ALLENTOWN, Pa. - A subrogation waiver clause included in a heating oil agreement sent to an insured by the heating oil company contravenes public policy because the average consumer does not have the chance to negotiate the provisions in residential heating oil contracts, a Pennsylvania federal judge said Oct. 5 in finding that an insurer is not barred from asserting negligence claims, as the subrogee of its insured, against the heating oil company (State Farm Fire & Casualty Co., et al. v. Petroleum Heat & Power Co. Inc., et al., No. 13-6732, E.D. Pa.; 2016 U.S. Dist. LEXIS 138479).
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on July 5 affirmed a lower federal court's finding that because underlying claims were based on an associate pastor's sexual acts, the victims and their parents cannot recover a $4.35 million award against the pastor from his church's insurer because the policy does not cover an individual's sexual misconduct and because Ohio public policy prohibits insurance for the sexual abuse of a minor (Jacquin Clifford, et al. v. Church Mutual Insurance Co., No. 15-4154, 6th Cir.; 2016 U.S. App. LEXIS 12541).
SACRAMENTO, Calif. - An "other insurance" clause cannot be enforced in an equitable contribution action between successive primary insurers, a California appeals panel held April 11, also finding that enforcement of the clause in a primary commercial general liability insurance policy would violate public policy (Certain Underwriters at Lloyds, London v. Arch Specialty Insurance Co., No. C072500, Calif. App., 3rd Dist.; 2016 Cal. App. LEXIS 275).
SCRANTON, Pa. - A Pennsylvania federal judge on March 30 held that whether one insured reimburses all or none of the $50,000 it was ordered to pay its insurer for the advancement of defense costs in an underlying criminal proceeding, the insurer has a duty to pay a second insured up to the $100,000 limit of liability pursuant to a public officials liability and employment practices liability insurance policy (Darwin National Assurance Co. v. Luzerne County Transportation Authority, et al., No. 14-2417, M.D. Pa.; 2016 U.S. Dist. LEXIS 41733).
NEW ORLEANS - A Louisiana federal judge held Feb. 29 that although a directors and officers liability insurance policy's allocation clause limiting an insurer's duty to defend is not prohibited by Louisiana public policy, there remains a genuine issue of material fact regarding whether the insured ever agreed to a "fifty-fifty allocation" of defense costs (Housing Authority Of New Orleans v. Landmark Insurance Co., No. 15-1080, E.D. La.; 2016 U.S. Dist. LEXIS 24419).
HARRISBURG, Pa. - A majority of the Pennsylvania Superior Court on Feb. 12 rejected an insured's argument that a commercial general liability insurance policy's employer's liability exclusion as it relates to a "leased worker" is unconscionable and against public policy, affirming a lower court's ruling in favor of an insurer in a coverage dispute arising from a workplace injury (Westfield Insurance Company v. Astra Foods Inc., et al., No. 1392 EDA 2014, Pa. Super.; 2016 Pa. Super. LEXIS 84).
WASHINGTON, D.C. - A District of Columbia federal judge on Nov. 20 granted a Canadian gold mining company's petition to confirm a $740.3 million arbitration award issued in its favor and against the Bolivarian Republic of Venezuela, finding that the award did not violate public policy and that all of the relevant factors weighed in favor of confirmation (Gold Reserve Inc. v. Bolivarian Republic of Venezuela, No. 1:14-cv-2014, D. D.C.).
NEW YORK - The Second Circuit U.S. Court of Appeals on Nov. 18 affirmed a lower federal court's ruling that a public entity management liability protection (PEMLP) policy's insured vs. insured exclusion bars coverage for an underlying municipal taxpayer lawsuit against the former chief administrative officer of the City of Burlington, Vt. (St. Paul Guardian Insurance Co., et al. v. Jonathan Leopold, No. 14-4519, 2nd Cir.).
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Oct. 23 affirmed a lower federal court's ruling that a commercial general liability insurance policy's prior publication exclusion precludes coverage for the Navajo Nation's trademark infringement claims against retailer Urban Outfitters (The Hanover Insurance Company v. Urban Outfitters, Inc., et al., No. 14-3705, 3rd Cir.; 2015 U.S. App. LEXIS 18459).
NEW YORK - A policy's consent provision requiring an insured to obtain an insurer's consent prior to incurring any expenses for environmental contamination cleanup costs and requiring the insurer not to unreasonably withhold consent is not void as a matter of public policy and must be enforced as written, a New York federal judge said July 13 (SI Venture Holdings LLC v. Catlin Specialty Insurance Co., No. 14-2261, S.D. N.Y.; 2015 U.S. Dist. LEXIS 89925).
LOS ANGELES - A California judge's decision to deny a woman's request to vacate an arbitrator's decision to award $1,707.11 to a contractor accused of faulty workmanship during renovations to her home was affirmed by a state appeals panel on June 22; it found that the judge did not err in finding that the terms of the construction contract did not violate California's public policy and that she was properly informed about the arbitration process (Rena Morris v. Michael O'Neill, et al., No. B258467, Calif. App., 2nd Dist., Div. 7; 2015 Calif. App. Unpub. LEXIS 4464).
PHILADELPHIA - Finding that there is a disputed issue of fact as to whether a public accounting firm's employee had reason to know, before an accountant's professional liability insurance policy became effective, that a claim could be reasonably anticipated, a Pennsylvania federal judge on May 18 concluded that the insurer has a duty to defend but does not have to indemnify the firm against an underlying lawsuit alleging that the firm and its employee breached their professional duty of confidentiality (Navigators Insurance Co. v. Resnick Amsterdam Leshner, et al., No. 14-5158, E.D. Pa.; 2015 U.S. Dist. LEXIS 64385).
CHARLESTON, W.Va. - A West Virginia federal judge on April 16 found that the "common theme" of an underlying complaint against a hospital and a records-imaging and storage company is deliberate, intentional conduct that led to an expected, desired or foreseeable result and not a chance occurrence that arose from unknown causes, finding that an insurer has no duty to defend or indemnify the defendants against claims that they violated public policy by engaging in a scheme that misrepresented the availability of a more reasonable cost of receiving medical records (Westfield Insurance Co. v. Records Imaging & Storage Inc., et al., No. 14-18854, S.D. W.Va.; 2015 U.S. Dist. LEXIS 49986).
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on April 16 found that a district court erred in finding that an arbitration award violated public policy, reversing a decision that refused to enforce the award in a case filed by a seaman, who alleged that he was injured aboard a vessel (Lito Martinez Asignacion v. Rickmers Genoa Schiffahrts, No. 14-30132, 5th Cir.; 2015 U.S. App. LEXIS 6245).
NEWARK, N.J. - A New Jersey federal judge on March 23 found that "all risks" property insurance policies' flood sublimits do not apply to a publicly traded diversified energy company insured's losses caused by storm surge resulting from Superstorm Sandy (Public Service Enterprise Group, et al. v. ACE American Ins. Co., et al., No. ESX-L4951-13, N.J. Super., Law Div., Essex Co.; 2015 N.J. Super. Unpub. LEXIS 620).
HOUSTON - A federal judge in Texas on Jan. 29 held that an insurance adjuster lacked standing to bring claims that a number of insurance companies violated the False Claims Act (FCA) by preparing and submitting inflated claims on flood insurance policies backed by the Federal Insurance Administration's (FIA) National Flood Insurance Program (NFIP), while reducing claims paid on privately backed wind insurance policies, finding that his allegations were based on publicly disclosed information (United States of America, ex rel. Kermith Sonnier v. The Standard Fire Insurance Company, et al., No. H-12-1065, S.D. Texas; 2015 U.S. Dist. LEXIS 10006).
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 20 declined to hear the appeal of a ruling by the California Supreme Court that an arbitration agreement requiring an employee as a condition of employment to give up the right to bring a representative action under the California Labor Code's Private Attorney General Act (PAGA) in any forum is contrary to public policy (CLS Transportation Los Angeles, LLC v. Arshavir Iskanian, No. 14-341, U.S. Sup.; 2015 U.S. LEXIS 735).
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Nov. 14 refused to reconsider its ruling that an insurance policy's prior publication exclusion bars coverage for underlying claims that the insured infringed on the claimant's use of the "StreetSurfer" trademark to market his skateboards (Street Surfing LLC v. Great American E&S Insurance Co., No. 12-55351, 9th Cir.).
RULTAND, Vt. - An underlying municipal taxpayer lawsuit against the former chief administrative officer of the City of Burlington, Vt., fails to allege a "covered" loss under a public entity management liability protection (PEMLP) policy, a Vermont federal judge ruled Nov. 4, further finding that the policy's insured vs. insured exclusion also bars coverage (St. Paul Guardian Insurance Co., et al. v. Jonathan Leopold, No. 14-00040, D. Vt.).
SACRAMENTO, Calif. - For legal and public policy reasons, California should side with the majority of other states and reject liability for take-home asbestos exposures, Pneumo Abex LLC told the California Supreme Court on Oct. 17 (Johnny Blaine Kesner v. Superior Court of California for the County of Alameda, No. S219534, Calif. Sup.).