SDV Insights

In June, the New York Court of Appeals examined the application of a New York Choice of Law provision in a contract - a determinative issue for the case. In Ontario, Inc. v. Samsung C&T Corp., the issue was whether the plaintiff's claims were subject to Ontario, Canada's 2-year statute of limitations or New York's 6-year statute of limitations for breach of contract where the contract contained a broad New York Choice of Law provision.

In a major win for policyholders, the California Supreme Court recently held that a negligent hiring, supervision, or retention claim arising out of an employee's intentional misconduct constitutes an "occurrence," giving rise to coverage under a general liability policy.

The Supreme Court of Texas recently clarified that under certain circumstances, an insured can recover policy benefits as damages for bad faith even absent a finding that the insurer was in breach of contract. In USAA Texas Lloyds Company v. Menchaca, the court explored decades' worth of Texas precedent and distilled it into five simple rules that govern claims of this nature.

On January 17th, 2018, the PHP Ins. decision from the Ninth Circuit Court of Appeals solidified the broad duty to defend for insurers in California. The court used the long-established precedent that remote facts buried within the causes of action that may potentially give rise to coverage are sufficient to invoke the duty to defend and upheld the trial court's decision that the insurer's duty to defend was triggered.

On December 19, 2017, the Pasiak decision of the Connecticut Supreme Court opened the door to finding coverage for punitive damages under an insurance policy related to certain common law claims. While the case involves a homeowner's policy, other policyholders may be able to use the court's reasoning when seeking coverage for punitive damages. The case also clarifies the amount of proof required for an insurer to prove that a policy exclusion bars coverage.

When a prospective tenant alleged a wrongful interference claim against a landlord, the landlord sought coverage under the "Personal and Advertising Injury" coverage section of his CGL policy. Unfortunately, the insurer denied defense, arguing that the coverage required the tenant to have physically occupied the space. In the ensuing coverage action, a Texas Federal district court judge made a surprising ruling that is now up on appeal to the Fifth Circuit.

The cost of insurance is often a critical factor driving subcontractor pricing. While alternative risk transfer schemes--such as consolidated insurance programs--have grown in popularity, the typical upstream/downstream structure where owners and general contractors contractually require downstream entities to procure insurance remains a common approach.

Argument before the Court of Appeals has now been scheduled for February 7, 2018, in Gilbane Building Co. v. St. Paul Insurance, with a long anticipated decision by New York's highest court to be issued shortly thereafter.

On November 20th, the New York Court of Appeals expansively interpreted the language of New York Insurance Law Section 3420 by holding that the statute, which applies to policies "issued or delivered" in New York, extends to policies insuring risks in New York, not just policies that originated from or were actually handed over to the insured in the state.

On Tuesday, October 24, the New Jersey Supreme Court heard arguments in a 17-year-old battle between Honeywell International Inc. (Honeywell) and two excess insurers, St. Paul Fire and Marine Insurance Co. (St. Paul) and parent Travelers Casualty and Surety Co. (Travelers) over whether Honeywell will have to help cover the costs of asbestos-related injury suits that were filed against it after insurers began to universally exclude coverage for asbestos-related liabilities in 1987.