Attorney-Client Privilege as Between the Insured, the Insurer and Their Attorney
January 05, 2006
The attorney-client privilege is a long-standing, well-respected principle. However, given that the privilege acts to limit the scope of discovery, it is frequently as challenged as it is respected. For example, the scope of privilege as between the insured, the insurer and the attorney representing their interests creates a peculiar problem for the courts. In this particular instance, the very basis of the privilege creates the problem.
Asbestos Bankruptcy Cases: The Rise of Objections By Disfavored Plaintiffs' Attorneys
January 05, 2006
There has been an emerging and interesting development in recent asbestos-related bankruptcy cases: the filing of objections by disfavored plaintiffs' attorneys. The filing of asbestos-related bankruptcy cases has increased dramatically with the establishment of Section 524(g) of the Bankruptcy Code. <i>See</i> Stephen J. Carroll, et al., <i>Asbestos Litigation</i>, 151-55 (Rand Inst. for Civ. Just., 2005) (reporting at least 73 asbestos-related bankruptcies since 1982, more than half of which were filed in the past 6 years). Section 524(g) provides asbestos-challenged companies a way to reorganize to shed their asbestos liabilities and channel all future asbestos claims to a trust established through the bankruptcy process. To achieve confirmation of a plan incorporating relief under Section 524(g), a debtor must have the consenting vote of 75% of the present affected asbestos claimants, among other things. This consent requirement has led debtors to enter into negotiations with asbestos claimants in advance of a bankruptcy filing in order to ensure sufficient voter approval for the plan of reorganization.
Repetitive Stress: How New Jersey Courts Handle Common Discovery Disputes Between Policyholders and Insurers
January 05, 2006
Attorneys litigating insurance coverage disputes may find themselves feeling like Bill Murray's character Phil Connors in the 1993 movie <i>Groundhog Day</i>, given the rate at which various types of conflicts repeat themselves, often involving a recurring casts of characters. In particular, discovery disputes between policyholders and insurers often involve the same categories of discovery that policyholders seek from insurers and which insurers frequently refuse to provide. This is no less true in New Jersey, which remains a popular forum for the filing of coverage actions. This article discusses categories of discovery sought by policyholders from insurers that commonly give rise to motion practice and how New Jersey courts have resolved such disputes.
Policyholders Demonstrating Third-Party Beneficiary Rights Granted Direct Access to Reinsurance Proceeds Under Facultative Contracts
January 05, 2006
On July 19, 2005, in a per curiam opinion, the Pennsylvania Supreme Court affirmed the Commonwealth Court's opinion in <i>Koken v. Legion Insurance Company</i>, which had been decided by Judge Mary Hannah Leavitt on June 26, 2003, <i>Koken v. Legion Insurance Company,</i> 831 A.2d 1196 (Pa. Commw. 2003), <i>aff'd,</i> 878 A.2d 51 (Pa. 2005).
West Virginia High Court: No 'Occurrence' in Faulty Workmanship
January 05, 2006
West Virginia's highest court has held that a commercial general liability ('CGL') policy does not provide coverage for faulty workmanship claims because such claims do not constitute an 'occurrence.' <i>Webster County Solid Waste Auth. v. Brackenrich & Assocs., et al.</i>, Nos. 31861 & 31862 (W.Va. June 30, 2005). This case reinforces the core concept — long recognized in insurance law — that general liability coverage protects against liability to others due to third-party property damage or bodily injury and does not serve as a performance bond for the policyholder's own work.
Insurer Must Defend Homebuilder for Defective Construction Regardless of Whether Complaint Alleges Water Damage During Policy Period
January 05, 2006
In <i>Westfield Insurance Company v. Kroiss</i>, 694 N.W.2d 102 (Minn. App. 2005), the Minnesota Court of Appeals held that an insurer had a duty to defend its homebuilder policyholder against lawsuits for water damage allegedly caused by defective construction during the insurer's policy period. The court further found that the policyholder was entitled to both fees and costs for its successful coverage action and relating to the underlying claims that were defended by other insurers.
Policy's Wording Is Key to Determining Insured's Coverage in Matters that Do Not Constitute Formal Lawsuits
January 05, 2006
The recent California Supreme Court decisions in <i>Powerine Oil Co. v. Superior Court,</i> Case No. 113295 (Aug. 29, 2005) ('<i>Powerine II</i>') and <i>County of San Diego v. Ace Property & Casualty Ins. Co.</i>, Case No. S114778 (Aug. 29, 2005), illustrate the significance the court ascribes to specific wording of insurance policies and the coverage they afford for liability imposed on an insured other than through a formal court judgment. In particular, <i>Powerine II</i> establishes umbrella and excess carriers' possible duty to indemnify insureds for administrative actions or other matters that do not constitute formal lawsuits.
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