The New York Court of Appeals which had historically required pro rata allocation, for the first time adopted an all sums allocation that allowed policyholders to pick and choose which years it wanted to triggered and therefore could avoid insolvencies, a multi-billion dollar issue for the insurance industry.
Counsel to Warren Pumps LLC in a case seeking coverage from more than a dozen insurance companies for thousands of asbestos-related claims. The firm’s lawyers have secured several high-profile courtroom victories for Warren, including a decisive jury verdict worth hundreds of millions of dollars, and landmark decisions from the New York Court of Appeals on the allocation of long-tail claims, and the Delaware Supreme Court on critical issues, including assignment of policy rights and the trigger of coverage, which have allowed Warren to access more than $500 million dollars in asbestos insurance coverage limits.
The Southern District of New York issued the first decision in the country upholding insurance coverage for a spoofing e-mail fraud under cyber-insurance policies, which was affirmed by the Second Circuit.
Counsel to Medidata Solutions Inc. in securing a Summary Judgment ruling from the U.S. District Court for the Southern District of New York allowing Medidata to access coverage under a Federal Insurance Co. commercial crime insurance policy for a loss that the company suffered as a result of a computer fraud incident. The decision is one of the first involving coverage for email “spoofing,” a threat faced by many companies, in which fraudulent transfers of money are induced by emails to employees that appear to be from the email accounts of senior company officers, but are sent by the perpetrators of the fraud with replies routed back to accounts the perpetrators control.
The Delaware Supreme Court clarified disputed precedent by affirming the Superior Court’s ruling confirming that settlements of civil disgorgement actions are insurable.
Counsel to Teachers Insurance and Annuity Association of America (“TIAA”), College Retirement Equities Fund (“CREF”) and other related entities (collectively, “TIAA-CREF”) in an insurance coverage lawsuit filed in Delaware Superior Court in May 2014 against certain of TIAA-CREF’s primary and excess professional liability insurers seeking reimbursement of more than $60 million for the costs of defending and settling three class-action lawsuits alleging claims relating to delays in processing account holders’ transfer requests in certain investment accounts. Obtained a landmark decision from President Judge Jan Jurden granting summary judgment to TIAA-CREF on October 20, 2016 (which was further reaffirmed on November 16, 2016, when the court denied the insurers certification of an interlocutory appeal), finding that a civil settlement of a lawsuit involving claims for disgorgement was an insurable loss under New York law, and a jury verdict finding that one insurer waived its consent to settle defense and that TIAA-CREF was entitled to recover 100% of its defense costs as reasonable and necessary. The decision was affirmed by the Delaware Supreme Court on July 30, 2018.
In a first of its kind ruling, the court held that flood sublimits did not apply to limit coverage for Superstorm Sandy’s storm surge losses.
New Jersey Transit Corporation in securing a decisive victory in New Jersey appellate court allowing the company to access up to $400 million in insurance coverage from a group of excess insurance carriers to make much-needed repairs to its property following the devastating impact of Superstorm Sandy. The court rejected the insurers’ attempts to enforce a $100 million “flood” sublimit in the policies finding that Superstorm Sandy met the policies’ definitions of “named windstorm,” for which there is no sublimit.
New Jersey Supreme Court established rule in New Jersey that anti-assignment provisions in insurance policies are not enforceable after a loss has already occurred.
Counsel to Givaudan Fragrances Corporation in securing a victory for corporate policyholders with far-reaching implications in protecting a corporate insured’s right to reorganize its business as it sees fit, without fear of risking the forfeiture of its historic insurance coverage. The unanimous New Jersey Supreme Court decision upheld an earlier appellate court ruling which affirmed Givaudan’s right to seek more than $500 million in insurance coverage for governmental and private claims related to environmental damage to the Passaic River and Newark Bay.
Delaware Superior Court ruling established that civil investigatory demands investigating a policyholder’s potential wrongdoing are covered Claims.
Counsel for Conduent State Healthcare, LLP in securing a ruling that Conduent was entitled to recoup the defense costs that it incurred in responding to civil investigatory demands (or “CIDs”) served on Conduent by the Texas Attorney General’s Office. The CIDs had alerted Conduent, the claims administrator for Texas’s Medicaid orthodontics program, that the state was investigating possible Medicaid fraud and other claims. In its ruling, the Delaware Superior Court rejected the insurer’s contention that the CIDs were not “Claims” alleging “Wrongful Acts,” as is required for coverage. The court recognized a split of authority outside Delaware, but in a case of first impression in Delaware, held that the better authority would recognize the CIDs as Claims for Wrongful Acts.
New York Appellate Court in a first-of-its kind decision, required coverage for costs of responding to government subpoenas.
Counsel to Syracuse University in securing a victory from New York’s Appellate Court stating National Union Fire Insurance Co. of Pittsburgh, Pennsylvania, is liable for defense costs the University incurred responding to and conducting an investigation in connection with a number of state and federal grand jury subpoenas relating to allegations of sexual abuse against its former associate basketball coach, Bernie Fine. In March 2013, the university was awarded initial summary judgment for this particular claim under a Not-For-Profit Individual and Organization Insurance Policy. In December 2013, New York’s Appellate Division, 4th Department, unanimously affirmed this ruling.
Iowa federal court rulings established numerous precedents concerning insurance coverage for construction defect claims.
Counsel to Pella Corporation and various of its subsidiaries against numerous insurance companies in several Iowa federal court actions in which Pella was seeking insurance coverage for more than $50 million in costs incurred in defending and settling more than twenty class action lawsuits alleging that certain Pella windows and doors were defective and, as a result, leaked and caused water damage. As a result of a string of wins on various motions for summary judgment in the Southern District of Iowa, Pella was able to secure a global settlement with its insurers in 2019. Key legal rulings procured for Pella included rulings that (1) “defective workmanship” can give rise to a covered “occurrence,” a hotly contested issue not only in Iowa but nationwide; (2) class action claims gave rise to a single “occurrence,” allowing Pella to aggregate costs to satisfy policy retentions, an issue never before addressed under Iowa law; (3) primary insurer Liberty Mutual owed “all sums” or 100% of defense costs incurred for each occurrence, not just a pro rata share, another issue never before addressed under Iowa law; and (4) claims alleging water damage caused by windows triggered the defense obligation of every primary policy in place from the date the window was installed or potentially could have been installed, another issue never previously addressed under Iowa law and for which there is scant authority anywhere in the country. These rulings will have a national impact, as there is little authority discussing what events trigger defense obligations when windows or other construction products cause water damage that does not manifest for years, and complaints alleging construction defects typically do not allege when damage began.
Delaware Superior Court ruling establishing when defendant directors or officers may be deemed to be acting in their capacities as directors or officers of the policyholder.
Counsel for IDT Corporation in its efforts to recover millions in defense costs incurred in a lawsuit against IDT and its founder, Howard Jonas, filed in the Delaware Court of Chancery (In re Straight Path Communications Inc. Consolidated Stockholder Litigation) by stockholders of Straight Path Communications, Inc. Jonas is the controlling shareholder of IDT and has served as IDT’s Chairman since its incorporation, but also was controlling shareholder of Straight Path, as a result of a 2013 spinoff of Straight Path from IDT. The underlying Straight Path litigation alleges that Mr. Jonas breached fiduciary duties owed to Straight Path by refusing to approve the sale of that entity to Verizon Communications Inc. in 2017, unless Straight Path settled certain claims against IDT. The D&O policies at issue covered IDT for “wrongful acts” committed by IDT directors and officers in their capacities as such. Insurers argued that because Jonas was sued for breaching fiduciary duties owed to Straight Path, as a controlling shareholder of Straight Path, he was not acting in his capacity as an officer or director of IDT. In a January 2019 ruling, the Delaware Superior Court rejected that reasoning. Agreeing with IDT’s counsel, he held that the facts alleged, not the causes of action asserted, control the insurer’s defense obligation and, read as a whole, the complaint alleges, “Jonas took the alleged wrongful actions he did for the benefit of IDT and himself in his capacity as the Chairman of IDT.”
Delaware Superior Court ruling addressing compliance with mandatory “cooling off” periods in insurance policies.
Counsel for Verizon in an insurance coverage action seeking more than $100 million in defense and settlement costs incurred by Verizon in defending against claims related to a series of transactions that resulted in Verizon’s divestiture of certain land line assets that were then purchased by FairPoint Communications, Inc. On April 26, 2019, Delaware Superior Court Judge Eric M. Davis of the Delaware Superior Court rejected certain insurers’ motion to dismiss Verizon’s Delaware action in favor of insurers’ competing New York action. The court grappled with how mandatory litigation “cooling off” provisions should be interpreted and whether failing to strictly adhere to such provisions required dismissal of an insured’s action. No Delaware court had ever addressed this issue. The court held that although Verizon filed its Delaware lawsuit one day earlier than it should have, Verizon’s action could proceed because the breach was not material and Delaware law should be applied to the dispute, because Delaware had the greatest interest in determining D&O coverage issues involving Delaware corporations or their directors and officers. The New York court subsequently dismissed the insurers’ competing New York action.