Insurance Law Section Annual Meeting and CLE Wrap-Up

By Daniel Knight

In case you missed it, the Insurance Law Section of the North Carolina Bar Association held its annual meeting and CLE at the NC Bar Center in Cary on January 31, 2018.  This year’s CLE offered a great selection of speakers presenting on a variety of practical topics, including useful tools in litigating coverage matters, such as E-discovery, use of experts, and tips for deposing insurance adjusters, the Section’s annual insurance case law update, understanding professional liability insurance, and managing stress through the use of mindfulness.  Video Replays of the CLE will be on March 27, 2018 in Cary and April 12, 2018 in Winston-Salem.  Click here to register for one of the live replays.

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Token Offers By UIM Insurer Do Not Constitute Unfair Claims Settlement Practice

By Bill Lipscomb

In Elliott v. Am. States Ins. Co. 2018 U.S. App. LEXIS 3952 (4th Cir. 2/20/2018), the 4th Circuit held that a UIM insurer, in a claim where the tortfeasor’s liability coverage had already been paid, did not violate paragraphs (f), (g) and (h) of N.C.G.S. § 58-63-15 (11) by declining to make an offer until after its insured filed a lawsuit against the tortfeasor and then making only “token offers” before the arbitration hearing (which resulted in an arbitration award close to the UIM limit), because the UIM carrier’s liability is derivative of the tortfeasor’s liability and is not determined until the tortfeasor’s liability for damages has been determined.

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Trade Creditor Had No Right to Bring Deceptive Trade Practice Claim Against Liability Insurer of Tortfeasor/Insured

By James W. Bryan

On February 20, 2018, the North Carolina Court of Appeals upheld a ruling of the North Carolina Business Court that provides further clarification on whether a claimant with a judgment against the insured may sue the insurer for deceptive trade practices.  USA Trouser, S.A. de C.V. v. Williams, 2018 WL 943639 (N.C.App. 2018).  In this case, Navigators Insurance Co. issued a directors and officers liability insurance policy to the insured International Legwear Group, Inc. (“ILG”).  Plaintiff USA Trouser S.A. de C.V. (“USAT”), a trade creditor of the insured, sold socks on credit to the insured.  In federal court in Charlotte, USAT sued ILG and three of its directors/officers for failing to disclose ILG’s worsening financial condition while continuing to obtain products from USAT upon credit.  USAT obtained a default judgment for $2.0 mil.   USA Trouser later filed the instant action in state court against Navigators asserting claims for, among other things, bad faith claims settlement practices and unfair trade practices pursuant to N.C. Gen. Stat. § 75-1.1.  Navigators moved to dismiss.  In opposing the motion, USAT argued it became a third-party beneficiary to the insurance policy upon entry of the default judgment and obtained the right to payment on the judgment and to sue the insurer directly for its failure to pay.  Business Court Judge Gale granted the motion to dismiss and USAT appealed.

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Insurance Law Section Members Author New Insurance Litigation Guide

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.

Click here for more details.