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When a property is physically damaged by some insurable event — such as a flood or fire — laws or ordinances that were not in place when the original property was first constructed must be considered in the repairing or rebuilding of that property. After Hurricane Andrew in 1992, for example, Dade County Florida required that ruined houses be rebuilt in compliance with stricter severe-weather standards than the damaged houses had previously exhibited. These upgrade requirements must be reconciled with replacement-cost insurance for property owners, which puts the insured in the same position, with the same quality of property, as existed before the insured event — not in a better position, with a higher quality of property (eg, a stronger roof, better ventilation, wider egresses, and the like). Consequently, courts, insurers and insureds need to resolve the question of which party pays the costs of compliance with changed construction codes.

When an insured's personal finances are essential to establishing a monetary motive for his or her conduct (particularly in insurance fraud cases), it is necessary to ask pointed, and, yes, sometimes embarrassing questions at examination under oath or deposition.

Highlights of the latest insurance cases from around the country.

The income tax effect of cash payments made by one spouse in a divorce proceeding to the other is determined under section 71 of the Internal Revenue Code. To be taxable to the recipient of the payments as alimony, and deductible by the payor, the payments must meet the four requirements of section 71(b)(1). Of these requirements, the one that has caused the most difficulty is found in section 71(b)(1)(D): there can be "no liability to make any such payment after the death of the payee spouse ... " nor can there be any liability to make a substitute payment.

As reported on these pages late last year, on Nov. 18, 2003, the Massachusetts Supreme Judicial Court decided Goodridge v. Department of Public Health, holding, in a 4-3 decision, that the denial of marriage licenses to same-sex couples in the Commonwealth of Massachusetts violated the state's constitution.

In-house counsel focused on complying with the Sarbanes-Oxley Act should be wary of falling into a trap that could increase the business risks and liability exposure of their company and its executives.

Recent rulings of importance to you and your practice.

The latest rulings of interest to your practice.