Source: https://ncbarblog.com/category/ins/page/2/
Timestamp: 2019-04-24 06:20:56+00:00

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A newly published LexisNexis Practice Guide entitled “North Carolina Insurance Litigation (2018 edition)” is now available. This publication was authored and edited by members of the Pinto Coates Kyre & Bowers PLLC firm, most of whom are members of this Section. Some other attorneys from around the state were also contributing authors, many of whom are also members of this Section. The Guide is a primer on the provisions and construction of the most common types of insurance policies, and includes tips for practitioners representing both insurers and policyholders. The book was written by lawyers for lawyers and insurance professionals, but may provide some insight for others interested in the topic.
In a recent unpublished decision, the North Carolina Court of Appeals reviewed whether an insurer’s handling of a claim constituted, inter alia, an unfair and deceptive trade practice. Jackson v. Century Mutual Ins. Co., 2017 WL 3863901 (N.C. App. 2017). Split 2-to-1, the Court ultimately affirmed summary judgment for the insurer.
Jackson involved a claim under a homeowners’ liability policy after the insureds’ home was severely damaged in a fire. In submitting their claim to Century, the Jacksons sought relief under their Dwelling, Loss of Use, and Contents coverages. Unsatisfied with the amounts they were compensated and with Century’s handling of their claim, the Jacksons filed suit against Century, alleging Unfair and Deceptive Trade Practices, Breach of Contract, Bad Faith, and Infliction of Mental or Emotional Distress. In claiming that Century committed unfair and deceptive trade practices, the Jacksons sought relief under Chapters 58 and 75 of the General Statutes; specifically, the homeowners claimed a violation of N.C. Gen. Stat. § 58-63-15(11) also violated N.C. Gen. Stat. § 75-1.1. Finding no genuine issue of material fact, the trial court granted summary judgment in favor of Century.
A recent ruling by the federal district court in Raleigh, NC highlights the different treatment the courts give to the late notice defense under a claims-made liability insurance policy versus an occurrence-based policy. The insurer has a clearer opportunity under claims-made policies to defeat coverage when the insured’s notice of a claim is late. The United States District Court for the Eastern District of North Carolina in the case of John Hiester Chrysler Jeep LLC v. Greenwich Ins. Co., 2017 WL 6210897 (E.D.N.C. December 8, 2017), rejected the policyholder’s argument that prejudice must be shown by the insurer under a claims-made policy before coverage can be avoided due to late notice.
What happened in John Hiester is a lesson for all coverage lawyers. Claims-made policies are different. They contain traps for the unwary. One such trap is notice. In John Hiester, the claims-made policies at issue were two similar employment practices liability (“EPLI”) policies.
The South Carolina Supreme Court issued a decision on July 26, 2017, which provides some good information regarding the purposes and requirements of reservation of rights (ROR) letters. The Court held in Harleysville Group Insurance Corporation v. Heritage Communities, Inc., 803 S.E.2d 288 (S.C. 2017), that an insurer’s ROR letter in a construction defect case was insufficient to reserve its right to contest coverage. Harleysville filed a declaratory judgment action seeking a judicial determination that it had no duty to indemnify its insureds (the developers and general contractors of two condominium complexes) regarding judgments entered against them in the underlying lawsuits or, alternatively, if any of the damages awarded in the underlying lawsuits were found to be covered, Harleysville sought an accounting to determine what parts of the underlying jury verdicts constituted covered damages.
After fruitless negotiations with an insurance adjuster, you file suit and an attorney is retained to represent the defendant. You have been dealing with the adjuster on this and other claims over many years and have developed a relationship, and when your client calls you saying to settle on any terms because she needs the money, you know that the quickest response will come if you call the adjuster. Does the ethical bar on contacting the attorney’s client extend to the insurance company as well as the insured?
The North Carolina Court of Appeals recently held that, where an insurer settles with a pro se claimant and issues a settlement check to the claimant, the insurer must pay off any valid medical provider liens pursuant to N.C. Gen. Stat. §§ 44-49 and 44-50 before making any payment to the claimant. Nash Hosps., Inc. v. State Farm Mut. Automobile Ins. Co., 803 S.E.2d 256 (N.C. App. 2017). A check made payable jointly to the claimant and the lienholder will not suffice; in fact, it violates the lien statute and is an unfair and deceptive trade practice.
The Insurance Law Section has a new medium for giving you insurance news – a blog. We have moved away from a newsletter format and now embrace the blog format. Welcome. I am the chair of the Insurance Law Section this 2017-18 year. We have an exciting year ahead of us. Let me give you a quick snapshot.
We are moving the annual meeting/CLE from the April date to a January date. It will be Wednesday, Jan. 31, at the NC Bar Center on Weston Parkway in Cary. The CLE program co-chairs are Alan Ruley and Deb Bowers. You will soon receive a brochure about the CLE, and I encourage you to register and attend.
On Aug. 1, 2017 the North Carolina Court of Appeals issued a decision which provides two helpful takeaways for the insurance law practitioner. In Plum Properties, L.L.C. v. N.C. Farm Bureau Mut. Ins. Co., 2017 N.C. App. LEXIS 607, Plum Properties, L.L.C. (Plum) filed a tort action against two minors and their mothers, alleging that the minors “intentionally, willfully and maliciously” vandalized four houses owned or managed by Plum, causing $58,000 in damage and that the mothers were also liable for the damages based on negligent supervision of their minor children. Both mothers had homeowners insurance policies with Farm Bureau which provided personal liability coverage for “property damage caused by an occurrence” (occurrence defined as an accident), but contained the standard “expected or intended injury” exclusion, which excludes coverage for “property damage which is intended by or which may reasonably be expected to result from the intentional acts or omissions or criminal acts or omissions of one or more insured persons.” Plum filed a declaratory judgment action against Farm Bureau seeking a declaration that the damages alleged in the underlying tort action are covered by the mothers’ homeowners policies. The Court of Appeals affirmed summary judgment for Farm Bureau.

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