Category Archives: Coverage

Court Rules that Reasonableness Under Insurance Law 3420 Can Be a Question of Law for the Court.

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On May 10, 2018, the Eastern District of New York handed down a total victory to Northfield Insurance Company on the insurer’s motion for summary judgment, in Northfield Insurance Company v Queens Palace Inc., issuer of a commercial general liability policy to Queen’s Palace, a nightclub, initiated the federal declaratory judgment action seeking a ruling that it had no coverage obligations to its insured or any other party in connection with the underlying wrongful death action brought by the estate of a Queen’s Palace patron tragically murdered outside of the nightclub by several of its patrons.

Northfield issued a total disclaimer of coverage premised only upon the policy’s Assault and Battery Exclusion barring coverage for bodily injury arising out of any act of assault or batter “committed by any person.”  The Court easily agreed with the substance of the disclaimer, even in light of the stringency of the duty to defend imposed upon insurer’s under New York law, where even a “reasonable possibility” of coverage is sufficient to trigger the duty, and the burden on an insurer relying on an exclusion to disclaim coverage to show there is only one reasonable interpretation of the allegations: that the exclusion applied.

Thus, the insured and other defendants were left with one other argument: that Northfield’s disclaimer was too late, pursuant to N.Y. Ins. Law § 3420.  Section 3420 imposes a duty on any insurer, in any matter involving bodily injury or death, to provide any disclaimer or denial of coverage “as soon as is reasonably possible.”  Defendants argued they did not receive written notice, and submitted “return to sender” envelopes as evidence that Northfield was aware its disclaimer was not received.

The Court ruled that the envelopes were not admissible evidence, and therefore could not impact the summary judgment motion.  In favor of Northfield, the Court did consider the testimony submitted via affidavit from the Northfield adjuster about the dates she mailed out the disclaimers.  But, as the Court noted, “the question of whether a disclaimer has been issued with reasonable promptness is in most cases a question of fact.”  A question of fact would preclude granting the motion for summary judgment.  The disclaimer was mailed out 19 days following Northfield’s receipt of notice of the claim.  So – and significantly – the Court ruled that 19 days could be deemed reasonable as a matter of law, thus rendering Northfield’s disclaimer proper as a matter of law.

The question of what constitutes “as soon as is reasonably possible” is understandably vexing to insurers, particularly in matters necessitating more complicated investigation and analysis than was necessary for Northfield here.  The Northfield Court’s ruling is a helpful example of the Court’s applying a reasoned and practical approach to deciding what is “reasonable,” and represents excellent precedent on summary judgment motions where defendant’s attempt to argue the “reasonableness” question of fact alone is sufficient to preclude such a motion.

Thanks to Vivian Turetsky for her contribution to this post.

 

 

 

 

 

 

 

 

 

Bald Assertions Insufficient to Hold Insurance Professionals Personally Liable for Claims-Handling Practices (TX)

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While we do not ordinarily report on Texas litigation, occasionally we learn of decisions of particular import to insurance claim professionals.

In coverage litigation, insureds often attempt to recover more than damages for simple breach of contract.  Most often, this comes in the form of a bald assertion of bad faith.  At other times, however, insureds rely on state statutes that impose personal liability on insurance professionals.  Fortunately, as they often do in bad faith cases, courts typically require something more than bald assertions to impose extra-contractual liability.

One example is the recent decision from the United States District Court for the Northern District of Texas.  In Caruth v. Chubb Lloyd’s Co of Texas et al.., the insureds submitted an insurance claim for property damage.  Chubb’s assigned adjuster retained a roofing company to investigate the loss and that company determined that the property damage was not the result of wind or hail.  The insureds claimed that the adjuster’s handling of the claim led to an underpayment and a wrongful partial denial of coverage.

In the ensuing coverage action, the insureds relied on a Texas statute under which an individual adjuster may be held personally liable for how it adjusts a claim.  According to the plaintiffs, personal liability was appropriate because the adjuster “failed to perform a proper and complete investigation of the claim;” represented that certain damages would be covered then failed to pay for such damage,” and retained the roofing company “because it was known that it would issue a report on which the claim for benefits would be denied.”

On these allegations, the court granted the insurer’s motion to dismiss.  In doing so, the court reasoned that despite the allegations, the insureds failed to adequately describe the cause of their loss or specifically allege how the adjuster’s investigation was inadequate.  According to the court, these conclusory statements were insufficient to state a cause of action for personal liability.

All insurance professionals should be cognizant of the possibility of a bad faith claim or even the imposition of personal liability.  But the Caruth decision should provide some reassurance that bald assertions, without specific allegations of bad faith claim handling, fall short of the high burden necessary to impose extra-contractual remedies.  Thanks to Michael Gauvin for his contribution to this post.  Please email Brian Gibbons with any questions.

Take My Wife… Please! (NY)

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The late Henny Youngman would have enjoyed the facts of Ostego Mutual v. Dinerman, (May 1, 2018), where a wife’s fraudulent misrepresentation in a property damage claim nearly prejudiced her husband’s, through no active fault of his own.

The Appellate Division, First Department found that one of the named insureds, Mrs. Dinerman, had committed fraud related to the policy and thus was not covered.  But the policy was not void as to defendant’s husband, also a named insured, simply due to the wife’s fraudulent acts. However, the Court found that Mr. Dinerman failed to timely file a proof of loss and as such violated the policy provisions.

Defendant, Mrs. Dinerman, was found to have violated the “Misrepresentation, Concealment and Fraud” condition of the homeowners policy issued by plaintiff when she submitted receipts for reimbursement for living expenses that she did not actually incur after a fire damaged their home. Dinerman claimed that the amount was minimal and as such it should not void the policy as to her. The Court found this argument unveiling and stated that the amount of fraudulently obtained monies is not the issue, the fact is that she violated the policy and as such it is void as to her.

As for Mr. Dinerman, the Court found that his claims under the policy would withstand his wife’s fraudulent misrepresentations and the policy is not void as against him. This is an interesting position for the Court to take in light of the fact that the policy covered a shared home and would in effect be covering some loss of Dinerman even though she violated the policy.

However, the court found that Mr. Dinerman also violated the policy in his own way, thus permitting plaintiff to decline coverage. Mr. Dinerman did not alert his insurance company about the damage or provide proof of loss within the prescribed time period. As such, the plaintiff insurance company had a right to decline coverage.

This case presents an interesting question as to whether Mr. Dinerman would have been permitted to recover under the policy absent his failure to provide proof of loss, even with his wife’s confirmed fraudulent behavior.  Thanks to Dana Purcaro for her contribution to this post.  Please email Brian Gibbons with any questions.

Court of Appeals Rejects Unavailability Rule in Long-Tail Coverage Disputes (NY)

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In Keyspan Gas East Corporation, v. Munich Reinsurance American, Inc., & Century Indemnity Company et al, the New York Court of Appeals recently rejected the “unavailability of insurance” exception in long-tail coverage disputes – i.e., where the injury is gradual and continuous and spans years in which insurance coverage was in place, as well as years in which no coverage was purchased.  We addressed the lower court’s decision from the Second Department in a prior post, on September 16, 2016.  The Court of Appeals hereby affirms that decision.

The Court of Appeals explained the courts generally use two methods to allocate liability in long-tail coverage cases – “All Sums” or “Pro Rata.” In all sums allocation, the insured can collect its total liability up to the policy limit of any policy in effect during the periods that the damage occurred. In pro rata allocation, the insurer’s liability is limited to losses during the policy period, “in other words, each insurance policy is allocated a ‘pro rata’ share of the total loss representing the portion of the loss that occurred during the policy period.” Within pro rata jurisdictions, there is a split regarding whether the policyholder should bear the risk for periods when insurance was unavailable. Keyspan marks the first instance of the Court of Appeals addressing this issue in New York.

The dispute arose around the turn of the 20th Century, when Keyspan’s predecessor,  (LILCO) built and operated several gas plants in Long Island. Long after those plants stopped operating, the New York Department of Environmental Conservation found evidence that those plants caused significant environmental damage in the surrounding areas. Because the damage occurred gradually, it was impossible to point to a specific occurrence during a specific insurance policy period.

Keyspan commenced a declaratory judgment action seeking a determination of liability owed under multiple insurance policies, including the policies Century issued. Century had issued a total of eight liability policies covering property damages between 1953 and 1969. The parties did not dispute that the environmental damage that occurred in any specific year was “unidentifiable and indivisible” from the damage as a whole. Keyspan did not dispute that it bore the risk for periods of time when insurance was available to, but not purchased by, LILCO. Because applicable coverage was unavailable for many of the years in which the harm occurred (as such policies did not exist), Keyspan argued that it should not be considered self-insured during those years, and Century should cover a share of those costs.

After decades of litigation, Century moved for partial summary judgment in 2014. The Supreme Court granted the motion in part, but held that because the harm could not be attributed to a specific time frame, that Century would have to indemnify Keyspan for the years that it provided coverage and for the years where applicable insurance coverage was unavailable. Century appealed, and the First Department held that Century did “not have to indemnify Keyspan for losses that [were] attributable to time periods when liability insurance was otherwise unavailable in the marketplace.” The First Department, recognizing that this was an issue of first impression in New York, certified the question to the Court of Appeals to decide whether their order was properly made.

The Court of Appeals discussed the split in pro rata jurisdictions about whether the policyholder should bear the risk for periods when insurance was unavailable. Some jurisdictions apply an “unavailability rule,” which functions as an exception to the general rule that the policyholder is considered self-insured for periods when they are without insurance coverage. In those jurisdictions, each insurance policy is allocated a ‘pro rata’ share of the total loss representing based upon the portion of the loss that occurred during its policy period and periods when such coverage was unavailable. According to the Court of Appeals, jurisdictions that have adopted the unavailability rule had “done so by relying heavily on public policy concerns and a desire to maximize resources available to claimants against a policyholder.”

In New York, there is no set rule to determine when to apply “all sum” or “pro rata” allocation. The Court explained under its prior precedent, the method of allocation was determined “foremost . . . by the relevant insurance policy.” In the Court’s prior cases, it analyzed policy language similar to that in the applicable Century policies, which limited the insurer’s liability to losses and occurrences happening “during the policy period.” There, the Court held that “pro rata allocation – rather than all sums allocation – was more consistent with such policy language because ‘the policies provide indemnification for liability incurred as a result of an accident or occurrence during the policy period, not outside that period.’” (quoting Consolidated Edison Co. of N.Y. v Allstate Ins. Co., 98 NY2d 208, 224 (2002)).

According to the Court, it followed from the Consolidated Edison holding that the unavailability rule was inconsistent with the “during the policy period” limitation language that formed the foundation for the pro rata approach. To assign risk to an insurer for years outside the policy period would ignore not only the contract language, but also the pro rata approach. In addition, applying the unavailability rule would effectively provide coverage for years in which no premiums were paid. Moreover, while jurisdictions that applied the “unavailability rule” focused on public policy, the Court noted that foreseeability is a critical aspect of the insurance industry’s ability to spread risk.

The Court concluded that here, applying the “unavailability rule” would require ignoring Century’s policy language. This would be inconsistent with New York’s emphasis on policy language. Because the rule could not be reconciled with the pro rata approach, the Court refused to apply the unavailability rule.   Thanks to Evan King for his contribution to this post.  Please email Brian Gibbons with any questions.

No Coverage to Insured Where it did Not Cause the Damage

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In Consolidated Rail Corporation v. ACE Property & Casualty, Consolidated Rail owned/operated several freight yards and geographical sites from 1976-1999.  During that time, the Environmental Protection Agency conducted studies at several of the Conrail locations.  The EPA found that many of the sites were contaminated with toxins resulting from toxin spills, waste storage, and other harmful practices that occurred before Conrail owned/operated the properties.  Nevertheless, because Conrail owned/operated the properties, it was responsible for the remediation costs and related expenses, for which it paid millions of dollars.  Conrail then sought coverage from its insurers who denied coverage.  The relevant policy language stated:

“TO INDEMNIFY THE INSURED FOR ANY AND ALL SUMS THE INSURED SHALL BECOME LEGALLY LIABLE TO PAY AS DAMAGES, INCLUDING LIABILITY ASSUMED BY THE INSURED UNDER ANY AGREEMENT OR CONTRACT, TO ANY PERSON OR PERSONS AS COMPENSATION FOR:

* * *

(b) DAMAGE TO OR DESTRUCTION OF PROPERTY, INCLUDING LOSS OF USE THEREOF, EXCLUDING INSURED’S OWN PROPERTY BUT INCLUDING PROPERTY OF OTHERS IN INSURED’S CARE, CUSTODY OR CONTROL;

* * *

ARISING OUT OF ANY OCCURRENCE OR OCCURRENCES CAUSED BY OR GROWING OUT OF THE INSURED’S OPERATIONS ANYWHERE IN THE WORLD, AND ALL OPERATIONS INCIDENTAL THERETO.

* * *

Occurrence means an event, or continuous or repeated exposure to conditions which cause injury or damage during the term of the policy.”

Conrail sued and the court interpreted “CAUSED BY OR GROWING OUT OF” to allow Conrail to be reimbursed for environmental contamination only if Conrail caused the damage.  The environmental contamination occurred before Conrail owned/operated the properties, and Conrail did not cause any of the damage.   Consequently, the trial court ruled Conrail was not entitled to coverage under the policies.  The trial court recognized that “The result is somewhat unusual-where Conrail did nothing wrong, it is not covered, but where it is at least partially at fault, it is entirely covered.”  On appeal, the Superior Court upheld the “sound analysis” of the trial court.

This case highlights the importance of careful drafting/reading of insurance policies.  Many individuals may disagree with the Court’s decision from a fairness standpoint, but it is one that the policy language dictated.  Depending on the policy language, being at fault may be a good thing.

Thanks to Malik Pickett for his contribution to this post.

 

 

The Only Exception (To A Policy Exclusion)

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In Jack Trocki Dev. Co., Inc. v. Robert H. Wise Management Co., Inc., a Pennsylvania held it is the insured’s burden to establish that an exception to an exclusion is applicable, thus, placing its claim within the coverage of a policy.

By way of background, the plaintiff-insured owned a condominium unit that was insured by the defendant-insurer.  The plaintiff’s property allegedly sustained water damage and, as such, the plaintiff submitted a claim to its insurer.  In response to the claim, the insurer conducted an investigation by retaining a civil engineer to perform an inspection of the property.  Ultimately, the engineer concluded there was no evidence of an occurrence.  The insurer denied the insured’s claim, as the policy did not provide coverage for damage caused by wear and tear.

In determining whether the denial was proper, the court looked to the policy language.  The court noted that the insurer agreed to pay for damages caused by a “Covered Cause of Loss”, which excluded from coverage certain types of losses caused by wear-and-tear.  However, the policy carved out an exception by stating if an excluded cause of loss, such as wear-and-tear, resulted in a “specified cause of loss”, then there would be coverage under the policy.  Water damage was listed as a “specified cause of loss”.  Water damage, however, was defined by the policy, in part, as: “accidental discharge or leakage of water or steam”.  The court reasoned that although the insured claimed that his property was damaged by water, the insured did not establish the water damage was caused by accidental discharge or leakage.  Rather, the only evidence produced indicated that the damage was caused by normal wear and tear.  Consequently, the court concluded the insured failed to establish the exception to the exclusion was applicable and, thus, no coverage was provided under the policy for the insured’s claimed loss.

As a general matter, under Pennsylvania law, an insured carries the burden of establishing his or her claim is covered under the policy.  This case supports the proposition that Pennsylvania courts extend this burden to requiring an insured to establish that an exception to an exclusion provides coverage under the policy.

Thanks to Colleen Hayes for her contribution to this post.

 

 

 

Privity Required for AI Coverage

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In a recent decision, the New York Court of Appeals highlighted the perils of awkward policy wording in additional insured endorsements on construction contracts.  The Court’s focus on one word in the endorsement meant that the owner’s construction manager was not entitled to additional insured status on the general contractor’s policy.  In light of the inconsistent treatment regarding whether “blanket” additional insured endorsements require direct contractual privity, parties should be very conscious of the particular language in their additional insured endorsements going forward.

In Gilbane Building Co./TDX Constr. Corp. v. St. Paul Fire and Marine Ins. Co., the contract between the owner and the construction manager required the general contractor, whether retained by either party, name the construction manager as an additional insured s.  Ultimately, the owner retained the general contractor, and as such, was not in direct contractual privity with the construction manager.  The general contractor’s policy endorsement stated that additional insureds included “any person or organization with whom you have agreed to add as an additional insured by written contract . . .” (emphasis added).  After the excavation work on the project resulted in structural damage, the owner sued the architect, who in turn sued the construction manager.  When the construction manager sought coverage under the general contractor’s policy, the insurer denied coverage on the ground that it was not an additional insured under the policy.

The Court of Appeals held that the blanket endorsement was “facially clear” and the phrase “with whom” “can only mean that the [named insured’s] written contract must be ‘with’ the additional insured.”  Thus, because the general contractor did not enter into a contract “with” the construction manager, the construction manager was not someone “with whom” they had agreed to include as an additional insured.  Significantly, the court also said that, absent the word “with”, the construction manager would have been covered under the policy.

This ruling emphasizes the importance of specific wording in additional insured endorsements.  Going forward, project managers retained by owners may insist on reviewing the insurance procured by the owners’ contractors to avoid a similar result.  At the very least, the parties need to carefully review the scope of their coverage before the commencement of a project to avoid unintended consequences.

Thanks to Douglas Giombarrese for his contribution to this post.

 

Employee Thefts Constitute Single Occurrence Under Policy Language (PA)

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The Eastern District of Pennsylvania recently ruled that an insurer did not need to pay more than its single occurrence policy limit in connection with a $3 million employee theft claim.  In Wescott Electric Company v. Cincinnati Insurance Company, the Court granted Cincinnati Insurance Company’s (“Cincinnati”) motion to dismiss the claims brought against it for its failure to provide additional coverage.

This lawsuit was initiated by Wescott Electric Company (“Wescott”) after a Wescott employee stole almost $3 million from the company between 2003 and 2013.  During the relevant period, Wescott had four consecutive insurance policies from Cincinnati.  Each policy lasted for three years with the fourth policy beginning in 2013.  Importantly, the employee’s theft was discovered during the policy period of the fourth policy.  As a result, Cincinnati paid Wescott the policy limit of $100,000 for a single “occurrence” of employee theft.

Wescott’s breach of contract claim against Cincinnati was two-fold.  First, Wescott argued that it was entitled to coverage under the 2013 policy as well as under the 2010 policy.  Second, Wescott argued that the employee’s theft constituted more than one “occurrence” under either the 2010 or 2013 policy.  In response, Cincinnati filed a motion to dismiss.  The Court ruled in Cincinnati’s favor, stating that Wescott was only entitled to coverage for a single “occurrence” of employee theft under the 2013 insurance policy.

The Court reached its conclusion in two separate steps.  First, the Court determined that only the 2013 policy provided coverage to Wescott because the theft was not discovered until after the 2010 policy ended.  In reaching its decision, the Court flatly disagreed with Wescott’s request to rewrite its 2010 policy to expand the period of coverage.

By way of background, the four consecutive insurance policies did not contain uniform language.  Specifically, the policies issued in 2004 and 2007 stated that Cincinnati “will pay only for covered loss discovered no later than one year from the end of the policy period.”   These policies ended in 2007 and 2010, respectively, and the employee’s theft was not discovered until 2013.  Thus, neither the 2004 or 2007 policies provided Wescott with coverage.  Significantly, the 2010 and 2013 policies contained more limited discovery language.  These policies stated that Cincinnati’s coverage only applied to losses which were discovered by Wescott during the policy period, rather than one year from the end of the policy period as in the 2004 and 2007 policies.

Essentially, Wescott requested that the Court rewrite the 2010 policy to include the larger, one-year discovery window found in its 2004 and 2007 policies.  Wescott argued that it reasonably expected the 2010 policy to contain the same one-year discovery window as the former policies and was not put on notice of the change.  The Court disagreed with Wescott’s position, finding that its contention was insufficient to rewrite the 2010 policy.  In so finding, the Court emphasized a “Notice to Policyholders” issued by Cincinnati in 2008 that announced the change in discovery-based coverage.

Furthermore, the Court referenced Standard Venetian Blind Company v. American Empire Insurance Company when explaining that because the exclusions in the policy were clearly worded and conspicuously displayed, the insured could not avoid their enforcement simply by arguing that he failed to read or did not understand them.  Applying the case to the instant matter, the Court determined that the Cincinnati discovery period language was far more “conspicuously displayed” than even the language in Standard Venetian.  The Court also pointed out that the discovery period language was the very first paragraph of the “Commercial Crime Coverage Form.”

Second, the Court determined that only one “occurrence” of employee theft had transpired under the 2013 policy.  In reaching its conclusion, the Court mainly relied on the plain meaning of “occurrence” found in the definition section of the “Commercial Crime Coverage Form.”  Specifically, the Court found the language in the definition to be unambiguous and stated that the employee’s “series of acts” in stealing from Wescott qualified as a single “occurrence” because they were “committed” by a single employee both before and during the relevant policy period.  Therefore, the Court concluded that the definition limits the amount of coverage for all thefts occurring during the 2013 policy period to $100,000.

Thanks to Zhanna Dubinsky for her contribution for this post.  Please write to Vito A. Pinto for further information.

No Additional Insured Coverage for Grossly Negligent Strip Mall Owner (NJ)

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In Moran-Alvardo v. Nevada Court Realty, LLC, the plaintiff fell on snow and ice in the parking lot of a strip mall where Dunkin Donuts was a commercial tenant. Plaintiff sued Dunkin Donuts and the strip mall owner due to the injuries he allegedly incurred from the fall. Subsequently, the strip mall owner filed a third-party complaint against Dunkin Donuts pursuant to a contractual indemnification provision in its lease agreement.

In the trial court, the parties stipulated that the strip mall owner was contractually obligated to remove ice and snow in the area of plaintiff’s fall. According to plaintiff, snow and ice had not been “touched.” Thereafter, the trial court held that the strip mall owner’s failure to remove snow and ice three days after the last snow fall constituted gross negligence. The trial court also noted that the lease agreement indemnified the strip mall owner for negligence—but not gross negligence or willful misconduct. As such, Dunkin Donuts was relieved from its contractual responsibility to indemnify the strip mall owner, but Dunkin Donut’s insurer was still ordered to defend the strip mall owner.

The insurer challenged the trial court’s decision, finding that the strip mall owner was entitled to coverage under the policy’s additional insured provision. The insurer argued that it was irreconcilable to require it to provide coverage to the strip mall owner when the trial court already found that the strip mall owner was grossly negligent. Citing prior precedent, the insurer argued that its obligation to provide coverage to a named additional insured (the strip mall owner) must be “coextensive with scope of [the] tenant’s own liability.”

The Appellate Division held in favor of the insurer and reversed the trial court’s order that required defense of the strip mall owner. The Appellate Division reasoned that the lease agreement only obligated Dunkin Donuts to maintain a CGL policy naming the strip mall as an additional insured and the resultant policy expressly excluded the strip mall’s grossly negligent conduct.

Thanks to Ken Eng for his contribution to this post and please write to Mike Bono with any questions.

Settlement with Insurer Not a Basis for Dismissal of Claims Against Brokers

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In Prime Alliance Group Ltd v Affiliated FM Insurance Company, the insured, was the owner of a mixed use condominium and retail property in Manhattan.  The Property suffered significant flood damage during Superstorm Sandy in October 2012, and a claim (for upwards of $30M) was made to Affiliated.  Following Affiliated disclaimer of coverage for the property damage (the bulk of the claim), Prime Alliance sued alleging claims of breach of contract, bad faith and estoppel as against Affiliated, and claims of negligence and breach of contract against their retail insurance broker, Praxis, and claims of negligence against HUB, the wholesale insurance broker.  The claims asserted against HUB and Praxis were premised on the brokers’ alleged failure to procure adequate and requested insurance coverage.

Praxis and HUB moved to dismiss on the basis that a settlement reached between Prime Alliance and Affiliated mooted the separate claims against the broker defendants.  The lower court granted the motion since the insurer that settled with the Plaintiff and was no longer a party to the action, “and Affiliated is the only party which could (or would) raise a defense that the contract did not provide the flood coverage at issue, there can be no finding in this case contrary to plaintiff’s claim that the disputed coverage did in fact exist.  Thus, there can be no finding that Praxis [or HUB] was responsible for a lack of coverage.”

The Appellate Court disagreed, finding that Affiliated’s settlement with plaintiff left the question of the validity of its disclaimer entirely undecided, and provided no basis for the motions to dismiss and for summary judgment filed by the broker defendants.  Putting a fine point on the matter, the Appellate Division specifically stated that the decisions granting both the Praxis and HUB motions were based “on the incorrect premise that the plaintiffs’ settlement with Affiliated precluded the plaintiffs from pursuing their causes of action to recover damages for failure to procure insurance.”

The matter was to be reinstated in the New York Supreme Court for adjudication.  In the short term, this decision provides a sound argument to rebut an argument that a plaintiff’s settlement with their insurer effectively moots any claims for negligence asserted against brokers.

Thanks to Vivian Turetsky for her contribution to this post.