Case Law Watch

Topliff v. Chicago Insurance Co.
(Wash. Court of Appeals, Nov. 15, 2005)

Ruling: The insured, an attorney, had been sued in an underlying action, and his professional liability insurer denied coverage because the claim was not within the definition of “professional service.” The insured sued the insurer and instituted the action by service on the State Insurance Commissioner. However, the Commissioner’s office failed to notify the insurer of the action. The insurer did not appear, and a default was taken. The court vacated the default noting that the insurer was deprived of the opportunity to respond, resulting in a failure of due process.

Albert v. Life Insurance Co. of North America
(Fifth Circuit Court, Dec. 2, 2005)

Ruling:The plaintiff in this case appealed from a decision of the district court granting summary judgment in favor of her long-term disability plan’s denial of coverage. The dispute was governed by ERISA. The Plan gave its administrator discretion to make claim determinations, and the court therefore was bound to apply an abuse of discretion standard in reviewing the administrator’s decision. Further, although the court recognized it could look beyond the administrative record to ascertain whether the administrator had a conflict of interest, the court was bound to consider only materials available in the administrative record in determining whether an administrator abused its discretion. Because the evidence relied upon by the administrator was adequate to support its decision, the court upheld the district court’s grant of summary judgment.

Exclusions-Work/Product

Bailey v. The Insurance Corp. of NY
(California 9th Circuit Court, Nov. 18, 2005)

Ruling: At issue on this appeal was the application of “exclusion j (6)” and whether that exclusion barred a portion of the award against the insured in the underlying action representing damages to drywall, flooring and other portions of the hotel. The insured had installed a plumbing system that appeared to have failed. The court held that there was an issue of fact as to whether there was an occurrence under the policy.

Information compiled by Kevin T. Merriman of Goldberg Segalla LLP. Web site: www.
goldbergsegalla.com.

Fire and First Party

Walker v. Allstate Insurance Co.
(California Court of Appeals Court, 2nd District, Nov. 9, 2005) (Unpublished)

Ruling: The court held that there were material issues of fact whether the insurer owed a duty to its insured for repair made by a third-party hired by the insurer to repair the insured’s property. Further, there was an issue of fact as to whether the failure to make property repairs caused and/or contributed to mold damage. With respect to coverage for the mold damage, the court also found issue of fact as to whether that damage was covered in whole or in part under the policy

Life, Health and Disability

Summers v. Great Southern Life Insurance Co.
(Washington Court of Appeals, Division 2, Nov. 8, 2005)

Ruling: The insured, a commercial airline pilot, instituted an action against his occupational disability insurer for breach of contract. The court granted summary judgment to the insurer because the insured’s disability was “temporary” and the policy unambiguously limited coverage to “permanent” disabilities.