Tag Archives: Insurance Claims

Lessons Learned: Report All Potential D&O Liability Insurance Claims Without Delay

This post was written by Courtney C.T. Horrigan.
The District Court of Massachusetts’ January 6, 2015 opinion in Biochemics, Inc. v. Axis Reinsurance Co., 2015 WL 71493 (D. Mass. Jan. 6, 2015), reaffirms the importance of providing timely notice …

Lessons Learned: Report All Potential D&O Liability Insurance Claims Without Delay

The District Court of Massachusetts’ January 6, 2015 opinion in Biochemics, Inc. v. Axis Reinsurance Co., 2015 WL 71493 (D. Mass. Jan. 6, 2015), reaffirms the importance of providing timely notice of all D&O liability claims – including subpoenas. In Biochemics, the policyholder sought coverage from its primary D&O liability insurer, Axis, for defense costs it incurred in an SEC enforcement action commenced during the AXIS policy period. Judge Rya Zobel held that Biochemics had no coverage for the SEC enforcement action because it related back to two deposition subpoenas that the SEC served on Biochemics before the AXIS policy incepted. Because those deposition subpoenas indicated on their face that the SEC had commenced a formal investigation against Biochemics, each subpoena was a “Claim” that should have been reported to Biochemics’ prior D&O carrier. Because the Claim was “first made” before the AXIS policy period, Judge Zobel granted AXIS’ motion for summary judgment and found that AXIS owed Biochemics no coverage under its policy.… Continue Reading

Claims Handling and the Duty of Good Faith

Barger & Wolen partners Gregory Eisenreich and John  Holmes recently updated Chapter 13 of the California Insurance Law & Practice, Claims Handling and the Duty of Good Faith. 
The chapter revisions include:

The nature and scope …

Reasoning Behind Punitive Damages Calculations Provided By California Appellate Court

Royal Oakes was quoted extensively in an Oct. 7, 2013, Claims Journal article, California Court Of Appeals Decision Provides Reasoning Behind Punitive Damages Calculations, about a significant insurance case where $19 million in punitive damages were a…

Reasoning Behind Punitive Damages Calculations Provided By California Appellate Court

Royal Oakes was quoted extensively in an Oct. 7, 2013, Claims Journal article, California Court Of Appeals Decision Provides Reasoning Behind Punitive Damages Calculations, about a significant insurance case where $19 million in punitive damages were a…

California Court Clarifies What Triggers the Right to “Cumis Counsel”

Nearly 30 years ago, the California Court of Appeal announced its landmark decision in San Diego Federal Credit Union v. Cumis Insurance Society, Inc., 162 Cal. App. 3d 358 (1984), holding that if a conflict of interest exists between an insurer and it…

Fingers Point to Different Defendants in Asiana Airlines Plane Crash

David McMahon, who represents insurers in litigation resulting from natural disasters and product liability lawsuits against the airline and cruise industry, was interviewed for an Aug. 6, 2013, Claims Journal article, Fingers Point to Different Defendants in Asiana Airlines Plane Crash, about the crash of Asiana Airlines Flight 214 and the different types of lawsuits resulting from it. McMahon told the publication that the Montreal Convention might limit the number of lawsuits that come out of the July 6 crash in San Francisco.

The Montreal Convention of 1999, among other things, prevents people “from filing a lawsuit in the United States if their final destination was outside of the country,” McMahon said. As such, if there were passengers on the flight who had round-trip tickets to South Korea, they would be prohibited from suing the airline in the U.S.

Under the Montreal Convention, I think what it’s designed to do is to give jurisdiction to the countries where someone is departing on a flight and ends up there. It makes sure that the place where the ticket was purchased and negotiated; the rules of that country apply to compensating the victims. In many countries, that kind of deprives the plaintiffs of a remedy, because very few countries have a tort system that is as advantageous as the tort system in the United States,” he said.

While the Montreal Convention may protect the airlines, it doesn’t insulate the aircraft or aircraft part manufacturers from lawsuits, McMahon noted. One such suit has already been filed against Boeing by Asiana crash victims in Chicago. Lawyers for two other passengers on the plane have taken yet another approach, filing a lawsuit alleging that the flight crew were grossly negligent and reckless in their handling of the flight.

They sued Asiana in the United States district court for the Northern District of California. I think that there is likely jurisdiction here, and this would be at least one of the proper venues. They squarely bring their lawsuit under the Montreal Convention,” McMahon said of the suit. “Now, one of the other facets of the Montreal Convention is that it provides a damage limitation cap. That cap is about $150,000 for physical damages, unless the airline can show that the incident was not due to their negligence. Then they have a second cause of action for gross negligence. I think that would be designed to blow the potential cap on liability. Then they have a third cause of action for loss of consortium.”

McMahon told the publication that Asiana had roughly $2.2 billion in insurance coverage for liability, about $3 million more for the crew and roughly $130 million coverage for the plane itself. Because the plane hit a seawall, the City and County of San Francisco will likely submit a claim with its carrier who will cover the replacement cost or the cost minus depreciation.

That carrier, then, would pursue Asiana or Boeing, or both, for those claims,” McMahon said. “That’s a good example of an easy subrogation claim. Any of these carriers that end up paying will likely pursue additional claims against the party that’s predominantly culpable. A lot will be determined from the National Transportation Safety Board investigation and from discovery in the case.”

McMahon also predicted the lawsuits would take at least two years to get resolved.

Typically, in situations like this, most of the victims who are seriously hurt, there’s going to be settlements of those. The initial facts are suggesting that this didn’t happen without negligence. I mean, the pilots themselves and everything that’s pointing to them indicates negligence, if not gross negligence. One would think that the defense lawyers that get involved in this would start focusing on the amount of damages relatively quickly, just like in any big disaster like this. Three people were killed, so those would be the highest‑value claims. There are a lot of lower‑extremity and spinal‑injury claims because the plane spun on its wings and really slammed into the runway. Then, people that were more in the forward section of the plane, who weren’t that seriously injured. One would think that they would try to get the easier claims out of the way and then focus on the damages,” he said.

While it typically takes 12 to 18 months, the National Transportation Safety Board is attempting to complete its report in less than a year, according to McMahon.

“Obviously, the plaintiff’s lawyers will be very interested in getting that report,” he said.

 

Asiana Flight 214 Victims’ Lawsuit Amounts Will Vary Widely

David McMahon was quoted in a July 28, 2013, San Jose Mercury News article, Asiana Flight 214 Victims’ Lawsuit Amounts Will Vary Widely, about the Asiana Flight 214 plane crash and how, thanks to a treaty governing international airline accidents, Amer…

Could Medpay Be The Latest Target In California Bad Faith Claims?

Marina Karvelas was quoted in a July 18, 2013, article published by Claims Journal, Could Medpay Be The Latest Target In California Bad Faith Claims, about a recent appeals court decision in California dealing with bad faith claims related to medical p…

Could Medpay Be The Latest Target In California Bad Faith Claims?

Marina Karvelas was quoted in a July 18, 2013, article published by Claims Journal, Could Medpay Be The Latest Target In California Bad Faith Claims, about a recent appeals court decision in California dealing with bad faith claims related to medical p…