Friday, June 8, 2018

First Circuit affirms coverage for defamation claims against Bill Cosby

I've posted here, here, and here about the declaratory judgment lawsuit brought by AIG Property Casualty Company asserting that it has no duty to defend Bill Cosby in the defamation lawsuits brought against him.  Those suits allege that Cosby lied when he denied allegations of rape, thereby defaming his accusers.
In AIG Property Casualty Co. v. Cosby, __ F.3d __, 2018 WL 2730762 (1st Cir.), the United States Court of Appeals for the First Circuit has affirmed the decision of the United States District Court for the District of Massachusetts holding that AIG must defend Cosby. 
The AIG homeowner's and umbrella policies provide coverage for defamation claims.  The issue in dispute is whether  exclusions for claims "arising out of" sexual misconduct apply.  The District Court had held that the meaning of arising out of is ambiguous and therefore AIG must defend. 
The court noted that in a different coverage of the umbrella policy there is an exclusion for damages "arising out of, or in any way involving, directly or indirectly, any sexual misconduct."  The exclusion applicable to the defamation claim did not include that specific language.  Since every word in an insurance contract must be presumed to have meaning, the less specific language in the applicable exclusions must be interpreted as requiring a closer connection between the alleged defamation and the alleged sexual assaults. 
The court added that the phrase arising out of is not inherently ambiguous, and that its holding is limited to this case, where the ambiguity question is close to begin with and where a similar exclusion in the same policy was more broadly worded. 

Thursday, June 7, 2018

U.S. District Court weighs in on innocent coinsured doctrine

Massachusetts Lawyers Weekly quoted me in an article about Shepperson v. Metropolitan Prop. & Cas. Ins. Co., 2018 WL 2324089 (D. Mass.), in which the United States District Court for the District of Massachusetts addressed the innocent coinsured doctrine.  That doctrine applies to property policies that insure more than one person.  If one of them commits an intentional act that causes damage to the insured property, that insured is not covered because damages from intentional acts are excluded.  Under the innocent coinsured doctrine, the other, innocent, insured person also cannot recover under the policy. 
In Shepperson, the court held that an insured homeowner cannot be denied coverage for a fire loss even if the fire was set by another household member who is an insured on the homeowner’s policy, as long as two conditions are met.  First, the homeowner did not participate in the arson.  Second, the household member was made an insured by the operation of the policy language, such as a definition of insureds that includes any relatives who are household members, rather than by a conscious decision to make them an insured listed by name on the policy.   
The case started in Massachusetts state court and was removed by the insurer to federal court.  The federal judge predicted that even though a 1951 decision of the Massachusetts Supreme Judicial Court held that there was no coverage for the innocent coinsured under similar facts, if the case were before the SJC today it would hold that there is coverage.  He based that prediction on changes to the statute regulating fire insurance policies and on Massachusetts Superior Court decisions. 

Thursday, May 31, 2018

Massachusetts Appeals Court interprets alcohol exclusion in PIP coverage

Margarita Rodriguez was injured in an auto accident. A police report indicated that an occupant of the other vehicle said that Rodriguez's car "came out of nowhere."  The report did not provide any other statements with respect to causation.  It did not indicate whether alcohol was involved in the crash.
Rodriguez was taken to the hospital.  Hospital records indicated that she was intoxicated. 
Rodriguez's insurer was Commerce. Commerce refused to reimburse a medical provider under PIP coverage, citing an exclusion applicable if the insured "contributed to his or her injury by operating an auto while under the influence of alcohol." 
The Massachusetts Appeals Court overturned the granting of summary judgment to Commerce.  In Dorchester Chiropractic & Rehab Centers Inc. v. Commerce Ins. Co., 2018 WL 2247343 (Mass. App. Ct.) (unpublished), the court held that the exclusion required that two distinct elements be met: (1) the insured was operating under the influence of alcohol, and (2) the insured's conduct contributed to her injury.
The court held that there was no evidence showing how the car accident occurred, or of how Rodriguez contributed to it.  Therefore, the second element necessary for the exclusion to apply was not met. 
The court also held that whether or not Rodriguez was under the influence of alcohol at the time of the accident was a disputed question of fact, since the police officer who had interacted with her at the accident scene did not mention alcohol in the police report. 

Monday, January 1, 2018

Massachusetts Appeals Court holds that under New Hampshire law insurer can settle claim over objection of insured

Dr. Ellen Johnson was sued for medical malpractice.  She was insured by Proselect.  A jury found against Johnson and awarded her patient $5 million in damages. 
The Proselect policy gave Proselect the right to settle a case after verdict without the consent of the insured.  Proselect chose not to file post-trial motions or to appeal.  Instead, it settled the case for $3.75 million, an amount within Johnson's $4 million coverage limit. 
Johnson then sued Proselect, alleging that it breached its duties to her by settling the case without her consent.  She asserted that the settlement harmed her professional reputation and her career prospects and caused her emotional distress. 
In Johnson v. Proselect Ins. Co., 92 Mass. App. Ct. 1118, 2017 WL 6327844 (unpublished), the Massachusetts Appeal Court affirmed summary judgment to Proselect.  Applying New Hampshire law, it held that the duty of reasonable care in the defense of a claim applies only where the insurer's misconduct exposes an insured to personal liability.  Because the settlement extinguished the excess judgment, Proselect had met its duty of reasonable care and did not violate the covenant of good faith and fair dealing. 

The lesson here:  If you want to have control over whether or not a case against you will be settled, buy a policy that gives you that control.   

Tuesday, September 12, 2017

I'd like to thank my kindergarten teacher, my wonderful colleagues, my family, and . . .

especially Randy Maniloff of Coverage Opinions for giving me a prize for coming up with one of the best vanity license plates that only others in the insurance coverage world would understand.  (If you don't feel like clicking on the link, my submission was QMIS CSL.) 
My kids were incredibly impressed by the pen that accompanied the prize.  It's possible that I am more excited by my forthcoming free copy of Randy's book, General Liability Insurance Coverage: Key Issues in Every State. 
It is a thrill and an honor to be associated with Coverage Opinions, one of the best and most interesting publications on coverage issues. 

Tuesday, August 29, 2017

Insurers will use drones to assess Hurricane Harvey damage

I wrote here a couple of years ago about the increasing use of drones in assessing property damage after large weather events.  At the time I was concerned that use of drones would actually decrease efficiency in assessing claims. 

Slate has an article here about the planned use of drones after Hurricane Harvey.  It does look like the use of drones will allow insurers to more quickly assess external damage to numerous properties than would be possible with adjusters being present for each inspection.  An important feature of the use of drones is that they can take pictures where it would be unsafe for adjusters to venture.  But, as the Slate article points out, there is also a downside: since the adjusters will not be physically present at the property, the face to face interaction between the insurer and the policyholder is lost.  Given the scale of destruction expected from Harvey, that seems like a reasonable tradeoff for speed and safety of damage assessments.

Wednesday, August 23, 2017

Invitation: Come to my September 12 panel discussion on lawyer's professional liability insurance and what happens if you get sued

On Tuesday September 12, 2017 at 7:30 AM John Torvi of Landy Insurance and I will be speaking at the Business Lawyer’s Network in Waltham, Massachusetts on the topic of Your Lawyer’s Professional Liability Policy and What Happens If You Get Sued.  This program is free and should be of interest to attorneys from all practice areas.  You do not need to be a member of BLN to attend.  
Here’s a full description of the panel discussion and a link to sign up: 
Your Lawyer’s Professional Liability Policy and What Happens if You Get Sued 
Date: Tuesday, September 12, 2017, at 7:30 am
Place:  Morse, Barnes-Brown & Pendleton, P.C. City Point, 230 Third Avenue, 4th Floor, Waltham, MA 02451
You can sign up at  Click on “Register.”  It is not necessary to print tickets.
Learn about  your legal malpractice insurance plan, the scope of protection, and insurance defense and coverage issues in a claim or lawsuit.
•             Dissecting a Lawyer’s Professional Liability Insurance Policy, including whether what  is written  in  the annual application matters, the declarations page, who and what                 is  covered, and the optimal limits and deductibles.
•             Insurance issues that may arise when there is a claim against you, including the duties of the insurer and insured, declinations to defend or a defense under a “reservation of rights,” and settlement.
•             Simple risk management techniques to avoid malpractice claims.
Attorney Nina Kallen, a member of the Business Lawyers Network, is a solo practitioner in MA who specializes in insurance coverage and bad faith litigation.  She also drafts dispositive motions and appellate briefs on a subcontract basis for other attorneys in all areas of civil litigation. Attorney Kallen is a graduate of Northeastern University School of Law and Yale University.  Attorney Kallen authors an award‐winning blog, Insurance Coverage Law in Massachusetts, You can learn more about Attorney Kallen at her website,
John Torvi is the Vice President of Marketing & Sales at the Herbert H. Landy Insurance Agency of Needham, MA. John has been in the insurance industry, focusing on the needs of business owners, for almost 25 years. He is a frequent speaker and contributor to professional journals and conferences for the legal industries.  The Landy Agency is a national leader in providing professional insurance services for attorneys, real estate professionals and accountants. John can be reached at 781‐292‐5417 or Or visit for more information.

Business Lawyers Network (BLN) is comprised of lawyers concentrating in complementary disciplines such as corporate, securities, commercial contracts, government contracts, secured lending, taxes, litigation, import/export, immigration, real estate, environmental, patents, trademarks, licensing, etc. Non-lawyer business professionals are also welcome, but the topic and focus of discussion will be on lawyers and the legal profession.
I hope to see you there.