Cherry Hill, NJ
Insurance Lawyer at Cherry Hill, NJ
Practice Areas: Insurance, Litigation
OUTCOME: Defense verdict
A Nassau County, New York judge affirmed an insurer's disclaimer of coverage premised on a landlord's failure to timely notify her carrier of an accident occurring at her apartment complex.
OUTCOME: Affirmed summary judgment for insurer
In a significant win for liability insurers in New Jersey, a panel of the Third Circuit Court of Appeals ruled that there is no coverage for faulty workmanship claims against a general contractor even ... when the work was performed by subcontractors. The decision affirmed a trial court ruling that there is no “occurrence” under a general liability policy where the only damage was to the construction project itself. With this opinion, the Third Circuit has aligned itself with other courts nationwide that have endorsed insurers’ rights to deny coverage for construction-defect claims so long as there is no third-party property damage.
OUTCOME: Reversal on appeal in favor of UIM insurer
In a victory for the insurance industry, a New Jersey appeals court held on November 25, 2009 that a commercial auto insurer sued for payment of Under-Insured Motorist (UIM) benefits by an employee of ... the insured business was entitled to a dismissal because the auto policy’s UIM limit “stepped down” to the amount of the driver’s spouse’s policy. The decision in Ruoff v. American Asphalt was especially significant because the insurer first had to overcome the trial court’s procedural holding that the company untimely contested whether the “step-down” clause was to be applied retroactively. The panel’s decision saves the insurer in excess of $900,000. As a result of a 2005 motor vehicle accident in which he was injured, plaintiff Geremy Ruoff asserted a claim for UIM benefits with Penn National, his employer’s business auto insurer. Under the applicable provision in the employer’s policy, the available limits for UIM coverage for Ruoff “step down” to the UM/UIM limit of his wife’s auto insurance policy with Hanover Insurance Company, which is $100,000. Ruoff disagreed with the insurer’s position and filed a lawsuit seeking, among other relief, an order that the insurer’s position was incorrect and that the applicable UM/UIM limit is $1 million. Although Penn National originally was dismissed from the action by the trial court in 2007, in February 2008 the trial court reinstated the action. The trial court did so because of then-recently-enacted legislation that prohibited insurers from enforcing step-down provisions against a UM/UIM claimant who is an employee of the insured company. The new law was deemed by the trial court to apply retroactively to this case. The court brought Penn National back into the case with the knowledge that the retroactivity issue was under review in a similar case pending before the Appellate Division. Significantly, the trial court’s orders in February and April 2008, reinstating the complaint against Penn National and finding that the law applied retroactively, respectively, did not dispose of all issues as to all parties. In July 2008, during the pendency of the case, the Appellate Division ruled that any UM/UIM claim predicated upon an accident that predates the adoption of N.J.S.A. 17:28-1.1(f) - which prohibited the use of step-down clauses - is not applied retroactively and must be governed by the legal principles previously articulated by the New Jersey Supreme Court. Because the accident at issue in this litigation preceded the change in the law, Penn National’s position on the step-down issue was validated by the 2008 Appellate Division decision. In light of that decision, Penn National filed a motion with the trial court to alter or amend the February and April 2008 Orders seeking a dismissal of Ruoff’s complaint against it. The trial court held that its decision to reinstate the lawsuit against Penn National and to apply the statute retroactively were final orders and, as such, the insurer was out of time to seek relief under R. 4:49-2. In an 11-page opinion, the Appellate Division concluded that the trial court erred in denying Penn National’s motion to alter or amend its prior orders, given that at no time were all issues as to all parties disposed of. Because those orders were interlocutory, the appeals court held, Penn National properly and timely sought relief of the retroactivity issue. The panel further ruled that the statute was not to be applied retroactively and, therefore, Penn National’s UIM limit dropped down from $1 million to $100,000.
OUTCOME: Summary judgment in favor of insurance company
Deciding an issue of first impression in Pennsylvania, a state court judge ruled that a driver of a dealer-owned car who allegedly struck a pedestrian is only entitled to umbrella coverage after the ex ... haustion of a $500,000 gap between the umbrella insurance policy and the reduced limits of the dealer’s underlying garage policy. In the case, Penn National Insurance Company issued garage and umbrella policies to Forrester Lincoln-Mercury of Chambersburg, Pennsylvania. On December 8, 2003, Steve Syverud left his own vehicle at the dealership for service and borrowed a vehicle owned by Forrester. The next day, Syverud was driving the loaner vehicle on Interstate 81 when he allegedly struck a pedestrian walking along the highway. The pedestrian later died of his injuries. The driver was insured under both Penn National policies because he was a customer of the dealership, but in that instance the garage policy’s $500,000 per accident limit “stepped down” to the statutory minimum amount of $15,000. The driver maintained his own personal auto policy with Progressive, which agreed to pay its $15,000 liability limit. Penn National paid the garage policy’s $15,000 limit but disputed that its $5 million umbrella policy similarly dropped down. Penn National contended that its umbrella policy was not reached until payment of $515,000 (the total of the $15,000 Progressive policy limit and the $500,000 stated limit of the Penn National garage policy). The decedent’s estate claimed that the umbrella policy was triggered after payment of $30,000 (the $15,000 Progressive policy and $15,000 reduced limit of the Penn National garage policy). Judge Douglas Herman of the Franklin County (Pa.) Court of Common Pleas ruled in a June 24, 2009 opinion that the umbrella policy was not reached until a settlement or judgment of the accident claim exceeded $515,000. Relying on several federal appellate court decisions outside of the Commonwealth, Judge Herman determined that the trigger of the umbrella policy was dictated by the garage liability limit listed on the umbrella policy’s Schedule of Underlying Limits and was not affected by the step-down clause in the garage policy. To rule otherwise, the judge wrote, would contravene the underwriting intent of the umbrella policy.
OUTCOME: Judgment in insurer's favor upheld on appeal
An insurer was justified in disclaiming coverage for a copyright infringement action where the allegations in the complaint did not allege "advertising injury," according to the New York Appellate Divi ... sion, First Department. The appellate court upheld the trial court's grant of summary judgment to Public Service Mutual Insurance Company. In the underlying action, Quest Beads & Cast alleged that Public Service Mutual Insurance Company's insured, Axelrod & Co., infringed its copyright by manufacturing and selling charms created by Quest. After the complaint was filed, Axelrod sought coverage from PSM, which denied coverage because there was no allegation that the alleged infringement occurred in the course of the insured’s advertising of goods, as required by the general liability insurance policy. Based on PSM’s disclaimer, Quest filed an amended complaint specifically alleging that Axelrod’s advertising, in the form of its product catalog, infringed its copyright. However, Axelrod never sent the amended pleading to PSM for consideration of coverage. Axelrod eventually settled the case, and then sued PSM for coverage. Axelrod sought reimbursement of $325,000 in settlement costs and attorneys fees. The key issue was whether the catalog attached to the complaint, which contained images of the allegedly infringing charms, could lead to the inference that the infringement took place in the course of advertising. The Appellate Division held that the pleading was expressly limited to damage from the manufacture and sale of allegedly infringing works, and agreed with our argument that Quest attached the catalog by way of comparison merely to evidence the infringing manufacture and sale of charms. The court further held that Axelrod’s failure to provide the amended complaint to PSM defeated its argument that the revised pleading triggered coverage.
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