Insurance Services – Coverage & Bad Faith Litigation

We received a defense verdict after bench trial in an insurance exclusionary clause dispute. The plaintiff’s personal property in a storage unit was damaged when a municipal water main broke outside the storage facility. The claims representative offered the full policy limits before trial. However, the plaintiff sought recovery of the full claim amount for her damaged property. We argued that her recovery was specifically excluded by the water damage exclusion provision within her insurance policy. The judge agreed and concluded that the water main was part of a containment system for water and the exclusionary clause was applicable.

We won dismissal of the plaintiff’s appeal of a defense verdict. Our client issued a professional liability insurance policy to the plaintiffs. When the plaintiffs were sued for legal malpractice, they notified our client of the suit and asked them to provide counsel to defend the matter. However, the plaintiffs never agreed to counsel proposed by our client. The plaintiffs then proceeded to mediation in the legal malpractice action and settled the matter without notifying our client. As a result, our client denied the plaintiffs’ request for indemnification. The plaintiffs then brought suit against our client for breach of contract and bad faith, alleging they wrongly denied indemnification and failed to provide counsel. The matter went to jury trial from April 8–11, 2024, where we successfully defended our client as the jury returned a defense verdict. The plaintiffs filed post-trial motions and then appealed the decision to the Superior Court of Pennsylvania, arguing the trial court erred in allowing the jury to see a copy of the insurance contract during their deliberations. The Superior Court dismissed the appeal and found that the plaintiffs waived their argument by failing to cite relevant legal authority in their appellate brief. The Superior Court also stated in a footnote that, should the court have reached the issue on appeal, it would have found it meritless because the insurance contract was a central piece of evidence to which the plaintiffs did not object during trial.

We were granted summary judgment in a coverage matter. The plaintiff was seeking UM benefits for a policy he had on a car he owned for an accident that occurred when he was operating a motorcycle he owned, but did not insure. The court confirmed that the policy excluded underinsured motorist coverage for the plaintiff’s motorcycle. The issue was that the definition of “motor vehicle” for the other owned motor vehicle exclusion was not specifically provided in the policy. In the PIP coverage, the policy contained an exclusion for motorcycles because the definition said motor vehicles must have four wheels. The plaintiff argued that the same policy said a motorcycle was not a motor vehicle for PIP coverage, but was a motor vehicle for the other owned vehicle exclusion. This was an ambiguity in the policy that should be interpreted against the carrier. The plaintiff had significant injuries that far exceeded the value of the policy. The court upheld both exclusions and followed our argument that the PIP and UM portions of the policy are separate and distinct and that any definition in the PIP coverage did not necessarily apply to the UM coverage. 

We successfully overturned a $1.8 million judgment on appeal in a case that involved the Laidlow exclusion in a workers’ compensation/employers liability policy. The decedent succumbed to heat exhaustion while at work, and the plaintiff alleged the death was due to working conditions the employer knew were substantially certain to lead to injury. Our client, the insurer, offered to defend the employer, but only to the extent of obtaining dismissal of the workers’ compensation claim, which was filed in the wrong forum. The insured rejected the offer, and suit for the injury and coverage claims commenced. At summary judgment, the trial court refused to apply the policy’s clear and prominent Laidlow exclusion barring all coverage for claims in the Superior Court whether alleged as negligent or intentional. The trial court entered judgment in the amount of the arbitration award and awarded defense costs for the Laidlow suit, costs of the declaratory judgment action and interest. The matter went up on appeal. After briefing, but before argument, the New Jersey Supreme Court released the Rodriguez decision, which validated our client’s position on application of the Laidlow exclusion and went even further to hold that the employer’s liability carrier has no obligation to provide a defense for the common law negligence claims filed in the Superior Court. The trial court refused to apply the principles enunciated by the appellate division in the Rodriguez decision and refused to apply the reasoning of a second unpublished appellate court decision directly on point. The trial court simply ignored the cases, reasoning they were unpublished. Prior to oral argument in our matter, the Rodriguez decision was published, and the plaintiffs abandoned the case, settling for nuisance value.

We succeeded in striking a $4.1 million default judgment entered in the Philadelphia Court of Common Pleas by a plaintiff who alleged defective residential construction. We convinced the court that Pennsylvania Prothonotaries and Clerks of Court lack authority to accept a praecipe to enter a default judgment in a specified amount unless the amount is approved by a judge or is a sum certain, meaning that the amount is ascertainable from a confessed judgment or a contract that specifies the amount due. The default judgment had spawned significant coverage litigation by and against the defendant’s insurer.

We obtained summary judgment in favor of our client on the plaintiff’s general contractor’s contractual indemnity and defense claims. The general contractor claimed it was owed defense and indemnity under its subcontract with our client. In a prior proceeding, the court entered judgment in favor of the owner against the general contractor for breach of contract and breach of warranty but rejected the owner’s claims of negligence and violation of the Florida Building Code. The court agreed with our arguments that the general contractor was estopped from bringing its contractual defense and indemnity claims against the subcontractor because there was a prior judicial determination that neither the general contractor nor our client was negligent, and the general contractor’s liability was based on its breach of contract and warranties. The court further agreed that the general contractor could not show that the subcontractor was negligent, where it had taken the position that there was no negligence in the construction and it did not present any affirmative evidence to support a claim of negligence on the part of the subcontractor.   

We won summary judgment before the Honorable Anthony Verwey in Chester County, PA. The plaintiff filed suit for breach of contract and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (PAUTPCPL) against the defendants over the installation of an allegedly defective storm water remediation system. Summary judgment was sought on the grounds that the plaintiff could not prove damages without an expert. The court entered judgment in favor of the defendants, finding the plaintiff’s breach of contract claim could not proceed without expert support and the PAUTPCPL claims failed for lack of demonstrated damages.

We obtained a defense verdict after a bench trial in the Philadelphia Court of Common Pleas, which found the plaintiff did not meet the definition of an insured entitled to underinsured motorist (UIM) coverage. The case arose out of a motor vehicle accident in which the plaintiff was a back seat passenger in a vehicle that was struck by the tortfeasor. After settling his bodily injury claim with the tortfeasor and with the underlying UIM carrier that insured the vehicle he was a passenger in, the plaintiff submitted a UIM claim seeking UIM benefits under his alleged sister’s UIM policy with our client. There was no dispute the plaintiff was living with his “sister” at the time of the accident. Therefore, the only issue was whether the plaintiff could show he was an insured and entitled to coverage by proving he was related to his “sister” by blood, adoption or marriage to meet the definition of a “family member” under the policy. She testified during discovery and at trial that she is not related to the plaintiff by blood, adoption or marriage. As a result of this testimony, the judge found the plaintiff failed to meet his burden of proof and entered a defense verdict for our client. 

We prevailed in the U.S. Court of Appeals for the Third Circuit in a precedential decision upholding application of a household vehicle exclusion. A fifteen-year-old was seriously injured while riding an uninsured dirt bike on private property. After recovering the bodily injury limit of the tortfeasor’s policy, he also recovered UIM benefits under the two household policies. However, the other household policy underwritten by the same carrier contained a household vehicle exclusion, which excluded UIM benefits under the facts of the accident, so coverage was denied. The carrier then filed a declaratory judgment action in the Eastern District Court of Pennsylvania, but lost because the District Court concluded that the household vehicle exclusion acted as an impermissible de facto waiver of stacking as a result of the carrier paying UIM benefits under the other household policy. On appeal, a unanimous panel of the Third Circuit vacated the District Court’s Order, holding in a precedential opinion that the household vehicle exclusion was valid and enforceable because the dirt bike involved in the underlying accident was uninsured.   

We obtained an order granting our motion to dismiss for failure to allege facts supporting a bad faith claim pursuant to Pennsylvania and federal case law. The case arose out of an uninsured motorist (UM) claim from a motor vehicle accident involving the plaintiff and a phantom vehicle. As a result of the accident, the plaintiff averred that he sustained various injuries, including to his head, neck, back, both knees and left shoulder. The plaintiff asserted an uninsured motorist benefit claim under his insurer’s policy, with $50,000 in UM benefits and with no stacking. In the complaint, the plaintiff asserted claims for breach of contract and bad faith. After we filed a motion to dismiss the bad faith count for failing to allege facts specific to support such a claim, the court agreed and dismissed the bad faith count with prejudice. Shortly after the decision, the plaintiff settled his UM claim for a little over $8,000.

We secured a jury verdict in a breach of contract/statutory bad faith action that arose under a legal malpractice policy issued to a law firm by our insurance company client. The plaintiffs settled a malpractice claim set forth against them without our client’s knowledge or consent. The insurance company then denied coverage for that claim, and the plaintiffs filed suit. Because the case included a bad faith claim, if the plaintiffs prevailed on both counts, the damages could have been seven figures or more. We took the case to trial before Judge Patrick in Philadelphia County. The jury returned a verdict on the breach of contract claim, finding that the plaintiffs failed to establish their damages by a preponderance of the evidence. The judge then dismissed the statutory bad faith claim.

We obtained a hard fought defense verdict in a contentious case involving a total fire loss at a duplex owned by a single mother. The investigation revealed that the named insured did not reside in the home and, instead, rented the two units. The claim denial included application misrepresentations and issues related to the fact that the insured property did not meet the policy’s definition of a “residence premises.” Ultimately, the court decided that the property did meet the “residence premises” definition. We were left to try the case based on material misrepresentations and tasked with convincing the jury that a single mother, who paid her premium and suffered an accidental and total fire loss, should be precluded from recovery. The jury disregarded the sympathetic plaintiff, believed the insured lied during the investigation and applied New Jersey insurance law on material misrepresentations as instructed by the court. The plaintiff had turned down $150K prior to trial.

After the plaintiff was struck as a pedestrian by a motor vehicle, she recovered the bodily injury limits from the driver’s policy and her personal UIM policy. The plaintiff then submitted UIM claims under her daughter’s and granddaughter’s UIM policies. Both insurers denied the claims, citing to the “other insurance” clause in the policies, and claiming the plaintiff was not entitled to stacked coverage under her relatives’ policies as she and her relatives waived stacking under each of their respective policies. After the plaintiff responded to our motion for summary judgment, the court held argument on the motion. The court granted our motion, dismissing all claims against the insurer, including for breach of contract, bad faith and unjust enrichment. In granting the motion, the court adopted our arguments that: (1) the plaintiff and her relatives knowingly waived inter-policy stacking; (2) the “other insurance” clause applies to bar the plaintiff’s claims; and (3) the “other insurance” clause does not violate public policy or the Pennsylvania Motor Vehicle Financial Responsibility Law.

We obtained dismissal of both bad faith and Unfair Trade Practices and Consumer Protection Law (UTPCPL) claims in a case filed in the Eastern District of Pennsylvania. The case arose from a UIM claim presented after a motor vehicle accident. In an extensive footnote to the order, the court included a fairly comprehensive overview of the standards for pleading viable bad faith in UTPCPL claims in Pennsylvania. The court did not allow the plaintiff the opportunity to amend his complaint in order to cure the pleading defects.

We successfully appealed a summary judgment in favor of an insurance client that had been sued by another insurance carrier for more than $1.6 million in damages arising out of a fire loss to an insured auto repair facility. The opposing insurance company had paid $1.6 million in damages and intended to pursue a product liability claim against a vehicle manufacturer, alleging a defectively manufactured vehicle had caused the fire. Our client insured the vehicle that was allegedly defective. After the insurance companies conducted a preliminary expert evaluation, the vehicle was destroyed by a salvage yard in the normal course of business. A claim was made against our client for promissory estoppel where it was alleged the vehicle was destroyed despite a promise to preserve. The Pennsylvania Superior Court affirmed the Court of Common Pleas of Erie County’s rejection of the claims against our client and agreed with our contention that the promissory estoppel claim was a disguised claim for negligent spoliation, which the Supreme Court of Pennsylvania does not recognize. 

We prevailed on a motion for summary judgment with respect to the applicability of a UIM “step down” clause. Following an accident with an underinsured tortfeasor, the underlying plaintiff sought UIM recovery under three policies, including one issued by our client with limits of $500,000. The defense successfully argued that our client’s UIM limits of $500,000 “stepped down” to the $100,000 UIM limits of the plaintiff’s own policy, pursuant to our client’s policy language. The Superior Court of New Jersey, Morris County, granted our motion. 

We successfully defended an appeal of summary judgment granted in favor of our insurance company client in the Kentucky Court of Appeals. The court agreed our client was entitled to challenge liability for the plaintiff’s claim and defend its insured, despite the requirements of the Kentucky Unfair Claims Settlement Practices Act.

We won summary judgment in the U.S.D.C. for the Middle District of Florida in a first-party coverage case challenging the prompt notice of an insurance claim. The plaintiff alleged extensive damage to the insured premises, including the alleged need to tear out and access the cast iron plumbing for its full replacement following a toilet overflow at the property. The plaintiff failed to report the loss for 20 months following the alleged date of loss. In a written motion, Carolin and Danielle argued that the plaintiff cannot rebut the presumption of prejudice because, at the time the insurance carrier investigated the loss, there was no actual damage to the property. The court agreed and granted summary judgment in favor of our client.

We prevailed in a jury trial on a UM claim in Hillsborough County’s 13th Judicial Circuit. The plaintiff claimed he suffered permanent and debilitating injuries in a rear-end collision in Tampa, Florida. Liability was admitted, but the extent of the plaintiff’s injuries was in dispute. The plaintiff asked the jury to award him $500,000 for past and future damages.  The jury found there was no permanent injury and awarded $25,000 for past medical expenses only.

We obtained summary judgment for an insurance carrier client that had been sued by another insurance carrier for more than $1.6M in damages arising out of a fire loss. The opposing insurance company had paid $1.6M in damages and intended to pursue a product liability claim against a vehicle manufacturer, alleging that a defectively manufactured vehicle had caused the fire to an auto repair facility. Our client insured the vehicle that was allegedly defective. After the insurance companies conducted a preliminary expert evaluation, the vehicle was destroyed by a salvage yard in the normal course of business. A claim was made against our client for promissory estoppel where it was alleged that the vehicle was destroyed despite a promise to preserve. The Court of Common Pleas of Erie County rejected the claims against our client and agreed with our defense that the promissory estoppel claim was a disguised claim for negligent spoliation, which the Supreme Court of Pennsylvania does not recognize. Moreover, assuming such a cause of action could withstand summary judgment, the damages claimed were speculative in that without the vehicle it could never be proven that a manufacturing defect within the vehicle had caused the fire. Although the $1.6M damages were established, whether the insurance company could prove causation of damages was speculative and the promissory estoppel claim could not survive summary judgment.

In a case where we represented an insurance broker, a Federal District Judge from the Southern District of West Virginia granted our motion to dismiss and dismissed the suit in its entirety. The plaintiff was a women’s fashion and accessory boutique. The suit arose from a dispute over the plaintiff’s insurance coverage for damages it sustained while being ordered to close by West Virginia’s COVID-19-related orders. The insurance carrier filed a motion to dismiss, and, thereafter, the plaintiff voluntarily dismissed the carrier. The broker filed a motion to dismiss all of the claims plead against it, including bad faith, West Virginia’s Unfair Trade Practices Act, estoppel and breach of fiduciary duty. The court dismissed the counts of bad faith and Unfair Trade Practices Act, finding that the plaintiff failed to provide sufficient allegations to support such claims. The court further explained that the plaintiff alleged very few facts specific to the broker and that the allegations plead did not support any unreasonable conduct by the broker, which is required to establish bad faith or deception. For similar reasons, the court held that the plaintiff’s estoppel claim failed. The plaintiff alleged the broker advised that they would have coverage as a result of the COVID-19 orders. The court found that the plaintiff failed to allege how it relied on those representations or how that reliance was detrimental. The alleged representations occurred months after the plaintiff accepted the policy and did not appear to have any impact on the plaintiff’s request for payments from its insurance carrier. Finally, the court explained that the plaintiff failed to identify any West Virginia authority to establish a breach of fiduciary duty against the broker. Regardless, the court found that the plaintiff failed to allege that it requested specific coverage before the broker procured the policy.

The declaratory judgment complaint was filed against the landlord that leased three quarries to the insured tenant. The landlord sued its tenant for breach of contract and environmental clean-up costs. The landlord sought coverage as an additional insured to the tenant’s CGL policy. The insurer denied coverage. The court granted our motion for summary judgment in favor of the insurer, agreeing that the counterclaims alleged intentional acts that were not occurrences as defined in the policy, nor did the claims fall within the personal or advertising coverage under the policy. The court further held that, even if coverage were found, it is limited to such damage or injury “caused in whole or in part by the insured’s acts or omissions or the acts or omissions of those acting on the insured’s behalf in the performance of its ongoing operations for the additional insureds.” In light of this clear language in the policy, it follows that coverage was denied because the counterclaims were based solely on the acts or omissions of the landlord, not on the acts or omissions of the tenant or those acting on its behalf. Lastly, the court agreed that there would be no coverage available to the landlord as exclusions apply.

We successfully persuaded the New Jersey Appellate Division to reverse a coverage determination. The original determination had found that the plaintiff was entitled to $500,000 in coverage under her then-boyfriend’s insurance policy, rather than being limited to the $100,000 in her own policy. The Law Division rejected our arguments that the policy did not deem the plaintiff a “covered person” because she was the named insured in her own policy, and rejected the argument that the step-down provision applied. On appeal, the Appellate Division did not agree with us that the Law Division erred in its determination that the plaintiff was a “covered person,” but it did agreed that the step-down provision applied to limit the plaintiff’s recovery to that of her own policy. Cross petitions for review were filed with the New Jersey Supreme Court, which declined to alter the Appellate Division’s decision, resulting in significant savings on the claim for our client.

We successfully persuaded the court to grant summary judgement on behalf of a major insurer on a complex coverage issue. This coverage case concerned two Virginia personal automobile policies in regard to an automobile accident in New Jersey. The son of a divorced couple sought coverage for an accident he was involved in on a major thoroughfare in New Jersey. At the time of the accident, the son was operating a motor vehicle owned by another Virginia resident, and he had the reasonable expectation that he had permission to operate the vehicle. The accident was very serious, and he sought coverage under both of his parents’ policies. As to the mother’s policy, we convinced the court that the son was not an insured under her policy because he was not so designated on the policy’s declaration page, which was a specific condition of the policy pursuant to Virginia law. As to the father’s policy, once again, we convinced the court that the son was not an insured under this policy given the fact that the mother had sole and exclusive custody under the divorce agreement; thus, the son was not a resident relative of the father’s household. Therefore, neither policy provided coverage for the son, and the insurer was totally dismissed from the case.

The defense prevailed on a motion for judgment on the pleadings in a declaratory judgment action seeking liability coverage in a catastrophic injury case. ​The plaintiff was a passenger in a vehicle driven by his wife when she veered off the road and struck a pedestrian, nearly killing him. The pedestrian sued the plaintiff in a separate action, alleging he got out of the vehicle, rolled the pedestrian over, saw he was “mortally wounded,” got back in the vehicle, and fled the scene without rendering aid or calling for help. The pedestrian sued the plaintiff for negligently failing to render aid and assistance. The plaintiff brought his declaratory judgment action seeking a determination that he was entitled to defense and indemnity under the liability coverage afforded by his homeowner’s policy. Mike and Julie argued there was no coverage in the first instance because the the insured’s conduct was not “accidental.” Subject to exclusions, the policy provides liability coverage for any occurrence that causes bodily injury. “Occurrence” is defined in the policy to mean an “accident” that results in bodily injury. In addition, they argued that certain exclusions would bar coverage, including an exclusion for bodily injury arising from the “use” of a motor vehicle and exclusions for expected or intended injury and willful or malicious acts. The court agreed and granted final judgment in favor of our client.

Marshall Dennehey’s appellate attorneys filed an amicus curiae brief on behalf of the Pennsylvania Defense Institute and Pennsylvania Association of Defense Counsel in a case pending in the Pennsylvania Superior Court that involved interpretation of a “regular use” exclusion that commonly appears in underinsured motorist coverage in automobile policies. The Superior Court enforced the exclusion, as PDI and PADC had requested. The plaintiff regularly used a company vehicle for his daily work. But one or two days before the accident, the specific vehicle he had been driving was taken out of service for repairs, and his employer rented a replacement vehicle for the plaintiff’s use. The insurer denied the UIM claim, based on the “regular use” exclusion, because the plaintiff was driving a company vehicle, which was his regular practice. The plaintiff countered that the vehicle he was operating at the time of the accident had not, in fact, been made “regularly” available to him because he only began using it a day or two prior. Relying on its prior decision in Brink v. Erie Ins. Group, 940 A.2d 528 (Pa. Super. 2008), which held that the “regular use” exclusion properly barred coverage for a plaintiff injured in a “fleet vehicle,” even though the plaintiff may have driven a different specific vehicle each day, the Rawl court held that the employer’s temporary rental of a replacement vehicle triggered application of the “regular use” exclusion and barred coverage. “Stated simply,” Rawl explains, “it does not matter whether Mr. Rawl had regular use of a particular vehicle furnished by his employer, but whether he regularly used a vehicle supplied by his employer.” The court, therefore, affirmed the trial court’s award of summary judgment to the carrier.

A water heater leak in a garage caused direct physical damage to the property, and our client paid the plaintiffs $956.95 for damages sustained to the garage, after applying the $1,000 policy deductible. The plaintiffs claimed that the defendant breached the contract of insurance by failing to fully indemnify them for all the property damage caused by the water leak. Specifically, the plaintiffs claimed: (1) the defendant underpaid for the garage by not allowing for “detach and reset of the water heater” in the amount of $600; (2) water from the water heater leak into the garage traveled through the crawlspace of the garage and caused the master bathroom vanity to warp; and (3) there was damage to “one” loose tile located on the toe-kick of the vanity that cannot be matched, requiring the replacement of the entire continuous tile in the home. The plaintiffs claimed total damages in the amount of $52,930.95. We defended the case at trial, arguing that the damages were limited to only the garage. Furthermore, we presented a case to the jury premised upon science, that is, water could not have traveled through the crawlspace of the garage for nine feet and caused damage to the master bathroom vanity, as the plaintiffs claim, without defying the laws of gravity.

We obtained a ruling granting summary judgment in favor of an insurance broker and two Lloyds syndicates in a case pending in the United States District Court for the Northern District of Ohio. ​The case involved a claim arising from a fall from a tree stand at a hunting camp. The plaintiff suffered spinal fractures when he fell out of the tree stand. He obtained judgment against the owner of the hunting outfitter business and then sought to recover under two policies of insurance issued to the business and a hunting club operated by the same individual. There was a stipulated judgment of $2 million, and a supplemental complaint was brought where the only issue was coverage under two $1 million policies. Accepting Marshall Dennehey’s arguments, the court granted summary judgment in favor of all defendants on the grounds that the broker had no obligations under the policies and that the policies were not written to insure commercial hunting activities or the premises where the accident occurred.

We obtained summary judgment in favor of our insurance company client. The plaintiff sought UIM coverage from our client as a resident relative of the client’s named insured. The plaintiff was a named insured on another policy which provided UM/UIM coverage. The court granted our motion for summary judgment based upon an exclusion in the client’s policy that excluded UIM coverage for any family member if that family member is a named insured on another policy providing UM/UIM motorists coverage. The court found this exclusion to be clear and unambiguous and to reasonably inform the plaintiff that he was not entitled to UIM coverage under the policy. The court rejected the plaintiff’s argument that the exclusion was vague, ambiguous and unenforceable.

The parties had filed cross-motions for summary judgment. The issue for the court was whether the carrier had breached the terms of the policy when it denied the plaintiff’s first-party benefits claim relating to medical bills for PTSD allegedly caused by the underlying accident. The policy defined “bodily injury” as “accidental bodily harm to a person, and that person’s resulting illness, disease or death.” The plaintiff argued that, because she had sustained both physical and mental injuries as a result of the accident, the treatment related to both types of injuries and should be covered. The defense argued that, per the policy and controlling case law, mental injuries are only covered if they “result from” the physical injury. Because the PTSD stemmed from the plaintiff’s fear of driving following the accident—as opposed to mental injuries that resulted directly from the physical injuries—the defense asserted that they are not covered. The court agreed with the defense and found that the language of the policy was clear and unambiguous. It found that the Superior Court’s holding in Zerr v. Erie Ins. Exchange controlled and that the plaintiff had failed to provide evidence that her mental injuries resulted from her bodily injuries. Absent that connection, there was no coverage for the PTSD, regardless of any collateral physical injuries sustained in the accident.