Claims And Issues

Vermont Law Moves Close to Single-Payer Healthcare.

   Vermont has enacted laws which come close to so-called "single-payer" Healthcare.  This remarkable development is contrary to prevailing views it seems.  However, the changes in the Vermont law may not take full effect until as late as 2017.  See Abby Goodnough, "A Doctor's Push for Single-Payer Health Care for All Finds Traction in Vermont" p. 21, col. 1 (New York Times Nat'l ed., Sunday, May 22, 2011).  Monitor the performance and evaluate the Vermont laws at Vermont's Health Care Reform, a State agency website.

The Author is Co-Chair of the Health, Life and Disability Insurance Law Sub-Committee of the American Bar Association Insurance Coverage Litigation Committee.

See also this impressive post with many links to past reports on the same general subject matter by Timothy Jost, "Implementing Health Reform:  The Premium Increase Review Final Rule," posted on May 20, 2011 on Health Affairs Blog.  See generally Brian Wolfman, "The Cost of Health Care and Who Should Pay For It," posted on May 14, 2011 on Consumer Law & Policy Blog (Public Citizen's Consumer Project).

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Update: How Health Insurance Companies "Justify" >10% Premium Increase.

   Previously it was posted here that contemporary newspaper reporting did not reveal exactly how Health Insurance Companies would "justify" their Premium Rate Increases of greater than 10%, as required by a new Federal Rule.  See "Health Insurers Howl Over Justifying >10% Premium Rate Increases," posted May 23, 2011.

   For a clear and detailed examination of exactly how Health Insurance Companies will be required  by the new Rule to justify those Health Coverage Premium Rate increases, see Timothy Jost, "Implementing Health Reform:  The Premium Increase Review Final Rule," posted May 20, 2011 on Health Affairs Blog.

   The Author is Co-Chair of the Health, Life and Disability Insurance Law Sub-Committee of the American Bar Association Insurance Coverage Litigation Committee.

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Young Driver Savings Buying Auto Insurance: Shop Till You Drop!

   Are you a young driver, or do you or your clients have a young driver in the household who is in the market for buying Auto Insurance?  This timely newspaper article will take you through the whole process.  The bottom line?  Shop till you drop, and get the best Policy for your money that you can:  See Kathy M. Kristof, "Personal Finance / Auto Insurance Premiums for Young Drivers Vary Widely" (Los Angeles Times Online, posted May 22, 2011).

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Rescission of JPMorgan Chase Mortgage Coverage: "Materially False or Misleading" ...

... Says Its own Insurer in Unilaterally Rescinding Insurance Coverage for JPMorgan Chase's own Mortgage Losses.

 

Brief Summary of the Federal Court's Holding:

JPMorgan Chase had no claim against its Mortgage Insurance Company for Rescission of JPMorgan Chase's own Mortgage Insurance for Mortgage Losses.  The Mortgage Insurance Company Rescinded Because Chase and Wamu Supplied the Mortgage Insurance Company With "Materially False or Misleading" Information Which Chase Certified.

   Many bankers have told newspaper reporters that no remedies exist on account of the Great Economic Fiasco and particularly the Subprime Mortgage Crisis.  Moreover, many bankers have verbally shifted all blame for their issuing Subprime Mortgages to the people who received them.

   In a recent decision, a Federal Court held that JPMorgan Chase was responsible for giving information to its own Mortgage Insurance Company which allowed the Mortgage Insurance Company to Rescind Chase's own Coverage because the information was "materially false or misleading".

The Federal Case:  Download JPMorgan Chase Bank, N.A. v. Republic Mortgage Insurance Co. (D.N.J. Case No. 10.06141, Opinion Filed May 4, 2011) PUBLIC RECORDS ACCESS, 2011 WL 1750439 (D.N.J. May 4, 2011).

   Republic Mortgage Insurance Company issued Mortgage Insurance Policies to JPMorgan and to Washington Mutual Bank ("Wamu").  The Mortgage Insurance was "on residential loans in which a borrower makes a down payment that is less than twenty percent of the property's purchase price."  Download JPMorgan Chase Bank, N.A. v. Republic Mortgage Insurance Co. (D.N.J. Case No. 10.06141, Opinion Filed May 4, 2011) PUBLIC RECORDS ACCESS, 2011 WL 1750439 *1 (D.N.J. May 4, 2011)(authorized password required to access Westlaw).

  The Court in this case referred to JPMorgan Chase and Wamu collectively as "Chase".

   The RMIC Underwriters were careful.  They wrote Mortgage Insurance Policies that required Chase, their Policyholder-Insured,  to represent that the information provided on each of these Mortgages "was 'not false or misleading in any material respect'" in order to get the Coverage.  JPMorgan Chase Bank, N.A. v. Republic Mortgage Insurance Co., 2011 WL 1750439 at *1.

   As quoted by the Court in this case, three (3) standard provisions in just about any Insurance Policy and application then came into play together here regarding each Mortgage to be covered by the Policy:

1. "Pursuant to the terms of the Policies, RMIC agreed to pay Chase, in consideration of the premium paid and 'in reliance upon [Chase's] representations and statements made in any Application for coverage' under the Policies, certain losses incurred as a result from the default by a borrower on a mortgage loan."
2. Chase was required to provide the Insurance Company with information about each loan before there would be Coverage under the Policy for each particular loan transaction, i.e., for each such Mortgage insured under Chase's Insurance Policy with RMIC.  There were two general types of information which Chase could choose to provide.  "In either case, Chase represented to RMIC that this information was 'not false or misleading in any material respect ....'"
3. Under the Policies, Republic Mortgage had the standard right "'at its option and to the extent permitted by applicable law, to cancel or rescind coverage'" if any of the representations made by Chase "in the insurance application were materially false or misleading".

Id. at *1.

   Republic Mortgage unilaterally rescinded.  JP Morgan Chase sued.  Chase alleged three claims or Counts:  Declaratory Judgment, breach of contract, and Bad Faith.  Chase based all three claims on the same one contention:  Chase argued only that Republic Mortgage should have gone to Court to rescind Chases' Policies and not rescinded them on its own.

   Chase did not allege that it did not make any material misrepresentations in its loan applications, said the Court in this case.  Chase's Count I was, it bears repeating, for a Declaratory Judgment "that RMIC cannot rescind coverage for a loan without first commencing litigation," id. at *1.  The Plaintiff and Insured in this case was of course Chase itself suing on its own Coverage with Republic Mortgage, and the Court made note of the following:

Nowhere in Count I does Plaintiff allege that the insured did not make any material misrepresentations in its loan applications for the Policies, which would render RMIC's rescission fraudulent.

Id. at *3.

    The Federal Court granted Republic Mortgage's motion to dismiss all Counts, with leave to Chase to amend to allege individual, specific Mortgage transactions, if Chase be so advised.

   It has been said that the great glory of the common law is its capacity for growth in the direction of obvious propriety.  With that in mind, this is a case to be followed.

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Annual Travel Insurance News Rollout.

   It appears to be time for my annual post linking to news about Travel Insurance.  Be careful, not just on your vacation travels but in looking around for appropriate Travel Insurance.  This is the note sounded by Scott McCartney, "Coverage For When The Vacation is Scrubbed / More Travelers Are Buying Insurance in Event of Hurricane, Terrorism, Illness and Other Disasters, but Exclusions Abound" p. D5, col. 1 (Wall Street Journal, Thursday, May 19, 2011).

   Here is a link to another well-written article by Scott McCartney on the same subject, "Travel Insurance That's Got You Covered" (Wall Street Journal Online, May 19, 2011).

  On the same published page as the first listed article from the Wall Street Journal, there is a potentially useful box of bullet points (for which I cannot find an online link, sorry):  "When You Need Insurance / Advice on What to Buy" from the Wall Street Journal in the same edition on the same page.  And finally, here is a video about Travel Insurance from the Wall Street Journal Online website.

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Health Insurers Howl Over Justifying >10% Premium Rate Increases.

   People are giving up some healthcare they need because they cannot afford it.  Not elective surgery like tummy tucks and facelifts.  Needed care.  People cannot afford the higher deductibles, rising co-pays, and increasing Premiums for individual Health Coverage and for their share of Group Health Plans.  At the same time, in exchange Health Insurance Companies are charging increasingly higher prices and obtaining increasingly higher profits.  See, e.g., Post on May 15, 2011, "When Premiums for Personal Health Insurance Policies Rise, Healthcare Decreases".

   The Federal Government issued a Rule on Thursday of this week that takes effect in September.  Health Insurance Companies are already howling.  The "final rule" will require Health Insurance Companies to "justify" Premium Increases of greater than 10%.  What they will be required to do to "justify" their Rate Requests is not publicly reported at this time.

   However, the Rule will require the following:

• Federal and State Insurance officials will review Premium Rate Increase Requests from Health Insurance Companies "in the individual and small-group insurance markets."
• The Federal Healthcare Law mandates annual reviews for "unreasonable increases in premiums."
• "Unreasonable" Health Coverage Premium increases reportedly include excessive increases, unjustified increases (without further explanation available in the public reporting at this time), or Premium increases that are "'unfairly discriminatory.'"
• "Excessive" increases in Health Coverage Premiums, in turn, reportedly include increases that are "'unreasonably high in relation to the benefits provided.'"
• State review processes must include the opportunity for public comment.
• Although Federal officials cannot block Premium Rate Requests, many State Insurance Commissioners can, and if the States will not or cannot review the increases, Federal officials will undertake a review of the Health Coverage Premium increases.

The most important feature of these Rule requirements will center around the requirement that Health Insurance Companies "justify" (in some fashion not widely known, at present) their Premium increases whenever and wherever the Rule applies and the Health Premium increases are greater than 10%.  At present, Health Insurance Companies in many instances do not have to justify any Premium increases in these markets.

See generally Robert Pear, "Insurers Told to Justify Rate Increases Over 10 Percent" p. A16, col. 1 (New York Times Nat'l ed., Friday, May 20, 2010).

The author is Co-Chair of the Health, Life and Disability Insurance Subcommittee of the Insurance Coverage Litigation Committee of the American Bar Association.

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"Shameless Seminar Promotion!" Link to New Article!

   Today in Orlando the Insurance Law Committee of the OCBA is presenting a day-long Seminar on Catastrophic Damages:  Insurance Claims and Insurance Bad Faith Issues.  It will be held at the Orange County Bar Association Headquarters.  We are pleased to feature eight accomplished Speakers on topics as varied as the BP Claims, Recent Case Developments, Professionalism and Ethics, Commercial General Liability Insurance, and Private Lawsuits for Damages from Public Torts.

   Courtesy of our generous sponsor, we are offering complimentary breakfast and lunch.  On behalf of the entire Committee, we hope to see you there.  If you cannot make it today, please contact the OCBA to listen to the audiotape.

   In the meantime, here is a link to a newly published article you may find interesting:  "Discovery of Claims File Materials in Bad Faith Cases:  the Florida Experience" 33 Insurance Litigation Reporter 177 (2011) which you can access here even before I get to publish it on my website:  Download Discovery of Claims Files.ILR.04.22.11 Article..

   Enjoy and thank you.

      Dennis Wall

When Premiums for Personal Health Insurance Policies Rise, Healthcare Decreases.

   Newspapers report that Health Insurance Premiums are rising although Healthcare use is decreasing.

   Among the reasons cited for the decrease in visits to the doctor, and in scheduling tests and operations, are reasons which have previously been explored here in the past year or so.  They are:

• Increased deductibles and co-pays.
• More Exclusions from Coverage.
• Greater cost burdens on persons filling prescriptions as Health Insurance Companies shift a larger part of the burden of many or all prescription drugs to patients.

See Reed Abelson, "Health Insurers Profit as Many Postpone Care / Earnings Hit Records / Patients Cut Spending, but Premiums Are Still Rising" p. A1, col. 6 (New York Times, Saturday, May 14, 2011).  Parenthetically, an indicator of most people's financial cutback on health care is the fact that many people once resisted buying generic drugs, but since much of the cost of prescription drugs is now being borne by the patient, people are purchasing generics in greater numbers than before.  Id.

   Another obvious reason that many people postpone health care is the focus of these reports:  Health Insurance Companies raising Premiums.  Many people are obviously postponing health care because the decreased Coverage, increased deductibles, increased co-pays, and increased share of the patient in bearing the cost of prescription drugs is accompanied by an increase in Health Insurance Premiums for personal, individual Health Insurance Policies (as well as by high Premiums for employment-based Health Insurance in many cases).

The author is Co-Chair of the Health, Life and Disability Insurance Law Subcommittee of the Insurance Coverage Litigation Committee of the American Bar Association.

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Deleting Macy's Self-Insured Retention Retroactively in New York.

   A Commercial Lease of real property in New York City contained a Self-Insured Retention that led to litigation between the landlord and the tenant.  The landlord is Weatherly 39th Street, LLC.  The tenant is Macy's.  The case is Federated Retail Holdings, Inc.  v. Weatherly 39th Street, LLC, 2011 WL 1438785 (N.Y. Sup. Ct., New York County, April 11, 2011)(authorized password required to access Westlaw).

   Although the Self-Insured Retention clause was at issue in this case, it is not to be found in the Court's opinion.  The case was about whether Macy's successfully deleted the Self-Insured Retention, sufficient to "cure" its alleged Default under its lease by retroactively eliminating the clause.

   Here is how Macy's landlord came to issue not one, but at least three Notices of Default accusing Macy's of being in default under its commercial lease and also providing Macy's with a way to "cure" its alleged default in this regard.

   "One provision of that lease required the tenant, Macy's, to acquire commercial general liability insurance for set amounts of coverage."  Id. at *1.  Macy's acquired both primary and umbrella CGL Coverage, but with Self-Insured Retention clauses on all its CGL Policies.  Macy's landlord was apparently unmoved by the possibility that Macy's could handle it.

   This caused Macy's landlord to issue the first Notice of Default.  "[A]ccording to Weatherly [Macy's landlord, this] violated the terms of the lease because it left the tenant [Macy's] personally liable for one million dollars of any potential claim."  Id.

   Macy's obtained "fronting" primary CGL Policies which removed the Self-Insured Retention.  It apparently did not think to obtain new umbrella CGL policies or endorsements, because the umbrellas were apparently left alone.  This caused the landlord to send a second Notice of Default.  In this new document, however, the landlord gave Macy's a way "out" of the alleged default:  It wrote to Macy's, as quoted by the Court in this case, that the default "'can be cured by your providing to Weatherly retroactive insurance coverage eliminating the self-insurance aspects and aggregates and naming Weatherly as a named insured.'"  Id. 

   Macy's then obtained endorsements from its different Insurance Companies deleting the Self-Insured Retention on all of Macy's CGL Policies.  Macy's primary CGL carrier was Liberty Mutual.  Macy's umbrella CGL carrier was AIG ("Chartis" or National Union).  The Self-Insured Retention was deleted, "retroactively, for all claims made during the period in which the policies were in effect."  Id. at *2.  In addition, Macy's "averred" in a way not specifically identified in this Opinion "that it is not aware of any such loss".  Id. at *3.

   The landlord's response was to notify Macy's, again, "that Macy's had failed to remove the self-insured retention default under the lease and, therefore, Weatherly elected to terminate the lease ...."  Id. at *2.  In response, Macy's filed suit and requested the Court to declare that Macy's affirmatively cured the alleged default and so lease termination was not available to its landlord here.  "Hence, the issue for resolution is whether a self-insured retention provision may be removed retroactively from an existing insurance policy by endorsement."  Id.

   There did not seem to be an issue about whether Macy's and its CGL Insurance Companies could remove the Self-Insured Retention.  The only questions were whether the Self-Insured Retention could be removed retroactively, and whether that was properly done in this case.

   The Court ruled, first, that Macy's CGL Policies were "occurrence" policies in fact and under New York law.  This ruling meant that they were capable of being amended retroactively to the date on which the Policy was originally issued.  It also declared that the Macy's Policies provided Coverage based on an occurrence during the policy period, regardless of when a liability claim might be made against Macy's on account of that occurrence.  A "retroactive date" is the effective date of any Policy, as applicable here.  This is to be distinguished from a "claims-made" policy in which the underlying claim against Macy's would have been made during the policy period arising out of otherwise covered "'incidents, acts or omissions'" taking place virtually at any time.  See id. at *4.

   That left the question whether the Self-Insured Retention on Macy's particular CGL policies in this case was properly deleted retroactively.  The Court in this case answered in the affirmative:

 [I]n the instant matter, Macy's always had insurance, and merely amended their existing policies to provide for greater insurance.

 * * *

   The endorsements acquired by Macy's in 2010 are amendments to their existing occurrence policies, not new occurrence policies, and, consequently, the effective date of coverage begins on the effective date of the policy.

 Id. at *5 - *6.

    Consequently, following these rulings, Macy's motion was granted.  The Court in this case declared that Macy's cured the alleged "Self-Insured Retention clause" default under its lease, and that Macy's landlord may not terminate Macy's lease on that ground.  Id. at *6.

 This case has a tortuous legal history including at least one prior appeal and the known loss "doctrine".

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CGL Completed Operations Coverage Construed in California Construction Dispute.

   In Download Clarendon America Insurance Co. v. General Security Insurance Co. (Cal. 2d DCA Opinion 03.02.11, ordered officially published 03.30.11) PUBLIC ACCESS, also published as 2011 WL 711856 (Cal. 2d DCA, Div. 2, March 2, 2011)(authorized password required to access Westlaw), California's Second District Court of Appeal approved the Trial Court's resolution of a Construction Dispute by Summary Judgment.

   The Construction Dispute arose in a lawsuit against Hilmor Development ("Hilmor").  Hilmor purchased two consecutive Commercial General Liability Policies from two different Liability carriers, which is a common practice.  The first carrier on the CGL risk was Clarendon, which issued Hilmor a Policy for the period of July 1, 2000 to July 1, 2001, and the next was General Security, which issued Hilmor a Policy for the period of July 1, 2001 to July 1, 2002.

   Hilmor entered into a general contract on or about September 30, 1999 to build what the Court called a "custom single family home" in Beverly Hills, California.  The home was to have 14,000 square feet.   Slipsheet at 2; 2011 WL at *1.  On May 18, 2001, the homeowners fired Hilmor and threw it off the job.  Thereafter they sued Hilmor because, they alleged after the house was completed, that Hilmor was responsible for construction defects in it.

   Clarendon defended Hilmor in the underlying lawsuit.  It settled that lawsuit, paying its Policy Limit of $1,000,000.00.  Clarendon allegedly also paid other costs and expenses including the stated sum of "$473,463.29" in "defense fees" to one of two law firms mentioned in the opinion.  Slipsheet at 3-4; 2011 WL at *2.  Clarendon then sued General Security for declaratory relief, equitable contribution, and equitable indemnity.

   As noted, the Trial Court entered Summary Judgment, in General Security's favor.  The Trial Court was of the opinion that there was absolutely no Insurance Coverage under General Security's CGL Policy for Hilmor with respect to the underlying claim in suit, and the California Appellate Court agreed.

   Here, there simply was no "Products-Completed Operations" Coverage under General Security's CGL Policy.  Completed Operations Coverage requires that work on the project was completed or that the insured abandoned the work.  It "does not apply to work that has not yet been completed or abandoned....  Hilmor's work had not been completed, nor had it been abandoned.  Instead, Hilmor was terminated from the job before it completed its work."  Slipsheet at 7-8, 2011 WL 711856 at *4-*5.

   To put it bluntly:  "Because the insured was fired, it never completed its work."  Slipsheet at 14, 2011 WL 711856 at *8.  As a matter of law, therefore, there could not be any Completed Operations Coverage under the General Security CGL Policy in this case.

   Further, the General Security Policy contained a "Claim(s) in Progress Exclusion".  "Under the terms of this exclusion, the General Security policy does not apply to property damage which began or took place before July 1, 2001, the date that General Security's policy became effective. There was evidence that the continuing and progressive property damage of which the Revahs [i.e., the underlying Plaintiffs-homeowners] complained began prior to the inception of the General Security policy."  Slipsheet at 17, 2011 WL 711856 at *10.

   Accordingly, the California Appellate Court affirmed the Trial Court's grant of Summary Judgment to General Security against the claims of Clarendon in this peculiar case.

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Louisiana Court Chooses Florida Law: Total Pollution Exclusion Bars ....

... FEMA Trailers' Formaldehyde Damages From Katrina Aftermath. 

   In the case of In re FEMA Trailer Formaldehyde Products Liability Litigation, 2011 WL 381616 (E.D. La. January 25, 2011)(authorized password required to access Westlaw), the Court was confronted with a Question of Coverage for North American Catastrophe Services, Inc. under a Commercial General Liability Insurance Policy issued by Northfield Insurance Company.  NACS obtained the CGL from Northfield after NACS, a Florida corporation, entered into brokerage contracts under which it obtained trailers for temporary "FEMA" housing after Hurricane Katrina.  The trailers reeked of formaldehyde, in basic and simple terms.  The CGL contained a Total Pollution Exclusion, also arguably in basic and simple terms.

   Following an exhaustive discussion of choice-of-laws principles, the Federal Court chose Florida law, applied the Total Pollution Exclusion, and granted the CGL Carrier's Motion for Summary Judgment of No Coverage:

Based on Louisiana's choice of law provisions and prior jurisprudence, Florida law should be applied to the insurance contract at issue. Under Florida law, it seems clear that the total pollution exclusion unambiguously excludes coverage for these claims. See Deni Associates, 711 So.2d 1135, 1138 (Fla.1998) (finding the total pollution exclusion to be clear and unambiguous). Thus, because Plaintiffs alleged injuries were caused by formaldehyde fumes, the Northfield policy does not apply, based on the Total Pollution exclusion located therein. The exclusion should be enforced as written and coverage is precluded.

 Id. at *9.  Katrina's aftermath lingers.  Insurance Coverage, at least in this case, does not.

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If Florida "Scott Free" of "Citizens," Citizens Will Pay?

   Reports from Florida abound that as Property Insurance Companies reported an increase of 21% in their net income in the "last year," and that Governor scott is "secretly pushing to kill Citizens Property Insurance" on the basis of increasing "free market competition" and Property Insurance rates.  See Robert Trigaux, "As Gov. Scott Seeks to End Citizens Insurance, Property Insurers Rack Up Big Earnings Gains" (St. Petersburg Times Online Venture Blog, posted April 25, 2011).  The post includes links and cites to the Property Casualty Insurers Association of America, the Sarasota Herald Tribune, the Florida Center for Investigative Reporting, and Florida Today newspaper.

  Florida citizens would do really well to ask before the bills come due to them:  What is the deal here?

For another viewpoint on the same topic, see Chip Merlin, Esq.'s post on April 26, 2011 on Property Insurance Law Blog, here.

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Collecting Reimbursement From Insured Town's Police Officer Not Bad Faith, ...

... in New Jersey Case.

 The New Jersey Appellate Court held that this was not Bad Faith on the part of General, the Underinsured Motorist Carrier:

   We find, however, no basis to award Kearny counsel fees premised on General's alleged “bad faith.” Once the first Law Division judge granted NJM's summary judgment motion, and we denied leave to appeal, General acted reasonably in settling with Swartz. In that settlement, General reserved its right to seek reimbursement from Kearny in the amount of the Town's self-insurance reserve. General's subsequent application to recover the $100,000 from Kearny was not bad faith, in light of the Law Division's ruling on the UIM coverage issue, which was the law of the case at that time.

New Jersey Manufacturers Insurance Co. v. Town of Kearny, 2011 WL 867269 *6 (N.J. Super. Ct. App. Div. March 15, 2011)(authorized password required to access Westlaw).  [Emphasis added.]

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California: Reimbursement Claim by Liability Insurer Against Its Insured Permitted.

     In American Modern Home Insurance Co. v. Fahmian,  2011 WL 1334959 (Cal. 4th DCA, Div. 3, April 8, 2011) a California District Court of Appeal affirmed and directed awards to American Modern Home Insurance Company which include reimbursement from its Policyholder, Mr. Fahmian, whom it defended in an underlying lawsuit.  The reimbursement award included $300,000 paid by American Modern to settle the underlying lawsuit on behalf of Mr. Fahmian and his business; fees and defense expenses "that the trial court determines are reimbursable under the terms of the policy," i.e., that were not covered by the policy;  plus prejudgment interest.  Id. at *10.

     The California Appellate Court applied what it called these "binding" rules concerning reimbursement claims and causes of action by liability insurance companies against their policyholders and other insureds:

Under binding California Supreme Court authority, an insurance company may obtain reimbursement from its insured for a policy limits settlement, when it is determined the underlying claim was not covered by the policy, if the insurance company (1) made a timely and express reservation of rights, (2) provided express notification to the insured of the insurer's intent to accept the proposed settlement offer, and (3) made an express offer that the insured could assume its own defense.  In this case, American Modern did all of the foregoing.  We decline to add any additional requirements.

 Id. at *1.

   The "additional requirement" that the California Appellate Court did not add in this particular case was a requirement added by the Trial Court in denying American Modern's claim for reimbursement against Mr. Fahmian.  The Jury in that case found as a fact, and the Trial Judge incorporated that finding into his ruling, "that Fahmian did not have sufficient time to make a reasoned reply to American Modern."  Id.

   The American Modern Home Insurance Co. v. Fahmian decision is discussed from the perspective of Good Faith and Fair Dealing issues raised by some practitioners in a post today on Insurance Claims and Bad Faith Law Blog, "Can There Be Bad Faith in Reimbursement Claims Against Insureds?" (no password or registration required to access).

  The Fahmian case is also the subject of a post I recently wrote for the Defense Research Institute Official Blogger at www.dri.org (no password or registration required to access it).  The case is also receiving comments at the "Insurance Coverage" Group on LinkedIn (registration believed to be required for access to www.linkedin.com).

Dennis Wall is the principal in Dennis J. Wall, Attorney at Law, A Professional Association in Winter Springs and Orlando, Florida.  He also is the Author of LITIGATION AND PREVENTION OF INSURER BAD FAITH (Shepard's/McGraw-Hill Second Edition; West Publishing Company 2010 Supplement and Third Edition 2011 in process).  Reimbursement causes of action by insurers from insureds are discussed in §3:4 of the Second Edition and 2010 Supplement, and in the Third Edition in §3:6, "Informing the Insured:  Insurer Assertion of Rights to Reimbursement From the Insured of Clearly Noncovered Indemnity and Defense Expense." 

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