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Post 4809
Many companies find that a single policy of liability insurance is inadequate and purchase multiple layers or insurance. Many times the policies follow each other’s terms and conditions, but not always. Thermoflex Waukegan obtained several lawyers of coverage but did not require the terms and conditions of each policy to be the same.
In Thermoflex Waukegan, LLC v. Mitsui Sumitomo Insurance USA, Inc., Nos. 23-1521, 23-1578, United States Court of Appeals, Seventh Circuit (May 17, 2024) reviewed the trial court decision.
Thermoflex Waukegan required hourly workers to use hand prints to clock in and out. This led to a claim that doing so without workers’ written consent, and using a third party to process the data, violated the Biometric Information Privacy Act, 740 ILCS 14/1 to 14/20 (BIPA or the Act).
THE TRIAL COURT
The trial court concluded that an exclusion in the Basic policy renders it inapplicable to any claim based on the Act. The exclusion provides that the insurance does not apply to claims arising out of any access to or disclosure of any person’s or organization’s confidential or personal information, including patents, trade secrets, processing methods, customer lists, financial information, credit card information, health information or any other type of nonpublic information.
ANALYSIS
Thermoflex maintained that this policy is ambiguous because the exclusion mentions patents, which are public. True, the list contains mismatched items. But it can’t create ambiguity about either the opening phrase of the exclusion: “any person’s or organization’s confidential or personal information” or the catchall “any other type of nonpublic information.”
The Seventh Circuit found it was enough that the exclusion in this policy does not have a flaw.
DUTY TO DEFEND
The Excess and Umbrella policy, on the other hand, has two parts. Coverage U (for “Umbrella”) lacks an exclusion relating to nonpublic information. It does not matter what Coverage U includes; the parties agree that it covers BIPA claims unless something excludes coverage. The trial judge found that none of the three arguably applicable exclusions to Coverage U is so clear that it forecloses a duty to provide Thermoflex with a defense in the state-court suit.
The third exclusion, which the parties call the “ERP exclusion” (for “employment-related practices”) bars coverage of injury arising out of: a) refusal to employ that person; b) termination of employment of that person; or c) coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, malicious prosecution, discrimination, sexual misconduct, or other employment-related practices, policies, acts, or omissions directed towards that person. Parts (a) and (b) of this exclusion don’t have anything to do with BIPA claims. Mitsui relied on part (c) contending that collecting and processing handprints to determine how much time an employee spends at work is an “employment-related practice”. The Seventh Circuit concluded that a general policy requiring all hourly workers to place their hands on a scanner is an employment-related practice but is not “directed towards” any given employee. It is just a term or condition of employment, and this exclusion taken as a whole is not concerned with the terms and conditions of employment so it does not prevent coverage for a defense.
The Umbrella policy provides for defense and indemnity only after underlying insurance (and deductibles, which the policies call self-insured retentions) has been exhausted.
Because Thermoflex has at least one other policy that applies to the BIPA claims the duty to defend does exist under the Umbrella does not begin until the limits of that policy (plus deductibles) have been exhausted.
With that proviso-which is part of the district court’s decision and judgment, Mitsui owes Thermoflex a defense under the Umbrella policy.
ZALMA OPINION
When primary or basic insurance policies provided limited coverages and an umbrella provides more expansive coverage, the duty to defend applies to the umbrella insurer once a primary or basic insurer expends its limits plus self-insured retentions. The decision eliminated coverage for some insurers and found a duty to defend exists for other coverages. To avoid such a result many insurers who write umbrella policies follow the basic insurer’s policy terms and conditions. Mitsui didn’t and must provide a defense under the umbrella policy.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
