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Mess in Texas: Insurer Recoupment of Settlement Payments
The Texas Supreme Court unanimously has held that an insurer may recover from its own insured monies advanced by the insurer to settle an uncovered liability claim ' though the justices sharply divided on the rationale. The case, Excess Underwriters at Lloyd's, London v. Frank's Casing Crew & Rental Tools, Inc., No. 02-0730 (Tex. May 27, 2005), picks up the cudgels on this issue from the California Supreme Court's opinion in Blue Ridge Ins. Co. v. Jacobsen, 22 P.3d 313 (Cal. 2001) and seemingly abandons the prior decision in Texas Ass'n of Counties County Gov't Risk Mgmt. Pool v. Matagorda County, 52 S.W.3d 128 (Tex. 2000), which had cast substantial doubt on the viability of an insurer-recoupment claim, at the time seeming to bring Texas in line with Massachusetts on this issue. See Med. Malpractice Joint Underwriting Ass'n of Massachusetts v. Goldberg, 680 N.E.2d 1121 (Mass. 1997). Frank's Casing also parts company with the recent holding of the Illinois Supreme Court in General Agents Insurance Company Of America, Inc. v. Midwest Sporting Goods Company, 828 N.E.2d 1092 (Ill. March 24, 2005), which had rejected a carrier's claim for recoupment of defense costs, though on a basis that would bar recoupment of settlement or indemnity payments, too.
In Frank's Casing, the insured was involved in a serious case, resulting in a $7.5 million settlement. The insurers had previously offered to pay roughly two-thirds of this amount without a right of recoupment against the insured; the insured rejected this proposal, and the insurers paid the full sum and sought recovery from the insured of the entire amount.
Earlier, the insured had written to the carriers stating that the proposed settlement was reasonable in the circumstances (holding aside coverage issues) in an effort to set up the carriers for a third-party bad-faith claim, that is, a claim that the insurers unreasonably failed to settle within policy limits (which in Texas is known as a “Stowers” claim). The policy contained standard boilerplate language saying the insurer couldn't be sued until a final judgment was entered against the insured or unless a tripartite deal was reached among the claimant, the insured, and the insurer, which the Texas Supreme Court's lead opinion characterized as vesting in the insured a right to consent to settlements.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?