoppel. Family Mutual Insurance Co., consumers to obtain the (2001, Arizona), Case No. CV benefit of their bargain Blue Ridge Insurance Co. v. 99-00046, Court of Appeals of by helping to educate Jacobsen, (2001, California), 25 Arizona, Division 1. judges about the nature, Cal. 4th 489, California Supreme Issue: Mold. The cost of re- scope, and significance Court. moving mold should be covered of insurance. I’m pleased Issue: Duty to defend. if the mold occurred because of that I have had the a covered loss. opportunity to play a role Chateau Chamberay Homeowners Assoc v. in that Project.” McKendry, Steven v. General Associated International American Life Insurance – John Tully Insurance, (2001, California), Company, (2001, Arizona), Case Case No. B137320, Court No. 96-CV-0754-PHX-PGR, of Appeal, Second Appellate United States District Court for AICCO, Inc. v. Insurance District, Division 3, California. the District of Arizona. Company of North America et Issue: Bad faith/Genuine Is- Issue: Confidentiality of in- al., (2001, California), Case No. sue. Insurance companies should ternal documents. UP sought A092096, Court of Appeal, First not be allowed to escape liability to intervene in an action to un- Appellate District, Division 5, simply by hiring an expert. As seal exhibits that demonstrated California. a matter of law, the insurance Paul Revere’s motives to deny Issue: Restructuring to avoid company must conduct a fair and claims. UP was allowed to in- coverage. An insurance com- thorough investigation or wheth- tervene but Court would not un- pany cannot avoid coverage in a er or not it has acted in bad faith seal documents. class policies simply restructur- is a question of fact, and not law.

United Policyholders Amicus Project Report 13 Amicus Curiae Briefs

Continental Casualty Company Issue: CERCLA. Under the sum of any liability caused by an v. Superior Court (Paragon), Comprehensive Response, accident or occurrence so long (2001, California), Case No. Compensation, and Liability as the accident or occurrence 5101679, California Supreme Act, (CERCLA) payments for causes bodily injury or prop- Court. environmental remediation or erty damage within the policy Issue: Duty to defend. UP filed “clean up” costs constitutes period. Insurers cannot escape a letter brief requesting review “damages” and should be com- liability by attempting to limit or depublication. UP supported pensable under liability insur- their obligation to property dam- position that the underlying alle- ance policies. age alone. gations determine both coverage and the duty to defend regardless Allstate Indemnity Company, DiPasquale v. Security Mutual of how they may be labeled. Allstate Insurance Company & Life Ins. Co., (2001, New York), Paul Cobb v. Joaquin Ruiz and Case No. 122062/02, Supreme Fireman’s Fund Insurance Co. Paulina Ruiz, (2001, Florida), Court of New York. v. City of Lodi, California, (2001, Case No. SC01-893, Florida Issue: SLAPP suits. Claims California), Case No. 99-15614, Supreme Court. handling philosophy; bad faith; United States Court of Appeals, Issue: Copies of policies. continuing duty of good faith; 9th Circuit. fiduciary; reverse bad faith. Issue: Post-claims underwrit- Allstate Insurance Company ing. UP supports lower court de- v. Serio, Gregory, (2001, New DiPasquale v. Security Mutual cision and educates the court on York), Case Nos.00-7769 & Life Ins. Co., (2001, New York), insurance company tactics, post 00-7780, United States Court of Case No. 601780/98, Supreme claims underwriting, etc. Appeals, 2nd Circuit. Court of New York. Issue: Mandated insurance; Issue: Financial incentives Patrick, Patricia v. UNUM Life false advertising. The State to deny. Policyholders are enti- Insurance, (2001, California), cannot require its citizens to buy tled to know when an insurance Case No. S098602, California a product and then be forced to company provides financial in- Supreme Court. stand by powerless in the face of centives to deny claims and to Issue: ERISA. The scope of the undesirable product claims know when their confidential ERISA preemption should not in the advertising campaigns for information is provided to Third be extended beyond congress’ the mandated product. Party Administrators. intent and should not be allowed to preempt first party insurer bad Anthoine et al v. Lord, Bissell Security Mutual Life Ins v. faith tort claims. & Brook et al, (2001, New York), Christopher Dipasquale, (2001, Case No. 102420/99, Supreme New York), Case No. 601780/98, Vu v. Prudential Prop. & Cas. Court of New York. Appellate Division, Supreme Ins. Co., (2001, California), Issue: Statute of limitations; Court of New York. 26 Cal. 4th 1142, California ethical and fiduciary duty. Issue: Bad faith. Years after Supreme Court. selling a policy, Security Mutual Issue: Statute of limitations. Consolidated Edison Company entered into a secret agreement v. Allstate Insurance Company, with Berkshire Life delegating Buell Industries, Inc. V. Greater (2001, New York), 2002 N.Y. to Berkshire the right and obli- Mutual New York Insurance Int. 51, New York State Court of gation to handle security mutual Co., (2002, Connecticut), Case Appeals. claims. It then applied Mass. No. SC16464, Connecticut Issue: Damages. Insurance Law to New York Policyholders Supreme Court. companies must pay the entire without telling them. This con-

14 Amicus Project Report United Policyholders Amicus Curiae Briefs

stituted a fraudulent nondisclo- California Consumer Health Care sure amounting to bad faith. Council et al. v. Department of Managed Health Care et Travelers Casualty and Surety al., (2002, California), Case No. Co v. Certain Underwriters at C041091, Court of Appeal, Third Lloyds of London, (2001, New Appellate District, California. York), Case No. 2000-2300, New Issue: HMO claim denials/ York State Court of Appeals. appeals. Writ of Mandate re- Issue: No hindsight under- quiring California Dept. of Man- writing; pollution claim. Re- “For two decades aged Health Care to obey and insurance companies should not United Policyholders enforce Health & Safety Code be free from oversight and regu- has performed a service section 137.30(h) (Knox-Keene lation. Lloyds should not be al- provided by no other Act). Policyholders should be lowed to engage in “hindsight” organization. In hundreds able to obtain documents from the CDMHC in connection with underwriting to change “loss” of amicus briefs UP has their appeal of an HMO denial to to “occurrence” and to insert a advocated on behalf of “proximate cause” requirement. ensure that policyholder’s griev- insurance policyholders ances are thoroughly reviewed to obtain the benefit Rush Prudential HMO v. Debra on a complete factual record and of the insurance Moran, (2001, United States), provide a reasoned explanation promise which they 536 U.S. 355, Supreme Court of for the final disposition of poli- the United States. purchased. This has cyholders’ grievances. Issue: ERISA. ERISA’S saving helped push back the clause must defeat a claim that relentless onslaught of California Medical Association the law is pre-empted because the insurance industry v. Aetna U.S. Healthcare of it provides a remedy other than which seeks to use California, (2002, California), those set forth in ERISA section the courts as its post- Case No. S103631, California 502. loss underwriter of last Supreme Court. resort. UP’s efforts to Issue: Health plans as insur- Health plans play the same Gilbert, Bill v. Alta Health & Life expose those arguments ers. function as health insurers and Insurance and Great-West Life for what they are in should be held to the same stan- & Annuity Ins., (2002, Alabama), brief after brief provides dards. Policyholders reasonably Case No. 01-10829, United States a significant public Court of Appeals, 11th Circuit. expect adequate payment by service. We are proud to health plans for their healthcare. Issue: ERISA. Scope of ERISA have assisted UP in the preemption after Unum Life In- Because inadequate payment to Amicus Project.” surance v. Ward. Remedial state physicians could compromise – Bill Passannante statutes regulate insurance and the quality of healthcare, under- should not be pre-empted by funding intermediaries and not ERISA. paying physicians violates the state’s unfair competition laws. Issue: Auto insurance can- Norman, George v. State Farm cellation. The Court should E.M.M.I. Inc. V. Zurich American Mutual Automobile Insurance not use admittedly bad facts to Insurance Company, (2002, Company, (2002, Arizona), Case justify insurer’s failure to satisfy California), Case No. B152740, No. CV-01-0454-PR, Supreme Arizona’s auto insurance can- California Supreme Court. Court of Arizona. cellation provisions.

United Policyholders Amicus Project Report 15 Amicus Curiae Briefs

Issue: Ambiguity in exclu- 804650, Orange County Superior Louisiana), Case No. 2002- sionary language in a Jew- Court, California. CA-0027, Louisiana Court of elers Block policy. This case Issue: Construction defect; Appeals, First Circuit. involved a carrier’s denial of a condition precedent. Request Issue: Repairs in confor- claim for theft of jewelry from a for Depublication. In construction mance with auto insurance car. UP briefed the principles of defect litigation, the Court should company’s direction must policy interpretation and argued not blindly enforce the condition- be covered. Auto owners and that the loss should be covered. precedent language of the special insurance consumers need pro- subcontractor’s endorsement. If it tection under their insurance Hameid, Mohammed A. v. does, extra-contractual consider- policies that work performed on National Fire Insurance of ations that are cited for enforce- damaged vehicles by body repair Hartford, (2002, California), ment of the endorsement will be shops, at the request of vehicle Case No. S104157, California ignored. owners and in conformance with Supreme Court. the direction provided by insur- Issue: Advertising injury. In Security Insurance Co of ance companies of the vehicles, the context of an advertising Hartford v. Lumbermens will be covered expenses ac- injury when insured is a small Mutual Casualty Co, (2002, cording to the insurance policy. business, the coverage must be Connecticut), Case No. AC broadly defined to encompass 21960, State of Connecticut Allstate v. Pincheira, (2002, New the activities of a small business. Appellate Court. Mexico), 2004 NMCA 030, Court Issue: Pro-rata allocation; con- of Appeals of New Mexico. Neil, Jonathan & Associates v. tinuing injury. Drafting history Issue: Trade secrets; McKin- Jones et al., (2002, California), sanctions the policyholder’s right sey documents. UP opposes 98 Cal. App. 4th 434, Court of to designate which general liability Allstate’s attempts to shield Appeal, Fifth District, California. insurance policies are liable to re- important documents regard- Issue: Damages. UP sought spond fully to a continuing injury. ing claims handling practices depublication of a case where This is inconsistent with any “pro- based on trade secrecy status. the court had held that the plain- rata” allocation among insurers. Court should allow discovery of tiff could not state a cause of ac- internal documents pertaining tion for bad faith for the failure to Norfolk Southern et al v. to manner of handling claims settle claims against him because California Union Insurance Co., (claims Core Process Redesign.) the conduct in question did not (2002, Louisiana), Case No. 2002 Secrecy allows corporate mis- involve the payment of claims by CA 0371, Louisiana Court of deeds by insurers to continue the insured or the failure to settle Appeal, First Circuit. unchecked. claims made against the insured. Issue: Joint and several liabil- UP respectfully disagreed with ity. The Court should affirm its American Names Association the Court’s point of view that a decision to allow joint and sever- Inc. v. New York State tort recovery for an insurer’s bad al liability where the loss may be Department of Insurance, faith breach is available only in covered by several insurance pol- (2002, New York), Supreme Court cases involving “the limited issues icies and not allow the insurer’s of the State of New York. of bad faith payment of claims and pro-rata allocation scheme which Issue: Foreign insurer licens- unreasonable failure to settle.” puts the burden on insureds. ing.

Scottsdale Insurance Company Whitehead, Carrie and State Medical Society of the State v. Essex Insurance Company, Farm Auto Mobile v. American of New York v. Gregory Serio, (2002, California), Case No. Coachworks, Inc., (2002, Superintendent of Insurance State of New York, (2002, New

16 Amicus Project Report United Policyholders Amicus Curiae Briefs

York), Case No. 116519/2001, S114778, California Supreme Supreme Court of New York. Court. Issue: Statute of limitations. Issue: Damages. Policy provi- UP supported the challenge sions related to covered “dam- to a regulation shortening the ages” under an should be inter- amount of time injured parties preted broadly to include much have in which to bring an insur- more than simply monies or- ance claim. dered by a Court.

United Policyholders v. Hon. “Policyholder cases County of San Diego v. Gregory Serio, NY State that end up in appellate Cigna Property and Casualty Insurance Dept., (2002, New courts are often filed Company, (2003, California), York), Case No. 110971/01, by general practitioners Case No. D038707, Court of Supreme Court of New York, Appeal, Fourth Appellate District, who don’t specialize in Appellate Division, First Division 1, California. insurance law and need Department. Issue: Extent of coverage. support from colleagues Issue: Cancel and annul the UP addressed insurers’ duty to de facto license of Equitas who do. UP’s amicus cover claims not specifically ad- to do business in the state briefs allow reviewing dressed by court. of New York. courts to consider the facts plus policyholder Hale v. Provident Life & Goodyear Tire and Rubber side expertise before Accident Insurance Co., (2003, Company v. Aetna Casualty & reaching a decision.” California), Case Nos. A092548, Surety Company, (2002, Ohio), – Arnie Levinson A092833, Court of Appeal, First Case No. 2000-1984 Supreme Appellate District, Division 2, Court of Ohio. California. Issue: Damages. The Court Issue: Punitive damages. adopted UP’s argument that in- Carrington, Harold J. vs. UP filed a request for publica- surance companies cannot re- Superior Court of the State of tion of a decision supporting quire that insureds allocate dam- California, County of Solano, the insured’s claim for punitive age among various policies. (2003, California), Case No. damages and the application of 104694, Court of Appeal, First Kransco (no comparative bad Ballard v. Farmers Insurance Appellate District, Division Four, faith) to first party cases. Group, (2002, Texas), Texas California. Court of Appeals. Issue: Long-term care; post Henkel Corporation v. Lloyd’s Issue: Insurance nullification; claims underwriting. Insurer of London, (2003, California), 29 bad faith. UP supported a poli- should not be able to deny long Cal.4th 934, California Supreme cyholder whose insurer failed to term care policy years later on Court. properly adjust a water damage the basis of alleged misrepre- Issue: CGL policies; first claim which in turn led to a se- sentation on application where manifest. The fundamental vere mold infestation. This high insured had Alzheimer’s at the characteristic of a general li- profile case involved a large bad time he answered the questions. ability policy (CGL) providing faith verdict which despite being coverage on the basis of an oc- reversed on appeal, led insurers County of San Diego v. Ace currence is that the policy never across the country to add sweep- Property & Casualty Ins. Co., expires even after the policy ing exclusions for mold damage. (2003, California), Case No. expires. If the occurrence caus-

United Policyholders Amicus Project Report 17 Amicus Curiae Briefs

ing the damage took place in the ered under the collapse coverage policy period, coverage should section otherwise the result is be provided regardless of when unconscionable. the damage first manifests. Silver Sage Partners, Ltd. et al. Morris, Martin v. Paul Revere v. City of Desert Hot Springs Life Insurance Company, (2003, et al., (2003, California), Case California), Case No. G030567, Nos. 02-57082, 03-55394, United Court of Appeal, Fourth Appellate States Court of Appeals for the District, Division 3, California. “UP’s Amicus Project Ninth Circuit. Issue: Bad faith. Request for is the single most Issue: Poor draftsmanship; exclusions. Where an insurer depublication of opinion which important voice held that bad faith liability can- chooses to draft an exclusion advocating for the not be imposed upon an insurer that does not clearly and unam- interests of policyholders as a matter of law where there biguously apply to a specific in courts throughout the are uncertainties in controlling claim, it cannot argue, after the case law even if the insurer is country. Without their fact, for a contrary interpreta- wrong on the law. efforts to balance the tion. Poor draftsmanship cannot playing field on critical support an insurer’s argument Powerine Oil Company, Inc. v. policyholder issues, the for a narrow underwriting con- Superior Court of California game would be far more struction of coverage. (Central National Fire Insurance uneven than it is. It is a Company), (2003, California), 37 privilege for me to assist Tran, Ngoc M., dba Shing Fat Cal.4th 377, California Supreme in this effort.” Supermarket v. Farmers Group, Court. – John N. Ellison Truck Insurance Exchange, (2003, Issue: Coverage for lawsuit California), Case No. A093437, when policy uses “suit” or Court of Appeal, First Appellate “claim” language. When a District, Division 3, California. policy uses the terms “suit” and Rocky Cola Café v. Golden Issue: Corporate structure of “claim” in its “ultimate net loss Eagle, (2003, California), Case the various Farmers Group provision, the insurer must pro- No. S117935, California Supreme entities. In this case UP de- vide coverage for a lawsuit in a Court. scribed for the court the relation- court of law and other judicial Issue: Duty to Defend; reim- ships between various corporate proceedings. bursement. There is no author- entities within the Farmers Insur- ity for an insurer who provides ance Group of Companies and Radian Guaranty Ins. v. a litigation defense to seek TO- argued it is improper to allow Respondents, (2003, California), TAL reimbursement of all funds FIG to use an “attorney in fact” File No. SF 15404-A, OAH on grounds that it never had a relationship to avoid liability for No. N2002070670, California duty to defend in the first place. claims handling decisions. Insurance Commission. Issue: Title insurers. UP sup- Rosen, George v. State Farm Uhrich v. State Farm Fire & ports DOI ruling that two com- General Insurance Company, Casualty Co., (2003, California), panies that do not meet Califor- (2003, California), Case No. Case No. S117639, California nia criteria for title insurers to S108308, California Supreme Supreme Court. cease and desist from transact- Court. Issue: Intentional acts. A ing title insurance. Issue: Imminent collapse. personal liability insurer cannot Imminent collapse must be cov-

18 Amicus Project Report United Policyholders Amicus Curiae Briefs

promise to defend and pay claims 00192-SCT, Supreme Court of for enumerated intentional torts Mississippi. such as false arrest, false impris- Issue: Insurance as public onment, defamation, or invasion service; duty of good faith of privacy and then deny cover- and fair dealing. age because the inherently intentional quality of the insured’s act Hardy v. Progressive Speciality violates the policy requirement Ins. Co., (2003, Montana), Case that the personal injury offense No. 02-448, Supreme Court of result from an “accident.” “I’m a big believer in the Montana. UP Amicus Project. It Issue: Stacking. Prohibiting stacking for policyholders who Nationwide Mutual Insurance provides an opportunity v. Richardson, (2003, District of pay multiple premiums is not ra- for policyholders to Columbia), Case No. 01-SP-1451, tionally related to making insur- be heard on important District of Columbia Court of ance affordable. issues where too often Appeals. there otherwise might Issue: Pollution exclusion. Crownover et al., v. Travelers Court should consider the his- be silence.” Casualty & Surety Co. et al., torical circumstances surround- – Kirk Pasich (2002, Nevada), Case No. 40234, ing the drafting of the Absolute Supreme Court of Nevada. Pollution Exclusion (APE) and Issue: Duty to defend. limit its application to long-term industrial pollution of the envi- Kentucky Farm Bureau Mutual Loyal Crownover v. Traveler’s ronment and should not allow Insurance Company v. Tina Casualty & Surety, (2003, insurance companies to apply Rodgers, (2003, Kentucky), Case Nevada), Docket No. 40234, the APE to cases that do not in- No. 2002-SC-001044, Kentucky Superior Court of Nevada. volve environmental pollution. Supreme Court. Issue: Exclusions. Exclusions Issue: Punitive damages; in- in a policy cannot be buried in the surance as a public service. Nationwide Mutual Fire boilerplate verbiage of the grant of Insurance Company v. Belville, coverage. In this policy the prom- (2003, Florida), Case No. SC02- Consumer Federation of ise of a defense under these cir- 2385, Florida Supreme Court. America et al. v. Maine Bureau cumstances was clear and invoked of Insurance, (2003, Maine), Issue: Pollution exclusion. the insurer’s duty to defend. Case No. AP-03-37, Maine Superior Court, Kennebec County. Hoffman, David M. v. State of Belt Painting Corp v. TIG Issue: Freedom of Informa- Georgia, Office of Insurance Insurance Co., (2003, New York), tion Act request. Request Commissioner and John W. 2003 NY Int. 93, New York State made under Freedom of Infor- Oxendine, (2003, Georgia), Case Court of Appeals. mation Act for unredacted ver- No. A04A0134, Court of Appeals Issue: Pollution exclusion. sion of Arthur Anderson’s report of Georgia. New York State law should limit on UnumProvident’s claims han- Issue: Discovery of market the application of ISO’s stan- dling and other practices for the conduct examinations. Brief dard-form pollution exclusions Maine Department of Insurance. requesting that the State of Geor- to industrial pollution of the en- gia be forced to make the Insur- vironment and it should not be ance Commissioner’s investigative Gallagher Bassett Service applied to avoid liability for rou- (2003, study of UnumProvident public. Inc. v. Chas. Jeffcoat, tine premise/operations claims. Mississippi), Case No. 98-CA-

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Factory Mutual Insurance Co. conduct. Also, the Court should port the California Insurance v. Northwest Aluminum, (2003, not establish a bright line ratio. Commissioner’s authority to Oregon), Case No. 03-35147, regulate underwriting practices United States Court of Appeals, Johnson Controls v. Employers for the purposes of preventing 9th Circuit. Insurance of Wausau, (2003, punitive non-renewals. Issue: Statute of limitations. Wisconsin), Case No. 01-1193, The doctrine of equitable tolling Wisconsin Supreme Court. California Auto Insurance requires that suit limitations in a Issue: CGL policies. CGL cov- Company v. Hogan, (2004, policy be tolled between the date erage by a utility must include California), Case No. S120950, the insurer receives notice of the costs of clean up for historical California Supreme Court. claim and the date it denies the property damage including en- Issue: Auto insurance. Cali- claim. vironmental response costs. fornia motor vehicle insurance provides coverage for injuries Koken v. Legion & Villanova Ins., Glanton (Alcoa) and Mackner v. bearing almost any causal rela- (2003, Pennsylvania), Case Nos. AdvancePCS Health, LP, (2004, tionship to the vehicle. 204, 205, 211, 212, MAP 2003. Arizona), Case No. 04-15328, Issue: Reinsurance. A rein- United States Court of Appeals, Cassim, Fareed v. Allstate surer’s obligation to make pay- 9th Circuit. Insurance Company, (2004, ments to the insured does not Issue: ERISA. Participants and California), 33 Cal.4th 780, diminish after insolvency. Beneficiaries suing on behalf of California Supreme Court. an ERISA plan under 502(a) (2) Issue: Attorney’s fees. Policy- Ravindran v. Harleysville should be able to seek money from holders should have the right to Insurance Company, (2003, the plan in the same manner as a recover attorney’s fees incurred Pennsylvania), Superior Court of fiduciary. Petition for rehearing. to recover unpaid benefits. Pennsylvania. Issue: Good faith; bad faith; Safeway Insurance Co. v. Greene v. Century National arbitration. Guerrero, (2004, Arizona), 106 Insurance Co. et al., (2004, P.3d 1020, Supreme Court of California), Case No. B144789, Wagner v. Eire Ins., (2003, Arizona. Court of Appeal, Second Appellate Pennsylvania), Supreme Court of Issue: Reasonable settle- District, Division 4, California. Pennsylvania. ment agreement. When an in- Issue: Public adjuster fees. Issue: Reasonable expecta- surer has failed in some respect Policyholders should be able to tions of policyholder. Gaso- to fulfill a legal duty to its in- claim public adjuster fees as an line station owner’s reason- sured, the insured can enter into a item of damage where retention able expectation of coverage reasonable settlement agreement of the public adjuster was neces- for damage caused by gasoline without the insurer’s permission. sitated by the insurer’s bad faith should control. conduct. American Insurance Assn. v. State Farm Mutual Auto Garamendi, (2004, California), Insurance Commissioner of Insurance Co. v. Curtis B. Case No. C045000, Court of CA v. Golden Eagle Insurance Campbell, et al., (2003, United Appeals, Third Appellate District, Co., (2004, California), Case No. States), 538 U.S. 408, Supreme California. A104076, Court of Appeal, First Court of the United States. Issue: “Use it and lose it”; In- Appellate District, Division 3, Issue: Punitive Damages. An surer’s practice of dropping California. award of punitive damages should policyholders after they file Issue: Pollution exclusion; be linked to reprehensibility of a claim. UP weighed in to sup- commercial policy.

20 Amicus Project Report United Policyholders Amicus Curiae Briefs

Marselis, Anne v. Allstate to deprive states of the ability to Insurance Co., (2004, exercise their legitimate state in- California), Case No. A100860, terests in deterring and punishing Court of Appeal, 1st Appellate unlawful conduct through the use District, Division 3, California. of reasonable punitive damage Issue: Statute of limitations. awards. The permissible ratio of Because it did not rely on the punitive to compensatory dam- statute of limitations in denying ages after Campbell should not the claim, Allstate should be es- be limited to a bright line ratio. topped from raising it as an af- “The importance of firmative defense in a bad faith providing an additional Watts Industries, Inc. v. Zurich lawsuit filed against it by its voice for policyholders American Ins. Co., (2004, policyholder. California), Case No. B162067, through UP’s amicus Court of Appeal, Second District, project is immeasurable. Metz, John v. Superior Court California. Here at Merlin Law of California, (2004, California), Issue: Duty to defend. Insurer Case No. B175073, Court Group we are proud to must offer a defense if there is of Appeal, Second Appellate be a part of the process a potential for coverage of any District, California. by submitting amicus part of underlying claim. Issue: Relief under insurance briefs on UP’s behalf.” code 1871.7. Deputize pri- – Mary Fortson Board of Directors Metro vate citizens. UP supports re- Wastewater v. Nat’l Union lief under section 1871.7 which Fire, (2004, Colorado), Case No. deputizes private citizens to act 03 SC 846, Colorado Supreme on behalf of the state claim- Permanent General Assurance Court. ing that Farmers Insurance Co. Corp. v. Superior Court Of Issue: Late notice. Whether makes misrepresentations in its California, County of Orange insurer can deny claim based on handling of private passenger (Hernandez), (2004, California), late notice without showing of vehicle physical damage claims 19 Cal.Rptr.3d 597, Court of prejudice. and in the sale and marketing Appeal, Fourth District, Division of its private passenger vehicle 3, California. Fayad v. Clarendon National physical damage related insur- Issue: Discovery and admis- Insurance Co., (2004, Florida), ance policies. sibility of evidence of pat- Case No. SC03-1808, Florida tern and practice of unfair Supreme Court. Paul Revere Life Insurance claims handling. Issue: Earth movement ex- Company v. Taylor, (2004, clusion. Earth movement ex- California), Case No. C 99-21104 Simon, Lionel v. Sao Paulo clusion should be narrowly in- JF, United States District Court, U.S. Holding Co., Inc., (2004, terpreted. Northern District of California. California), Case No. S121933, Issue: Reservation of rights. California Supreme Court. Taurus Holdings, Inc. v. US Paul Revere must expressly in- Issue: Punitive damages. Fidelity & Guaranty, (2004, form its policyholder that it is A careful reading of Campbell Florida), Case No. SC04-771, reserving its right to exercise its shows that the Supreme Court Florida Supreme Court. discretion in making a disability did not lay down a single digit Issue: Ambiguity should determination. ratio for punitive damages and be construed in favor of in- the decision was not intended sured. UP requests Court af-

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firm that the undefined insur- Gencorp Inc. v. AIU Insurance ance policy phrase “arising out Co., (2004, Ohio), Case No. of” is ambiguous and should be 04-3244, United States Court of construed in favor of coverage. Appeals, 6th Circuit. Issue: Environmental clean- AAA Disposal Systems, Inc. up. Coverage for environmen- and BFI Waste v. Aetna, (2004, tal cleanup should be consistent Illinois), Supreme Court of with insured’s reasonable ex- Illinois. pectations of coverage. Issue: Late notice; all sums; “Since preparing a joint and several; allocation. McCormick & Baxter Glidden Company, The v. Lumbermans Mut. Cas. Co., Amicus brief in 1996 et al., (2004, Ohio), Case No. Banerji, Julian v. John which helped change the Hancock Life Insurance and 81782, Court of Appeals of Ohio, environmental-coverage Unum Provident, (2004, Eighth District. Massachusetts), Supreme Judicial law of Oregon in favor of Issue: Corporate policyhold- Court of Massachusetts. policyholders, it has been ers entitled to coverage for Issue: Unwritten exclusions; my privilege to work with pre-acquisition activities. This breach of contract; insur- United Policyholders. case addresses the availability ance nullification. Together, we have filed of insurance coverage to corpo- numerous additional rate policyholders after corporate Ketzner v. John Hancock briefs on all kinds of transactions. The insurance com- Mutual Life Insurance Co., coverage issues, fought panies had argued that certain (2004, New Jersey), Case No. for policyholder rights corporate transactions eliminate 03-4870, United States Court of and held the insurance insurance coverage. The Ohio Appeals for the Third Circuit. industry to its promises. Court of Appeals disagreed in a significant opinion. They held Issue: RICO; Post complaint I am proud to be a part that the insured was entitled to bad faith. of all that Anderson Kill benefits under the policies at issue and United Policyholders Gulf Ins. Co. v. Transatlantic for pre-acquisition activities of a have accomplished Reinsurance et al., (2004, New paint business, including the right together and look York), Index No. 601602/03, to indemnification and the right to forward to continuing to Supreme Court, Appellate Division, a defense. 1st Department, New York. work with UP for many Issue: Exclusions. The pur- years to come.” 401 Fourth Street Inc. v. pose of UP’s brief was to edu- – John Nevius Investors Ins. Group, (2004, cate the court on a wide range of Pennsylvania), Case No. insurance policy exclusions that J-71-2004, Supreme Court of are creating claims disputes. Pennsylvania. an insurance company has brought Issue: Imminent collapse. a declaratory judgment action to Since the term “collapse” in the U.S. Underwriters Insurance determine that it does not have policy is ambiguous and con- Co. v. City Club Hotel, LLC, policy obligations but defended (2004, New York), 3 N.Y.3d 592, notes only a substantial impair- in the underlying suit, the insured New York State Court of Appeals. ment of a building’s structural that prevails in the dec. relief ac- Issue: Declaratory relief; at- integrity, there must be coverage tion should be awarded attorney’s torney’s fees. In a case in which for “imminent collapse.” fees for defending that action.

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Barber, James v. Unum Life Fairfield Insurance Co. v. Insurance Company of America, Stephens Martin Paving, (2004, (2004, Pennsylvania), Case No. Texas), Case No. 04-0728, 03-4363, United States Court of Supreme Court of Texas. Appeals, 3rd Circuit. Issue: All sums; extent of Issue: ERISA. ERISA should coverage. The “all sums” lan- not preempt state insurance laws. guage in a liability policy of insurance should be construed to Erie Ins. Exchange v. Hollock, provide coverage for gross neg- (2004, Pennsylvania), Case No. “Who fights for ligence and punitive damages. 67 MAP 2005, Supreme Court of policyholders Pennsylvania; 298 MDA 2002, throughout the Aetna Health, Inc. v. Juan Davila, Superior Court of Pennsylvania. country state by (2004, United States), Case Nos. 02-1845 & 03-83, Supreme Court Issue: Bad faith. In Pennsyl- state? Who never vania a violation of the Unfair of the United States. is beholden to the Practices Act should be relevant Issue: ERISA. ERISA not in- enormous coffers evidence of bad faith. An insur- tended to preempt state laws ance company’s violations of its of the insurance regulating insurance, Outcome: own internal guidelines, manu- industry? Who is U.S.Supreme Court holds, once als and procedures is relevant willing to take on again, that ERISA preempts ev- evidence of bad faith. Case up- insurance companies erything. holds post-Campbell ratio of without any conflicts compensatory to punitive dam- no matter the issue? SER Allstate Insurance Co. v. ages of 10:1. United Policyholders! The Honorable Madden, John It has been an honor T., (2004, West Virginia), Case Kvaerner Metals V. Commercial of Anderson Kill to No. 31392, Supreme Court of Union, (2004, Pennsylvania), represent United Appeals of West Virginia. 908 A.2d 888, Supreme Court of Policyholders in every Issue: Attorney client privi- Pennsylvania. state in the country lege. When crime/fraud excep- Issue: Reasonable expecta- – lending whatever tion is invoked, insurer cannot shield evidence from insured on tions of coverage; rules of assistance we can to interpretation; duty of good grounds of attorney/client privi- United Policyholders faith and fair dealing. lege. The crime fraud exception in its efforts to make is essential in deterring corpo- new law favorable to Willow Inn, Inc. v. Public rate misconduct. The assertion policyholders in every Service Mutual Insurance Co., of defenses to an insurance bad (2004, Pennsylvania), Case No. jurisdiction. We look faith claim is manifestly suffi- 03-2837, United States Court of forward to helping cient to trigger the exception. Appeals, 3rd Circuit. United Policyholders Issue: Punitive damages. A in its quest for Davaloo v. State Farm punitive damage award that ex- policyholder justice Insurance Company, (2005, ceeds the Campbell ratio of 9:1 and fairness in the California), 37 Cal. Rptr.3d 528, does not violate substantive due future.” Court of Appeal, Second Appellate process. – Bob Horkovich District, Division 7, California. Issue: Sufficiency of plead- ings. The Davaloo opinion is

United Policyholders Amicus Project Report 23 Amicus Curiae Briefs

a pleading case arising out of a from contradicting positions tak- Nationwide Mutual Insurance property insurance dispute. The en by them at the time the provi- Company v. Chillura, (2005, opinion concerns whether or not sions at issue were drafted and Florida), Case No. 2D04-4906, an original complaint contained in other insurance coverage ac- Florida Second District Court of sufficient factual allegations tions simply when it serves their Appeal. such that an amended complaint own financial interests to do so. Issue: Sinkhole coverage. UP would timely relate back. When construing an insurance argued in this brief that a build- policy, the primary focus should ing’s foundation system is an in- Johnson et al. v. Ford Motor be on the reasonable expecta- tegral component of any building Co., (2005, California), 35 tions of the insured at the time such that declaring a foundation Cal.4th 1191, Supreme Court of the coverage was purchased. system part of the “land” and not California. part of the building in order to Issue: Punitive damages. The Penn-America Insurance deny coverage misconstrues and permissible ratio of punitive to v. Mike’s Tailoring, (2005, misapplies both Florida Statute compensatory damages after California), Case No. S131639, No.627.706 and related policy Campbell should not be limited Supreme Court of California. provisions. In many or all prop- to a bright line ratio. Issue: Proximate and con- erty liability insurance contexts, current causation. Scope of (e.g., fire, windstorm, water, Julian v. Hartford Underwriters water damage exclusion involv- etc.), a property’s infrastructure, Ins. Co., (2005, California), 35 ing issues of proximate and con- internal, and its external compo- Cal.4th 747, Supreme Court of current causation. nents are examined to determine California. the full extent of damage or loss. Issue: Landslide exclusion. The Perez v. Fire Insurance There is no valid reason for treat- scope of landslide exclusion should Exchange, (2005, California), ing sinkhole damaged property not encompass damage from a tree Case No. F043931, Court of any differently. that crashed into a home. Appeal, Fifth Appellate District, California. Avery, Michael E. et al. v. State Lockheed Corp. v. Continental Issue: Corporate structure of Farm Mutual Automobile Ins.Co., (2005, California), 134 Farmers Insurance Exchange. Insurance Company, (2005, Cal.App.4th 187. Illinois), 216 Ill. 2d 100, Supreme Issue: Environmental liabili- Timmiss v. Kaiser Permanente Court of Illinois. ties; Reasonable expecta- Health Plan, (2005, California), Issue: “After market” auto tions of insured. Interpre- Case No. S130671, California parts. Insurance Company tation of the personal injury Supreme Court. should not be able to use after liability (“PIL”) coverage provi- Issue: Health plans as health market parts when policy calls sion in comprehensive general insurers. Health plans func- for restoring vehicle to pre-loss liability policies and its application as health insurers. If the condition; unfair practices; Mc- tion to environmental liability. evidence shows that insurers Carran-Ferguson Act. Long standing positions taken are requiring Policyholders to by the insurance industry flatly alter medications in order to Knotts v. Zurich Insurance Co., contracts the current position take the proper dosage. Insurers (2005, Kentucky), 197 S.W.3d of the industry that violation or are engaging in unfair business 512, Kentucky Supreme Court. infringement of property or con- practices and are defeating the Issue: Continuing duty. Insur- tract rights claims are not with reasonable expectations of their ance Company has a continuing the PIL coverage. Insurance insureds. The Court system must duty of good faith and fair deal- companies must be prevented provide redress for this wrong. ing after a lawsuit has been filed.

24 Amicus Project Report United Policyholders Amicus Curiae Briefs

Harrison, Francie E. v. Unum cisions, requires that Plaintiffs be Life Ins. Co. of America, (2003, allowed their day in court. New Hampshire), Docket No. 05- “United Policyholders 1577, U.S. Court of Appeals, First has been a vital force for Culhane and Turbak v. Western Circuit. educating the judiciary National Mutual, (2005, South Issue: Disability benefits and in California on cutting Dakota), Case No. 23442, definitions. In absence of defi- edge cases. They are the Supreme Court of South Dakota. nition of “crime” in the policy, invaluable counterweight Issue: Automobile insur- disability benefits should not be to the misinformation ance/diminished value of denied when first time offense routinely supplied by the vehicle. This case involved was considered a “violation” insurance industry.” (1) Whether the policy required and not a “crime.” – Jordan Stanzler indemnification for both the cost of repairs and post-repair Duane Reade, Inc. v. St. Paul diminished market value; and Fire & Marine, (2005, New York), (2) Whether Western acted in Case No. 03-9064, United States rule, UP supported the argument bad faith when it denied Cul- Court of Appeals, 2nd Circuit. that a corporate policyholder is hane’s post-repair diminished Issue: Period of restoration. entitled to a defense and indem- market value claim. This case involved claims by nity for pre-acquisition liabilities policyholder Duane Reed, a because liability insurance cover- Excess Underwriters at Lloyd’s chain store of sundries and pre- age follows the alleged liability of London v. Frank’s Casing scription drugs that lost its loca- by operation of law. The major- Crew & Rental Tools, Inc., tion at the World Trade Center ity of courts have held that anti- (2005, Texas), Case No. 02-0730, on 9/11. UP urged the court to assignment clauses do not apply Supreme Court of Texas. consider the original location of to the transfer of coverage rights Issue: Excess insurers’ right a policyholder’s operations as or choses in action after a loss has to recoup defense and settle- critical to determining coverage taken place. This position also is ment costs. UP argued that an for the “period of restoration.” consistent with the custom and excess insurance company may practice of insurance companies not force a policyholder to reim- Harris v. Unum Life Insurance and corporate policyholders alike. burse it for settlement payments Company, (2005, New York), it made on behalf of the poli- Case No. 05-4265, United States Weiss v. First Unum Life cyholder where such payments Court of Appeals, 2nd Circuit. Insurance Co., (2005, were made prior to an adverse Issue: Disability claim deni- Pennsylvania), Case No. 05- coverage determination and als/ERISA. This case involved 5428, United States Court of where the policyholder made no evidence of Unum’s pattern and Appeals for the Third Circuit, express agreement to reimburse practice of using biased doctors to Philadelphia. the insurance company. justify denying disability claims. Issue: ERISA should not preempt RICO. The Supreme Court Motiva Enterprises, LLC v. St. Pilkington North America v. has held that RICO enforcement Paul Fire & Marine Ins. Co. Travelers, (2005, Ohio), Case does not conflict with ERISA or etc., (2005, Texas), Case No. No. 2005-0378, Supreme Court of the McCarran-Ferguson Act and 05-20139, United States Court of Ohio. that UnumProvident’s history of Appeals, 5th Circuit. Issue: Liability insurance fol- reprehensible bad faith claim han- Issue: No forfeit of coverage lows liability by operation dling, evidenced by governmental for settling without insur- of law. Relying on the majority sanctions and numerous court de- ance company’s authority.

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The insured should not forfeit Issue: Duty to defend. The should be covered under D & O coverage by settling without Court of Appeal improperly policy and the Court should not insurance company’s authority ignored the State Farm policy so broadly construe the exclu- when the insurance company language obligating the insurer sion for breach of contract so as intentionally places itself in an to defend both claims and suits. to apply to tort claims because adversarial position with its in- By ignoring this language the the lawsuit remotely related to sured by issuing a Reservation First District violated the rule in the corporation’s breach of its of Rights. California that “insurance con- bond obligations. Moreover, the tracts are construed to avoid ren- burden of proof to disprove the Fuller-Austin Insulation dering terms surplusage. Since application of the breach of con- Company v. Highlands State Farm’s policy used both tract exclusion, simply because Insurance Company, et al., “claims” and “suits” it clearly in- the exclusion was hidden in the (2005, United States), Case No. tended those terms of art to have definition of a term contained in 06-94, Supreme Court of the separate and different meanings. the insuring clause of the policy. United States. California Courts have always Issue: Insurers’ duties to Cold Creek Compost, Inc., et.al held that the insurer bears the bankrupt policyholders. This v. State Farm Fire & Casualty, burden to prove that an exclu- case related to insurers’ duties (2006, California), Case No. sion precludes coverage. to policyholders who had to de- A114623, Court of Appeal, First clare bankruptcy due to asbestos Appellate District, Division 1, Old United Insurance Company, liabilities. California. dba Vantage Casualty Company Issue: Pollution exclusion; v. Don Buhrman, (2006, City of Chesapeake v. State duty to defend. This case in- California), Case No. E039995, Self-Insurers Risk Retention volves the proper scope and Court of Appeal, Fourth Appellate Group, (2005, Virginia), Case application of the “reasonable District, Division 2, California. No. 051986, Supreme Court of expectations doctrine.” Com- Issue: Arbitration clause; Virginia. posting facilities create offensive tort damages. The policy at Issue: Pollution exclusion. odors in the ordinary course of issue contained a compulsory History is squarely on the side business by composting mainly arbitration clause which the in- of policyholders fighting against “green materials.” A reasonable surance company ignored, forc- over-reaching and unreasonable policyholder under these cir- ing insured to incur expenses for applications of so-called absolute cumstances would not consider litigation as well as loss of time. total pollution exclusions. United the odors produced by its opera- Under these circumstances, Policyholders urged the Court to tions to be an environmental pol- damages for breach of contract ensure that representations made lution. Therefore, the pollution are insufficient. Only a tort ratio- by insurance companies as to exclusion in State Farm’s poli- nale will provide compensation the meaning of exclusions when cies does not exclude the Cold for the consequential damages adopted remain the standard by Creek policyholders’ liability in suffered by the policyholder. which the application of these the Underlying Action. provisions is later judged. State of California ex rel. Medill v. Westport Insurance Linda Nee and John Metz vs. 2130 Leavenworth Corporation, (2006, California), Unum Provident Corporation, Homeowners Assoc. v. State Case No. S148000, California et al., (2006, California), Case Farm Ins. Co., (2006, California), Supreme Court. No. B183487, Court of Appeal, Case No. S147449, Supreme Issue: Burden of proof. Second Appellate District, Court of California. Volunteer Board of Directors Division 5, California.

26 Amicus Project Report United Policyholders Amicus Curiae Briefs

Issue: Qui tam actions. UP sup- Issue: Notice-prejudice. In- ported the right of private citizens surance company must show to bring qui tam actions seeking prejudice if it denies a claim redress for unfair claim practices based on late notice against insurance companies. Travelers Casualty and Surety State of California v. Superior Company, et. Al. (appellants/ Court, (2006, California), Defendants) v. United States 146 Cal.App.4th 851, Court of Filter Corporation, (2006, Indiana), Case No. 49A02- Appeal, Fourth Appellate District, “United Policyholder’s 0604-CV-289, Court of Appeals, Division 2, California. Amicus Project is Indiana. Issue: Pollution exclusion. important because it UP brief the scope and effect of Issue: Occurrence; succes- allows us to highlight for pollution exclusions in liability sor insurers. This case in- the judiciary the legal insurance policies with regard to volves occurrence-based insur- reasoning and policy allocation of burden of proof as ance policies that the various between covered and non-cov- considerations behind insurance company defendants ered issues; regulatory estoppel; decisions that affect (collectively, the “Insurers”) (regulatory admissions). policyholders’ rights.” sold to U.S. Filter’s predecessor, – Carrie DiCanio which require that the Insurers TRB Investments v. Fireman’s defend and indemnify U.S. Fil- Fund, (2006, California), 40 ter for losses that occurred prior Cal.4th 19, Supreme Court of to U.S. Filter’s succession to the lying coverage action which are California. policy. relevant to the issue of whether Issue: “Under construction” the company evaluated the claim exclusion. The Court’s inter- Chauvin v. State Farm Fire and in good faith. Attorney-client pretation of the “under construc- Casualty Company, et al., (2006, privilege cannot act as a shield tion” exception to the exclusion Louisiana), Case No. 05-6454 for insurer’s bad faith conduct. to apply only to the new con- c/w 06-0177, Eastern District, struction of a building and not Louisiana. to the renovation of an existing Tri-Star Lodging, Inc. v. Arch Issue: Anti-concurrent cause;

building violates California law Specialty Insurance Company, valued policy law. In this impor- (2006, Florida), Case No. 06- in numerous ways. tant post-Katrina case, UP asked 13989, United States Court of the Court to reject State Farm’s Appeals, 11th Circuit. Aircraft Holdings, L.L.C. vs. XL untenable and unsupported sug- Issue: Right to jury trial. The Specialty Insurance Company, gested interpretation of the VPL right to a jury trial as it applies (2006, Florida), Case No. SC06- which, in effect, seeks to render to a claim of first-party breach of 1303, Florida Supreme Court. the VPL inapplicable to situations contract. The decision of the low- Issue: Attorney-client privi- where a covered peril and a non- er court should be reversed as an lege. In a first-party action covered peril were each involved assault on the right to jury trial. brought pursuant to Section in the total loss to a covered prop- 624.155, the attorney-client erty. The anti-concurrent causa- privilege does not bar produc- Country Mutual Ins. Co. v. tion language upon which State tion of attorney-client commu- Livorsi, (2006, Illinois), 856 Farm relied in connection with nications generated during the N.E.2d 338, Supreme Court of its interpretation has already been claim investigation and under- Illinois. deemed ambiguous as a matter of

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law by another Federal Court ad- ers to assert their legal rights to clause in the underinsured mo- dressing similar arguments raised recover in many instances and torist (UIM) coverage in order to by State Farm. Tuepker, 2006 WL will result in increased suits reduce the amount of UIM ben- 1442489 at * 5. against unnecessary parties. efits paid to its policyholder by the amount of benefits the poli- Denmark v. Liberty Life National Union Fire Insurance cyholder received from a work- Assurance Company of Boston, Company of Pittsburgh v. ers’ compensation insurer. (2006, Massachusetts), Case No. Beatrice Crocker, (2006, Texas), 05-2877, United States Court of Docket No. 06-0868, Supreme Fidelity and Guaranty Insurance Appeals, 1st Circuit. Court of Texas. Company, et al., vs. German Issue: Objective evidence Issue: Duty to disclose cov- Motors Corp. et al., (2007, of disability; ERISA. Anti- erage. The Court should con- California), Case No. S158329, consumer and anti-policyholder firm the well-established rule California Supreme Court. effects of denying coverage in that insurance companies owe Issue: Garage keepers pol- disability cases involving both a their policyholders and addi- icy; interpretation of “nec- disease that is difficult to docu- tional insureds a duty to disclose essary or incidental.” Un- ment objectively and an over- coverage. Moreover, an insur- der a garage keepers policy the whelming amount of medical ance company cannot rely on phrase “necessary or incidental evidence that favors a finding of lack of formal notice when it (a) to” when evaluating scope of complete disability. Long term receives actual notice or (b) has coverage is not supported by the care insurance companies are not been prejudiced by a lack of broader interpretation contained sometimes permitted too much notice. in published opinions in other discretion under the “arbitrary states or any published opin- and capricious” standard of Philip Morris USA v. Mayola ions in California. Allowing the review that courts apply in re- Williams, (2006, United States), restrictive interpretation of the viewing coverage denials under Case No. 05-1256, Supreme Appellate Court to stand contra- ERISA. Court of the United States. venes California’s long standing Issue: Punitive damages. In interest in finding ways to grant, General Refractories Corp. v. this post-Campbell case, UP ar- rather than deny, insurance cov- First State Insurance Co., (2006, gued that lower courts were mis- erage. Pennsylvania), Case No. 05-4708, interpreting the Campbell deci- United States Court of Appeals, sion as applying a single digit First American Title Ins. Co. 3rd Circuit. ratio test for punitive damages. v. Superior Court, (2007, Issue: Commercial General UP argued that Campbell was California), 146 Cal.App.4th Liability policies. The issue on unclear on this issue and asked 1564, Court of Appeal, Second appeal in this case primarily im- the Supreme Court of the United Appellate District, Division 3, pacts commercial policyholders. States to clarify its position. California. A lower court granted an insur- Issue: Discovery. Request for er’s motion and dismissed a pol- Cundiff, Jean v. State Farm depublication. Plaintiffs must be icyholder’s case because they Automobile Insurance allowed pre-certification discov- did not sue every possible insur- Company, (2007, Arizona), Case ery in class actions arising out er that had even a remote con- No. CV-07-0057-PR, Supreme of insurance marketing and un- nection to the underlying claim. Court of Arizona. derwriting practices which often If the holding is not reversed on Issue: UIM offset. Under Ari- involve damages to policyhold- appeal it will make it prohibi- zona law, an insurer should not ers that are too small to warrant tively expensive for policyhold- be allowed to use the “off-set” individual action.

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Griffin Dewatering v. Northern Berthelot et al. v. Boh Brothers Ins. Co. of N.Y., (2007, Construction Co. L.L.C. et al., California), Case No. G036896, (2007, Louisiana), Civil Action Court of Appeal, Fourth Appellate No. 05-4182, United States District, Division 3, California. District Court for the Eastern Issue: Genuine dispute; District of Louisiana. Brandt fees. UP argued that Issue: Anti-concurrent cause. insurers should not be permitted The anti-concurrent causation to invoke the “genuine dispute” language upon which Defendants doctrine as a basis for denying “Amicus have a unique rely has already been deemed a claim where it has failed to perspective. They can ambiguous as a matter of law by investigate the insured’s claim another Federal Court address- share concerns that go thoroughly and/or asserted a ing similar arguments raised by beyond the narrow facts pretextual ground for denial. Defendants. Tuepker v. State of the case and guide Farm Fire and Cas. Co., 2006 the court to question Hailey v. California Physicians’ WL 1442489 (S. D. Miss.). Fur- Service dba Blue Shield of decisions which may thermore, Defendants’ position California, (2007, California), not have fully evaluated with regard to this language is in Case No. GO35579, Court of applicable law pertaining complete derogation of the “effi- Appeal, Fourth Appellate District, to the issue before it.” cient proximate cause” doctrine, Division 3, California. – David Gauntlett which has been adopted by the Issue: Post-claims under- Louisiana Supreme Court and writing. Health and Safety provides that a policyholder is Code section 1389.3 was de- entitled to coverage if a covered signed to stop the practice of for defense and indemnity pay- peril was the proximate or ef- post-claims underwriting. Blue ments under standard form com- ficient cause of the loss or dam- Shield should not be allowed mercial general liability (“CGL”) age, notwithstanding that other to engage in post-claims underinsurance policies that were in- excluded or non-covered perils writing and rescind its policy consistent with settled California contributed to the damage. when it fails to sufficiently in- law, and that the parties therefore did not properly frame the issues vestigate and turns a blind eye Williams et al.v. State Farm Fire to information it either knew or for the Court to resolve. and Casualty Company, Allstate had access to and ignored. Indemnity Company, and State of California v. Louisiana Property Insurance Padilla Construction Company, Underwriters at Lloyd’s Corporation, (2007, Louisiana), Inc., v. Transportation Insurance London, Allstate, (2007, Case No. 07-00247-CA, Case No. Company, (2007, California), California), 45 Cal.4th 1008, 06-2919, United States District Case No. G036451, Court of Supreme Court of California. Court for the Eastern District of Appeal, Fourth Appellate District, Issue: Pollution exclusion. Louisiana. Division 3, California. A protracted and important case Issue: Anti-concurrent cause. Issue: CGL defense and in- involving environmental liabili- The anti-concurrent causation demnity payments. UP ad- ties from the Stringfellow Acid language upon which Defendants vised the reviewing court that Pits, UP and several co-amici rely has already been deemed both Appellant and Respondent briefed numerous points includ- ambiguous as a matter of law by were advocating positions con- ing regulatory estoppel, policy another Federal Court address- cerning the “scope” of coverage interpretation and the adhesive ing similar arguments raised by nature of insurance contractors.

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Defendants. Tuepker v. State Boston Gas v. Century United States Court of Appeals, Farm Fire and Cas. Co., 2006 Indemnity Co; Certain 3rd Circuit. WL 1442489 (S. D. Miss.). Fur- Underwriters at Lloyd’s Issue: Duty to defend/adver- thermore, Defendants’ position London, et. al., (2009, tising injury. This case arose with regard to this language is in Massachusetts), 910 N.E.2d out of an insurer’s refusal to de- complete derogation of the “effi- 290, Supreme Judicial Court of fend or indemnify a policyhold- cient proximate cause” doctrine, Massachusetts, Suffolk. er that was sued for sending un- which has been adopted by the Issue: All sums versus allo- solicited faxes. Issues included Louisiana Supreme Court and cation of loss. Coverage for the scope of coverage for adver- provides that a policyholder is continuous injury when multiple tising injury, as well as whether entitled to coverage if a covered policies cover the loss. The Court the policyholder expected or in- peril was the proximate or ef- should adopt the position that tended to cause harm. The insur- ficient cause of the loss or dam- joint and several liability should er defendant vigorously opposed age, notwithstanding that other be imposed against insurance United Policyholders’ attempt to excluded or non-covered perils companies for damages arising weigh in as amicus curiae. contributed to the damage. from an ongoing injury. The only way the policyholder can enjoy Jamaica Hospital Medical the security it purchased with Allmerica Financial Center, Inc. et al, vs. United Corporation, SMA Financial each policy is if the policyholder Health Group, Inc. et al., (2007, Corporation, et al. vs. Certain can collect the full amount of in- New York), Case No. 07-0506 Underwriters at Lloyd’s demnity that is due from any in- (SJ), United States District Court, London, (2007, Massachusetts), surer whose coverage is triggered. Eastern District of New York. Case No. SJC-09834, Issue: Mandatory Arbitration. Massachusetts Supreme Court. Tuepker, John and Clare v. UP strenuously argued against Issue: Excess insurance. The State Farm Fire and Casualty, mandatory arbitration in contracts Court requested submission of (2007, Mississippi), Case Nos. for the provision of necessary an amicus curiae brief on the 06-61075 and 06-61076, United medical services. issue of “whether an excess in- States District Court, Southern surer, having provided a follow- District of Mississippi. Schwartz et al. v. Liberty form excess insurance policy, is Issue: Anti-concurrent clause. Mutual Insurance Company, bound by the primary insurer’s This Katrina case involves the (2007, New York), Docket No. 07- determination of the primary “anti-concurrent clause” language 2794-cv (L), 07-2818-cv (CON), policy’s applicability in the in a State Farm policy and the bur- United State Court of Appeals, settlement of a class action den of proof regarding exclusions. 2nd Circuit. suit that exhausted the primary The Court should uphold the Dis- Issue: Prejudice/reserva- policy. The simple answer is trict Court’s opinion finding that tion of rights. The Policy- “YES.” Because Lloyd’s policy the “anti-concurrent causation” holder should not forfeit cov- expressly agreed to “subject” lead-in clause does not preclude erage under the policy when itself to the primary’s insurer’s coverage and imposing the burden the policyholder settles a claim control of the defense and set- on State Farm to prove that the ap- without the insurance com- tlement, it is bound by all good plicability of an exclusion. pany’s authority, after the in- faith determinations made in surance company intentionally the exercise of that control, in- St. Paul Fire and Marine placed it interests adverse to cluding all decisions leading to Insurance Company vs. Brother those of the policyholder by the exhaustion of the primary International Corporation issuing a reservation of rights limits. D/B/A Brother Mall, (2007, and without any showing that New Jersey), Case No. 07-3886,

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the insurance company was lish or Spanish, as contrasted prejudiced by the settlement. to leaving this decision in the hands of the insurer, advances Millers Capital Insurance the legislative goals underlying Company v. Gambone the Arizona Uninsured Motorist Brothers Dev. Co., et al., (2007, Act. (UMA) Pennsylvania), Docket No. 1420 EDA 2007, Superior Court of DeBruyn v.Superior Court Pennsylvania. (Farmers Group, Inc.), (2008, Issue: CGL policies. This case “If you look at most of California), Case No. S161000, involves insurance coverage the important California Supreme Court of California. for property damage resulting appellate decisions on Issue: Efficient proximate from faulty workmanship by an cause; Insurance code sec- insurance law, you will insured contractor and its sub- tion 530. This case presents a see a constant – an contractors. The standard form critical issue regarding the rule general insurance liability pol- amicus brief from United of efficient proximate cause icy (“CGL”) was intentionally Policyholders. UP is and Insurance code section 530 designed to cover the underlying a vital voice standing in the aftermath of this Court’s claims of faulty workmanship. up for the rights of opinion in Julien v. Hartford policyholders.” Underwriters Insurance Com- Simon Wrecking Company – Jeffrey Ehrlich pany (2005) 35 Cal.4th 747. It is Inc., et al. v. AIU Insurance important for this Court to grant Co., (2007, Pennsylvania), Case the petition for review to affirm No. 03-CV-3231, United States that an insurer cannot contract District Court for the Eastern the court on why documents and around Insurance Code section District of Pennsylvania. reports resulting from Market 530 and to clarify the confusion Issue: Pollution exclusion. Conduction Examinations con- in the lower courts about the nar- UP urged the Court to interpret ducted by state insurance regu- row application of this Court’s the “sudden and accidental” ex- lators are discoverable in civil holding in Julien. clusion in favor of coverage and litigation. should estop CNA (the defen- Delgado v Interinsurance dant) from applying the exclu- American Standard Insurance Exchange of the Automobile sion in any way that is incon- Company of Wisconsin, et al, v. Club of Southern California, sistent with its representation to Hon. John E. Davis, Ballesteros, (2008, California), 211 P.3d the State Insurance regulators in L&A, Real Parties in Interest, 1083, Supreme Court of 1970 when it was passed. (2008, Arizona), Case No. CV California. 08-0233-SA, Supreme Court of Issue: Duty to defend. This Arizona. Heritage Healthcare Services, case concerns the proper scope Inc. et al. v. Beacon Mutual Issue: Spanish speaking in- of an insurer’s duty to defend its Insurance Company et al., sureds. When there are multi- insured in circumstances indi- (2007, Rhode Island), Case No. ple forms available to insurance cating that the insured may have 2002-7016, State of Rhode Island companies, as is the case here, acted in self-defense. United Superior Court, Providence. the option to use one or the other Policyholders takes the position Issue: Discovery of mar- should be made by the insured, that whenever the lawsuit con- ket conduct examinations. not by the insurance company. tains factual allegations or ex- United Policyholders briefed Giving the insured the option trinsic evidence from which the to select the form in either Eng-

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insurer can infer that the insured LA Sound USA, Inc., et al.v. Issue: Excess insurance. UP may have acted under the appre- St. Paul Fire & Marine Ins. took that the position that where hension, even if erroneous, that Co., (2008, California), Case a policyholder settles with a pri- he or she may be in danger, the No. S159342, Supreme Court of mary insurance for less than the insurer has a duty to defend. California. full amount of the policy, the Issue: Rescission. UP argued policyholder may still collect Everett v. State Farm General that the underlying decision im- from its excess insurance com- Insurance Company, (2008, properly provided the insurer pany if a judgment is rendered California), Case No. E41807, with a means to rescind policies or a settlement reached for more Court of Appeal, Fourth Appellate and thereby avoid its policy ob- than the limit of the primary District, Division 2, California. ligations without first demon- policy. Issue: Underinsurance. Ever- strating that the insured intended ett puts the onus on people who to defraud the insurer. Safeco Insurance Company are not trained or competent to of America v. Parks, (2008, set policy limits. They and count- Medina v. Safe-Guard Products California), Case No. B199364, less California homeowners who International, Inc., (2008, Court of Appeal, Second will be impacted by future wild- California), Case No. G038816, Appellate District, California. fires and other natural disasters Court of Appeal, Fourth Appellate Issue: Duty to disclose bene- will be irreparably harmed by District, Division Three, California. fits. 10 Cal. Code Regs. Section the continued publication of the Issue: Unlicensed insurers. 2695.4(a) mandates that when a Everett decision. Everett v. State UP requested depublication of a claim is made to the insurer, the Farm ignores long held Califor- case on the ground it would un- insurer must “disclose . . . all nia law and has already begun dermine the enforcement of Cali- benefits, coverage, time limits to exacerbate the problem of un- fornia’s insurance licensing laws or other provisions of any insur- derinsurance. This court should in two ways: 1) purchasing unli- ance policy issued by that in- depublish the opinion so insur- censed insurance does not con- surer that may apply to the claim ers cannot use it to shield them- stitute “injury fact” a necessary presented by the claimant. In selves from fulfilling the prom- perquisite for standing for pri- this case UP argued that the stat- ises made to their insureds. vate plaintiffs to bring a lawsuit ute should be applied as written. under Business and Professions The only entity in the tripartite Fairbanks v. Superior Court Code section 17200. This would, relationship between a liability of California, Farmers New in fact, abrogate the “unlawful” claimant, an insured and the in- World Life Insurance Co., et al, prong of (2 decision suggests in surer who has the expertise and real parties in interest, (2008, dictum that only rescission, not the information to locate any California), Case No. S157001, restitution is available as a rem- and all policies potentially ap- Supreme Court of California. edy which means that unlicensed plicable to the loss is the insurer. Issue: Consumers Legal insurers will be able to use Me- Remedies Act. UP argued that dina to argue that they should be Sigelman et Lawyers Mutual the provisions of the CLRA, able to keep most of their ille- Insurance Company, (2008, Civil Code Section 1750, et seq. gally obtained premium revenue. California), Case No. D050783, which prohibit “unfair methods Court of Appeal, Fourth Appellate of competition and unfair or de- Qualcomm,Inc. v. Certain District, Division 1, California. ceptive acts or practices” in the Underwriters at Lloyd’s, Issue: Post-claims under- sale or lease of “goods or servic- London, (2008, California), Case writing. UP weighed in to es” to consumers should apply No. S163293, California Supreme challenge the rescission of a to the sale of insurance. Court. malpractice policy for alleged

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misrepresentation on an applica- Know-Keene Act does not im- tion where the policy had been munize insurance companies in force for seventeen years. from bad faith liability. To allow an insurer to delegate its Village of Northridge implied covenant obligations Homeowners Association vs. would effectively allow insurers State Farm Fire & Casualty, et to eliminate its bad faith liabil- al., (2008, California), 50 Cal.4th ity. Absent the threat of bad faith 913, California Supreme Court. liability, an insurer has little in- Issue: Standing to assert “The amicus briefs centive to afford policy benefits. fraud in connection with a submitted by United settlement agreement. After Policyholders play Penzer, Michael, etc. v. settling a first party claim by ac- Transportation Insurance an important role in cepting money from and execut- Company, (2008, Florida), 29 advancing public policy ing a release of the insurer, UP So.3d 1000, Florida Supreme argued that the insured had stand- in the courts, helping to Court. ing to sue the insurer for fraud offset the sophisticated Issue: Advertising injury; in inducing the settlement and and persistent amicus duty to defend. Insurance seek to avoid the release without efforts of insurance companies have a duty to de- returning the money the insurer organizations and fend violations of the Tele- paid. In negotiating the settle- associations. I am phone Consumer Protection Act ment of not only the litigation, proud to have been (TCPA) under a CGL policy’s UP argued that the insurer, State part of the fine work of “advertising injury” clause even Farm, had the duty to tell Village United Policyholders in when the facsimile transmission Northridge of the true policy lim- advocating for the rights does not disseminate private in- its. By failing to do so, the insurer of policyholders across formation. Despite the absence violated its duty of good faith the country.” of private information, an un- and fair dealing, its obligations – Tim Law solicited facsimile arguably can under section 790. 03(h) (1) and still constitute an unwarranted the mandates of section 2695.4(a) intrusion and violation of one’s and was therefore barred from as- right to privacy and activate the serting the settlement agreement Watanabe v. Blue Shield, (2008, insurer’s defense obligation. as a bar to the insured’s fraud California), Case No. B195725, claim. Although California’s pub- Court of Appeal, Second Morrill and The Estate of John lic policy of enforcing settlement Appellate District, Division 8, Prestiss v.Cotton States Mutual agreements is important, it is not California. Insurance Company, (2008, inviolate. UP argued that where Issue: Implied covenant du- Georgia), Case No. A08A1391, an insurer commits fraud in pro- ties. Blue Shield of Califor- Court of Appeals of Georgia. curing a settlement—in violation nia tried to shield itself from Issue: Statute of limitations. of it duty of good faith and fair bad faith liability by claiming Insurer attempted to apply con- dealing, and in violation of statu- that Maria Watanabe’s benefits tractual one year statute of limi- tory mandates, the public policy were denied by a medical group tations in contravention of the supporting enforcement of settle- which had a contract with Blue public policy of Georgia, as ments must give way to the policy Shield. But California law is established by statute and prec- of holding insurers responsible clear: an insurer cannot delegate edent allowing policyholders for their contractual obligations. its implied covenant duties. The two years from the date of loss

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to file suit. The trial court erred the lower court ruling intact and Issue: Consequential dam- by (1) applying the time –limita- take the position that an insurer ages. The policyholder sought tion provision to a liability claim should be held liable for the en- consequential damages for the that is no subject to this provi- hanced statutory penalties of loss of its business as a result sion, (2) ignoring current insur- La.Rev. Statute section 22:658 of the insurance company’s re- ance laws, regulations, and pub- when bad faith conduct contin- fusal to make timely payment . lic policy, and (3) refusing to let ued after the amendment to the The trial court refused to award a jury decide whether estoppel statute was enacted. consequential damages. United and waiver apply in this case. Policyholders argued that such Corban v. United Services damages are routinely awarded Landry et al., v. Louisiana Automobile Association a/k/a in breach of contract cases, in- Citizens Property Insurance USAA Insurance Agency, (2008, cluding cases involving breach Company, (2008, Louisiana), Mississippi), 20 So.3d 601, of an insurance policy, and that Docket No. 2007-C-1908, Supreme Court of Mississippi. under the venerable Hadley v. Supreme Court of Louisiana. Issue: Anti-concurrent cause. Baxendale decision, such dam- Issue: Valued policy law. Addresses numerous issues: ages were foreseeable given Valued policy law requires the 1). In an “all risk” policy, once the nature of the policy at issue. insurer to make full payment to the insured proves that “a direct Moreover, even though the con- the insureds regardless that the physical loss” was sustained, the sequential loss exclusion barred total loss was a result of a com- insurer has the burden of proof coverage for certain losses, it bination of covered and exclud- to establish what portion of the did not bar a court from imposed perils under the insurance “direct physical loss” was caused ing the remedy of consequential policy so long as the efficient by a specifically excluded event damages. proximate cause of the loss was or cause. 2.) With a Katrina loss, a covered peril. which contains components of ACE American Insurance both wind and flood, the insurer Company, v. Underwriters at Sher v. Lafayette Insurance should still have the burden of Lloyds and Companies, et al., Company et. al., (2008, proving, through non-speculative (2008, Pennsylvania), Case No. Louisiana), Docket No. 2007- evidence that personal property 45 EAP 2008, Supreme Court of C-2441 consolidated with damage was caused by a specific Pennsylvania. 2007-C-2443, Supreme Court of exclusion. 3.) If the court finds Issue: Errors and omissions; Louisiana. the anti-concurrent clause is not late notice. If an insurance com- Issue: Flood exclusion. The ambiguous, it should rule that pany attempts to avoid its cover- Shers had an “all risk” policy wind and water damage are sepa- age obligations under a claims- which extends coverage for rate and only the “flood” damage made policy due to “late notice,” all fortuitous losses, unless the is subject to the exclusion. 4) If the insurance company must bear policy contains a specific exclu- the policy contains Additional the burden to prove that notice sion. A lower court considered a Coverage for “collapse” the pol- was late, just like under an oc- “flood” exclusion in the Lafay- icy’s exclusion for “water dam- currence policy. Even when poli- ette all-risk policy and found it age” should be inapplicable. cies are drafted to require a poli- too ambiguous to exclude cov- cyholder to report a claim to the erage for Katrina damage to a Bi-Economy Market, Inc., v. insurance company within the home. The case also addressed Harleysville Insurance Co. of policy period or within a certain continuing duty of good faith New York, (2008, New York), number of days thereafter, the and fair dealing. United Policy- 2008 NY Slip Op 01418, New insurance company still should holders urges the Court to leave York Court of Appeals. be required to prove that notice

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was provided late and that the Issue: ERISA. This case in- insurance company was materi- volved the denial of benefits to a ally prejudiced by the delay. Al- disabled insured. lowing an insurance company to collect full premiums yet refuse Metropolitan Life Insurance coverage based on mistake or v. Glenn, (2008, United States), technicality where the insurance Case No. 06-923, Supreme Court company cannot demonstrate of the United States. that it would have acted materi- Issue: ERISA. United Policy- ally differently had it received “The United holders’ brief addressed the first notice earlier or that its costs will Policyholders’ Amicus question certified for review now be higher simply “is unduly Project is essential for by the United States Supreme severe and inequitable.” leveling the playing field Court: “Whether an administrator that both evaluates and pays between policyholders American and Foreign claims under a plan governed and insurers. It allows Insurance Company v. Jerry’s by the Employee Retirement In- Sport Center, Inc., (2008, policyholders of all come Security Act (ERISA), 29 Pennsylvania), 88 MAP 2008, sizes to benefit from U.S.C. 1001 et seq., is operating Supreme Court of Pennsylvania. insurance coverage under a conflict of interest that Issue: Duty to defend. A expertise normally must be weighed on judicial re- claim is potentially covered, available to only the view of a benefit determination.” thus triggering the duty to de- largest corporations.” fend, when there is uncertainty – Lee Epstein Plastics Engineering Company as to coverage. Once this un- v. Liberty Mutual Insurance certainty is eliminated through Company, (2008, Wisconsin), a declaratory judgment action it Case No. 2008AP333, Wisconsin does not retroactively eliminate tom and usage in the insurance Supreme Court. the ambiguity that triggered the industry, particularly where evi- Issue: Occurrence; alloca- insurer’s duty to defend during dence regarding trade usage pro- tion of risk. Because the inci- the period of uncertainty. vides the basis for interpreting dent giving rise to liability was the language in the policy. It is each individual plaintiff’s con- AstenJohnson Inc., v. Columbia essential that policyholders have tinuous or repeated exposure to Casualty Co; American the opportunity to take broad asbestos and not the business Insurance Company, (2008, discovery on matters relating to decision to manufacture asbes- Pennsylvania), Case No. 07-2305, custom and usage in the insur- tos or a failure to protect against United States Court of Appeals, ance industry. Insurance com- their alleged hazards, the only 3rd Circuit. panies should not be allowed to plausible way to interpret “oc- Issue: Asbestos exclusion. adopt an interpretation that ren- currence” is that it refers to the Policyholders should have the ders a policy provision mean- immediate proximate cause of right to select the policies un- ingless. each claimant’s injuries. There- der which they seek coverage, fore, the Court should conclude without fear of prejudice to any Jewell v. Life Insurance that each underlying claimant’s Laches or Course of Perfor- Company of America, (2008, exposure to asbestos consti- mance Argument. Courts should United States), Case No. 07-1121, tutes a separate “occurrence.” not hamstring a policyholder’s Supreme Court of the United (2) The Court should also hold efforts to obtain evidence of cus- States. that each CGL policy triggered

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by an asbestos claim must pay stood (meaning a sufficiently Randal D. Haworth, M.D. v. “all sums” up to its policy lim- concrete and direct interest). Superior Court of Los Angeles its, subject to the insurer’s right Moreover, the Kwikset court’s County; Real Party in Interest, to seek contribution from other stringent requirements are dif- Susan Amy Ossakow, (2009, insurers whose policies are also ficult enough to prove with evi- California), 50 Cal.4th 372, triggered. dence, much less to allege at the California Supreme Court. pleading stage, before discov- Issue: Disclosure require- Hyundai Motor America v. ery, when standing is often de- ments. Neutral arbitrators, as National Union fire Insurance termined. If Kwikset is the law, well as sitting judges, should Company, (2009, California), the negative impact on Califor- be required to disclose the facts Case No. 08-56527, United States nia’s false advertising prohibi- and circumstances of a previ- Court of Appeals, 9th Circuit. tions will be substantial. ous censure. The disclosure Issue: Duty to defend, adver- requirements for neutral arbitrators are critically important tising injury. UP argued that Meyer v. Sprint Spectrum L.P., the district court erroneously (2009, California), 45 Cal.4th because they affect the ability held that an “advertising injury” 634, California Supreme Court. of insurance consumers to ob- insured under the CGL policies Issue: Consumers Legal Rem- tain a fair and reasonable re- at issue did not include “an in- edies Act. UP weighed in to urge covery of the policy benefits jury caused by patent infringe- the Court to revisit its decision for which they have paid years ment even if that injury occurs holding that the Consumers Legal of premiums. Decisions by ar- during the course of an advertis- Remedies Act, Civil Code section bitration panels go to the core ing activity.” We argued that the 1770 et seq (“CLRA”) does not of the insurer/insured relation- district court also failed to prop- authorize peremptory challenges ship. The reputation of the ju- erly apply the California Rules to provisions in an agreement to diciary—the perception of the governing the interpretation of foreclose the public civil justice public as to the honesty and insurance policies, including the system (e.g., through arbitration) integrity of the judicial pro- requirement to interpret ambigu- and which are unconscionable cess—is of utmost importance. ous insurance policy language in under California law. UP and It is not enough to simply a manner that protects the objec- other amici argued the decision mouth the standard. It is criti- tively reasonable expectations clearly ignored the statute and cal to enforce it. of the insured. the breadth of all its provisions and eviscerated the language and State of California v. Kwikset Corp. v. S.C. (Benson), scope of the CLRA, despite the Continental Insurance (2009, California), 51 Cal.4th statute’s plain language and its Company, (2009, California), 310, California Supreme Court. express command that is provi- Case No. S170560, California Issue: Standing. Under Kwik- sions be viewed liberally. Joining Supreme Court. set the courts will not be open United Policyholders in urging Issue: Various coverage issues related to environmen- to challenge a falsely advertised the Court to grant a rehearing was tal liabilities under multiple product unless the plaintiff also the Center for Responsible Lend- CGL policies. UP briefed nu- alleges and proves a defect in ing, Consumer Action, Consumer merous coverage issues in this the product, or that cheaper al- Watchdog, Consumers for Auto complex proceeding that in- ternatives were available, or that Reliability and Safety, The Na- volved environmental liabili- the product was not “worth” tional Association of Consumer ties, “all sums” provisions, pol- what the consumer paid. This Advocates, the National Con- lution exclusions, “stacking”, has nothing to do with standing sumer Law Center, and Public lost policies. as that concept is usually under- Citizen.

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Superior Dispatch v. Insurance UP requests that the Court find Corporation of New York, that a claim for breach of the im- (2009, California), Case No. “The reason that plied warranty of good faith and B204878, Court of Appeal, Dickstein Shapiro fair dealing in the first party in- Second Appellate District, and I support United surance context exists in Florida Division 3, California. Policyholders and common law. Issue: Effect of insurer’s volunteer our time to code violations on its ability write amicus briefs is to Demolition Contractors, Inc. to assert a contractual suit assist other policyholder d/b/a Pitsch Wrecking Co. v. limitation. UP argued that an Westchester Surplus Lines counsel on insurance insurer’s violation of Sections Insurance Company, (2009, matters of importance 2695.4 and 2695.7 of the Cal. Michigan), Case No. 09-1582, Code of Regulations meant it that have a larger United States Court of Appeals, was estopped to assert the con- impact than on simply 6th Circuit. tractual limitations period. The upon their own client. Issue: Voluntary payments; plain meaning of the regulations The positions that we no action clause. Do “volun- commands an insurer to give articulate usually are tary payment” and “no action” the claimant (first or third party) opposed by an army terms bar payment by insurance notice of time limits that ap- of insurance company company? Courts in Michigan ply to the claim. The violations lawyers who often and throughout the United States of the regulations occur when seek to overwhelm have held that, with regard to the insurer denies the claim but the sole attorney for coverage, it makes no difference chooses not to inform the claim- the policyholder. It is whether a policyholder volun- ant about the applicable time important for courts to tarily cleans up the contamina- limits. An insured’s act of con- understand that their tion for which it is responsible before the government demand sulting a lawyer months later rulings do not only does not reverse the violation or or until after the governmental impact the interests of relieve the insurer of the conse- intervention. Expenditures for the insurance industry quence of the violation. Equity, environmental clean-up and re- fairness and plain-dealing will and to provide the extra mediation do not constitute vol- not be fostered if the regulations support and backup for untary payments for a company are interpreted to render viola- the policyholder lawyer facing liability. Further, in the tions retroactively meaningless pursuing his client’s absence of prejudice, a volun- if the insured fortuitously con- interests.” tary payment clause will not bar sults an attorney after denial of – Stephen Goldberg a policyholder from recovering the claim. from their insurance company. The “no action” clause functions to bar third party claims. It does QBE Insurance Corporation Florida law recognizes a claim v. Chalfonte Condominium not prevent policyholders from for breach of the implied warran- Apartment Association, Inc., suing their insurance companies. ty of good faith and fair dealing. (2009, Florida), Case No. SC09- Making an insurer accountable 441, Florida Supreme Court. for causing additional damag- Merrick vs. The Paul Revere Issue: Implied warranty of es that naturally flow from the Life Insurance Company, et al, good faith and fair dealing; breach of its mandated obligation (2009, Nevada), Case No. 08- consequential damages. This of utmost good faith is good pub- 17742, United States Court of case concerned whether or not lic policy and logically required. Appeals, 9th Circuit.

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Issue: Punitive damages. In suit for “personal injury adver- situations where insurers ignore tising injury.” Using the “com- the law and abandon the princi- parison test” the court must read ples of good faith and fair dealing the pleading side-by-side with in a persistent manner, meaning- the insurance policy to deter- ful punitive damage awards are mine whether any allegations in justified to temper the behavior of the complaint could possibly be a member of this quasi-public in- covered. In order for the failure dustry. A punitive damage award to conform exclusion to apply, must be sufficient in size to de- “United Policyholders’ courts have held that the under- ter an insurer from committing Amicus Project sheds lying complaint must contain similar reprehensible acts to the specific allegations that the pol- needed light on public plaintiff and to society through icyholder failed to conform to policy issues affecting a course of dealing that damages the quality or performance ad- insurance consumers others in the same way. Wealth of vertised. Even if a policyholder the defendant remains an appro- nationwide.” is accused of mischaracterizing priate consideration when review- – Jean Gerbini its own products in advertising, ing a punitive damages award. the failure to conform exclusion does not apply if the poli- Griffith Oil Company, Inc. V. cyholder allegedly disparages, National Union Fire Insurance No. 602472/05, Supreme even implicitly, its competitor’s Company of Pittsburgh, (2009, Court, Appellate Division, 1st products. Only where the un- New York), Docket Nos. CA 08- Department, New York. derlying complaint alleges the 00930 and CA 08-02656, Supreme Issue: Bad faith; consequen- policyholder misrepresented its Court, Appellate Division, 4th tial damages. UP argued that own products and its misrep- Department, New York. a Decision and Order of the Su- resentations did not implicitly Issue: Products completed preme Court, New York Coun- disparage a competitors prod- operations hazard. UP urged ty, should be reversed to the ucts have courts applied the the Court to reverse a lower limited extent that it implicitly failure to conform exclusion. court’s ruling that a Products required the Plaintiff to prove Completed Operations Hazard bad faith in order to recover Pennsylvania General Insurance provision included an unduly re- consequential damages. Co. vs. Park-Ohio Industries, strictive condition that the poli- Inc., (2009, Ohio), Case No. cyholder physically possesses its Harleysville Mutual Insurance 2009-0104, Supreme Court of product prior to the occurrence. Company vs. Buzz Off Insect Ohio. The plain language of the insur- Shield, (2009, North Carolina), Issue: Multiple policies. UP ance policy, and the fundamen- Case No. 272A08, Supreme Court joined with the Ohio Manufac- tal purpose behind the provision, of North Carolina. turers Association (OMA), in and the reasonable expectations Issue: Scope of “failure to presenting the perspective that of the policyholder did not sup- conform” exclusion/duty when a claim triggers multiple port such a requirement. to defend suit for personal policies, the policyholder can injury advertising injury. UP choose to recover under any of argued that a policyholder’s ul- Panasia Estates, Inc. v. Hudson its policies providing coverage Insurance Company and UTC timate liability has no bearing for all sums that it was legally Risk Management Services, on the determination of whether obligated to pay, up to the pol- Inc., (2009, New York), Index an insurance company must de- icy limits. fend the policyholder against a

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Strawn, Mark v. Farmers estimates, a loss inventory, tax Insurance Company of Oregon, returns, and bank and cell phone Mid-Century Insurance records and been examined under Company and Truck Insurance oath by the insurer’s attorney. We Exchange, (2009, Oregon), Case argued that while the inadequacy No. S057520, Supreme Court of of this documentation might have Oregon. been proven in a trial on the mer- Issue: Punitive damages. In its, allowing her claim to be for- order to assure that a punitive feited via summary adjudication damages award fulfills the pur- “Now more than ever it on these facts set a dangerous pose of deterrence and retribu- precedent. tion, due process considerations is critical that the United for assessing the constitutional Policyholders and its Amicus Project survive Cussler v. Crusader validity of a punitive damages Entertainment, LLC, (2010, and prosper. People award must include consider- California), Case No. S181428, who buy insurance are ation of the defendant’s wealth. California Supreme Court. LM Ericsson Telefon AB typically good citizens, Issue: Covenant of good and Ericsson Inc., v. Certain who properly protect faith and fair dealing. UP ar- Underwriters At Lloyd’s, themselves against gued that the Court of Appeal’s (2009, Texas), Case No. London, the risk of catastrophe. reversal of a jury verdict threat- 09-0012, Supreme Court of Texas. They are usually not ens the most basic expectation Issue: Application incorpo- malingerers trying to of a contracting party—that the rated into policy contract. unfairly beat the system. other party will not act in bad This case addresses what it The Amicus Project faith to deprive it of the benefit means when an insurance con- of its bargain. This issue is of tract incorporates by reference affords deserving particular importance because and makes the insured’s policy insureds the chance insurance contracts routinely application a part of the policy to prevent callous and grant discretion to insurance of insurance. hypertechnical denials, contrary to the real companies, and insureds rely on that discretion being exercised expectations of the McReynolds, Michael v. in good faith. American Commerce Insurance parties.” Co., (2010, Arizona), Case No. – Chipman Miles CV-10-0288-PR, Supreme Court Davis v. Ford Motor Credit (2010, California), of Arizona. Company, Case No. S179049, California Issue: Interpleader; duty of Supreme Court. good faith. Whether an insur- Issue: Duty of cooperation. ance company’s filing of an “in- UP weighed in to request depub- Issue: Standing. Resolves the terpleader” in a multiple claim- lication of a CA. Court of Appeal important question of what stan- ant case protects the insured’s opinion in a case where Farmers dard should apply when a con- interests and fulfills the carrier’s Insurance Exchange had denied a sumer (as opposed to a business) duty of good faith. total fire loss claim on the grounds brings a claim challenging an al- that the homeowner failed to pro- leged “unfair” business practice in violation of the Unfair Com- Abdelhamid v. Fire Ins. vide sufficient documentation petition Law, Business and Pro- Exchange, (2010, California), to substantiate her claim. The fessions Code section 17200, et 106 Cal. Rptr. 3d 26, California homeowner had provided a no- seq. (“UCL”). Supreme Court. tarized proof of loss form, repair

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L.A. Checker Cab Cooperative Company and Amerisure Henner, Michael and Elizabeth, Inc. v. First Specialty Insurance Insurance Company, (2010, v. Gemini Insurance Co., (2010, Company, (2010, California), Florida), Case No. 10-10960G, New York), Docket Nos. CA 09- Case No. B213948, Court United States Court of Appeals, 01832 and CA 09-01833, Supreme of Appeal, Second Appellate 11th Circuit. Court, Appellate Division, 4th District, California. Issue: Scope of property Department, New York. Issue: Intentional acts exclu- damages. Whether the negli- Issue: Notice/Prejudice rule. sion. Whether an employer is de- gent installation of non-defective UP advocated for a fair result for prived of coverage for its vicarious materials and components consti- a homeowner that had to clean liability for the act of an employee tutes covered “property damage” up an oil spill caused by a third if the employee acted intentional- under the standard CGL policy. party contractor that refused to ly. The Court of Appeal held that tender defense of the clean up because the employee’s act was Southern Realty Management, claim to its insurer. intentional, the employer could Inc. et al. v. Aspen Specialty not satisfy the portion of the “oc- Insurance Company, et al., Hussey Copper, Ltd. v. currence” definition that required (2010, Georgia), Case No. 10- Arrowood Indemnity Company, the injury to be “accidental.” 11513, United States Court of f/k/a Royal Insurance Appeals, 11th Circuit. Company of America, (2010, MacKay v. Superior Court of Issue: Prejudice; post-claims Pennsylvania), Case No. 09-4037. Los Angeles (21st Century underwriting. Issues involved: Issue: Pollution exclusion. UP’s National), (2010, California), (1) whether insurance company letter addressed the meaning of Case No. S188184, California must be prejudiced in order for the absolute pollution exclusion Supreme Court. there to be material breach of and how it affects policyholders Issue: Effect of regulatory the cooperation clause such that throughout the nation. Insurance approval of insurance rate it bars coverage and (2) whether policies are often the only viable filings. The issue in this case re- the insurance company’s denial source of defense and indemnifica- lated to whether insurers should of claim constitutes impermis- tion. The absolute pollution exclu- have immunity for statements sible post-loss underwriting. sion undercuts coverage that poli- made in rate filings by operation cyholders had bought and relied of the regulator having approved Diebold, Incorporated v. upon. If misapplied, as in this case, the filings. Continental Casualty Company, the absolute pollution exclusion (2010, New Jersey), Case No. can deny coverage that policyhold- Nieto, Julie v. Blue Shield 10-3184, United States Court of ers purchased and badly needed. of California Life & Health Appeals, 3rd Circuit. UP asked the Court to hold that Insurance Company, (2010, Issue: Scope of a policy pro- the completed-products operations California), Case No. S180631, vision relating to discovery. clause trumps the absolute pollu- California Supreme Court. UP argued that the trial court’s tion exclusion. Issue: Health insurance/post- ruling ignored the drafting his- claims underwriting. UP sup- tory and intent of the specific Advanced Environmental ported review of a decision that discovery provision and was in- Recycling Technologies, Inc. related to the effect of statements consistent with New Jersey law v. American International made by a consumer on a health in that the trial court interpreted Specialty Lines Insurance Co., insurance application. a policy provision in a way that (2010, Texas), Case No. 09- eliminated coverage as opposed 11075, United States Court of Amelia Island Company v. to an interpretation that would Appeals, 5th Circuit. Amerisure Mutual Insurance find coverage. Issue: Coverage and exclusions in an Umbrella policy.

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This appeal addresses two issues loss should be deemed a waiver of importance to policyhold- of the right to compel appraisal. ers across the country: (1) can “property damage” to the in- Pendergest-Holt, Laura, sured’s “product” be considered Stanford, R. Allen, Lopez, an “accident” or “occurrence” Gilbert Jr. and Kuhrt, Mark v. for purposes of coverage under Certain Underwriters at Lloyd’s an umbrella liability policy; and of London and Arch Specialty (2) do exclusions in an underly- Insurance Company, (2010, ing primary policy apply to the Texas), Case No. 10-20069, “UP’s Amicus Project United States Court of Appeals, true umbrella (as opposed to gives lawyers from all follow-form) coverage available 5th Circuit. over a chance to come under an umbrella policy. Issue: Duty to pay defense together as a group and costs. The application of the speak as one.” “eight corners” rule to an insur- Citigroup, Inc. v. National – Ron Dean Union Fire Insurance Co. et. ers duty to advance defense costs al., (2010, Texas), Case No. 10- in a “Directors and Officers” 20445, United States Court of context. UP presented arguments Appeals, 5th Circuit. to the court to show how the car- Issue: Primary/excess set- found that any time an insured riers position would defeat the tlements. UP briefed the is- enters into a contract with another purpose of D&O coverage. sue of whether the public policy party, the insured assumes liabil- favoring settlements is violated ity in such contract, which plac- CIGNA CORP. et al v. AMARA et where an excess insurance car- es any breach of contract claim al., individually and on behalf rier denies coverage to a poli- within the terms of the exclusion. of all others similarly situated, cyholder who settles with its In other words, the Court rejected (2010, United States), Case No. primary insurance company for the argument that the contractual 09-804, Supreme Court of the an amount below the primary in- liability exclusion requires the United States. surance company’s limits. assumption of liability of another Issue: Conflicting plan docu- in the contract. This holding has ments/ERISA. UP weighed in huge ramifications as there are along with three other organiza- Gilbert Texas Construction, L.P. v. Underwriters at Lloyd’s plenty of times when contracting tions to advance the position that London, (2010, Texas), Case No. parties are limited to contractual where there is a conflict between 08-0246, Supreme Court of Texas. claims (e.g., economic loss rule). plan documents, the one that Issue: CGL policies. The Court The Court, by its own admission, favors plan participants should held that the standard “contrac- adopted the minority view. control, or, in the alternative, tual liability” exclusion found SPD documents. Participants in the CGL policy essentially is In re: Universal Underwriters should not be obliged to estab- a “breach of contract” exclusion Insurance Company, (2010, lish detrimental reliance, likely applicable anytime a liability de- Texas), Case No. 10-0238, harm, or anything beyond a fense, e.g., statute of limitations Supreme Court of Texas. clear conflict between two plan or economic loss rule, eliminates Issue: Appraisal clauses/ documents. a negligence cause of action, Waiver & Estoppel. Delay by leaving only a breach of contract an insurance company in invok- Hardt, Bridget v. Reliance claim against the insured. In doing appraisal after the insurer is Standard Life Insurance ing so, the Court more or less aware that there is a disagree- Company, (2010, United States), ment about the amount of the Case No. 09-448, Supreme Court

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of the United States. Issue: The “contract-tort” Issue: ERISA. This case involved distinction in CGL policies. Supreme Court precedent relating UP addressed whether the con- to prevailing party status under tract-tort distinction should ap- fee-shifting statutes. UP argued ply to control coverage under a that Social Security disability ben- standard form commercial gen- efit claimants who win remands eral liability (“CGL”) insurance are entitled to fees regardless of policy and the intended scope of whether they ultimately prevail the contractual liability exclu- in securing an award of benefits. “Part of what makes our sion in a CGL policy. Given the similarity in nature judicial system unique of ERISA remands, no logical is the access to justice Hakimfar et al. v. ROC Design, ground exists to distinguish the it can provide even to Inc. et al., (2011, California), availability of fee awards under those without substantial Case No. B228541, Court ERISA from the well-established resources, and the of Appeal, Second Appellate law relating to EAJA [Equal Ac- way in which important District, California. cess to Justice Act, 28 U.S.C. sec- Issue: Conflicts of interest decisions – affecting tion 2412(d)(1)(A). that arise where defense not just the rights of the counsel is appointed by an parties to a particular United States Fidelity and insurer that has issued a res- Guarantee Co. vs. United case, but many others in ervation of rights letter. UP States Sports Specialty similar circumstances – briefed the fact that this conflict Association, (2010, Utah), Case can be made in virtually scenario is repeated over and No. 20090657-SC, Utah Supreme any case. The importance over again to policyholders’ det- Court. of an organization like riment but rarely comes to light Issue: Insurer’s right to re- United Policyholders, and due to confidential settlements. imbursement. UP briefed the the value of its Amicus issues of: 1) whether an insurer Project, is that they can Villa Los Alamos Homeowners’ has a right to reimbursement or identify those cases Association vs. State Farm restitution against an insured (of making their way through General Ins. Co., (2011, amounts paid in settlement). 2) the courts that may California), Case. No. A128443, Whether an insurer has a right Court of Appeal, First Appellate result in critical decisions to reimbursement or restitution District, Division 4, California. affecting the rights of against an insured (for settle- Issue: Pollution exclusion. all policyholders. United ments), and whether there are This case involved a “total pollu- any prerequisites to receiving Policyholders can then tion exclusion” akin to--though such a right. 3) If such a right offer its considerable with significantly different facts does exist, whether an insurer’s expertise, knowledge than--the Cold Creek Compost payment in excess of a policy’s base, and other resources case. In this matter, a homeown- limit impacts any such right. to the court, through the ers association hired a contractor Amicus Project, to help to scrape acoustic ceilings, re- Desert Mountain Properties ensure that fair and just sulting in a one-time, accidental Limited v. Liberty Mutual Fire decisions are made.” and localized release of asbestos Insurance Company, (2011, – Kim Card in and around the building. State Arizona), Case No. CV-10-0339- Farm sought summary adjudica- PR, Supreme Court of Arizona. tion, arguing that the total pol-

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lution exclusion barred cover- nify an insured impacts its right Women’s Integrated Network, age for such a claim. UP briefed to assert coverage limitations. Inc v. U.S. Specialty Insurance the issue of whether under the Company, (2011, New York), MacKinnon case, the total pollu- Thomas Woodhams and United States District Court, tion exclusion would be reason- Charlene Connors v. Allstate Eastern District of New York. ably understood by a layperson Fire and Casualty Company, Issue: Coverage for con- to exclude coverage for the one- (2011, New York), Case No. tractual damages under an time, localized, accidental re- 10-4389, United States Court of Employment Practices Li- lease of unknown asbestos dur- Appeals, 2nd Circuit. ability policy. UP contested ing a routine ceiling scraping. Issue: 180 day policy. UP ar- and offered authority to contro- gued that it is not reasonable vert a Court’s blanket holding Arceneaux, et al. v. Amstar to uphold language in property that an Employment Practices Corp, et al., (2011, Louisiana), policies that deprives insureds Liability Insurance Coverage Case No. 2010-c-2329, Supreme of full replacement cost benefits policy does not cover contrac- Court of Louisiana. where they cannot complete re- tual damages. Issue: Duty to defend. UP ar- pairs/replacement within 180 gued that an insurer’s breach of days of a loss. the duty to defend and/or indem-

Acknowledgements This report was prepared by Amy Bach, Esq., Co-Founder and Executive Director of United Policyholders and Alice J. Wolfson, Esq., Chair of the Board of Directors of United Policyholders with assistance from Izak Feldgreber, ILSS Man- ager at the law firm of Anderson, Kill & Olick, P.C., Joyce Lee, Emily Cabral, Paige Labourdette and Lucien Sonder.

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