Fight Hunger, Help Others in the COVID-19 Pandemic – Participate in the Legal Feeding Frenzy and Support Your Local Food Bank!

Michele Livingstone

Will Quick

By Michele Livingstone and Will Quick

We are in unprecedented times with COVID-19 (Coronavirus).  It is now more important than ever that we help our neighbors and those who are not as fortunate. I am confident that each of you is doing your part.

Even in the best of times, however, over 1.5 Million North Carolinians struggle with hunger—of those, nearly half a million are children. With public schools and many religious and nonprofit organizations that traditionally serve the food insecure in our communities being closed for indefinite periods, and government leaders calling for social distancing to help limit the spread of Coronavirus, that need is never more pressing than now.

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N.C. Supreme Court Gives Green Light for Insurers to Depreciate Labor Costs

By Susan Boyles

Accardi v. Hartford Underwriters Ins. Co., ___ N.C. __ , No. 42A19 (Feb. 28, 2020)

The North Carolina Supreme Court nixed a putative class-action lawsuit against a property insurer and validated the insurer’s untested practice of depreciating labor costs under actual cash value (“ACV”) policies. A unanimous Court held that an insurance policy provision allowing a deduction for depreciation of labor costs for roof repairs applied to all repairs to the dwelling. Although the amount at issue for the individual plaintiff was only $169.30, the decision has far-reaching implications for the adjustment of first-party property damage claims.

Accardi v. Hartford Underwriting Insurance Company arose out of a hailstorm claim in which plaintiff-homeowner Thomas Accardi sustained damage to his roof, siding and garage. Accardi had a homeowner’s policy with Hartford that required Hartford to pay plaintiff the ACV of the damaged property until repairs were completed. If the property were repaired and the repairs cost more than the ACV, then Hartford was required to reimburse Plaintiff for the full amount of the repair costs, minus the deductible.

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Insurance and More (2020 Insurance Law Section Annual Meeting and CLE)

Dear Section Members!

I hope you all had a wonderful holiday season and a happy start to the New Year!

On Thursday, January 30, 2020, the NCBA Insurance Law Section will host its seventh annual CLE at the North Carolina Bar Center in Cary, North Carolina.  This year’s CLE covers a number of insurance-related topics including the Restatement of the Law of Liability Insurance, Top Insurance Law Decisions from 2019, E-Discovery in 2020, Cyber Insurance, and more.

This year’s CLE has been approved for 1.0 hour of Ethics/Professional Responsibility Credit AND also satisfies the NC State Bar Technology Training requirement.

As always, the Section will hold its annual meeting during the lunch break.

For more information and to register, click here.  On behalf of the entire NCBA Insurance Law Section, we hope to see you there!

Sincerely,

NCBA Insurance Law Section, CLE Committee

Choice of Law in Coverage Disputes

By Alan M. Ruley

Choice of law is often an important issue in insurance coverage disputes.  Both policy holders and insurers will argue for application of the law of a State that they deem most favorable to their position.  Judge Gale of the Business Court recently had an opportunity to consider that issue in American Realty Advisors, et al. v. Lexington Insurance Company, et al., No. 18CVS5171, Wake County.

The Plaintiff in American Realty Advisors owned property in Cary, North Carolina.  Four insurers, including Lexington, provided coverage for the property.

Construction of the property was completed in early 2007, and the plaintiff purchased the property shortly before construction was complete.  Upon purchase of the property in 2007, it was covered by a 2006-2007 “All Risk” commercial property insurance policy from Lexington, as well as substantially similar follow-form excess policies, combining for a total of $25 million in coverage.  The 2006-2007 policies – – which were the policies at issue in the case – – did not include a mandatory choice of law provision.  The policies for the following years did include a mandatory choice of law provision, providing for the application of California law.

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A Case to Keep Your Eye On – $29,000,000 Chapter 75 Judgment

By Dan Morton

There is a case making its way through Onslow County Superior Court that you may want to keep an eye on. In Ortez and the Estate of Estes v. Penn National Security Insurance Company (Penn National) a trial court recently awarded judgment against Penn National for treble damages of $28,949,424.80, for breach of its duty to defend and breach of its duty to settle a claim against its insured driver. A Rule 59 motion for reconsideration is pending. This case could generate caselaw on several important coverage issues.

Penn National insured Kitchen and Lighting Designs Inc. under a commercial auto policy, with liability and UM/UIM limits of $1,000,000. Kitchen and Lighting’s employee (Ortez) was driving an Isuzu box truck that was a covered auto and was involved in a two-vehicle accident in which Ortez’ passenger/co-employee (Estes) was fatally injured. The Estes Estate sued Ortez, Fissaha (the driver of the other vehicle) and Passport (Fissaha’s employer) in Craven County (The Underlying Action). Fissaha and Passport settled the claims against them for $863,000. Relying on exclusions for injury to an employee of the insured or to a co-employee of the insured, Penn National denied coverage and refused to provide a defense to Ortez. In response to the coverage denial, the Estes Estate asserted an uninsured motorist claim under the Penn National policy.

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Proposed Pattern Jury Instructions Submitted

The Insurance Law Section Council previously prepared and approved last spring four proposed Pattern Jury Instructions relating to insurance litigation.  Those proposed instructions, which may be seen on the Section website, cover the following topics:

  1. First-party bad faith;
  2. Expected or intended injury exclusion in CGL policy;
  3. Expected or intended injury exclusion in homeowners’ policy; and
  4. UM/UIM resident of household.

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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 Bar Center in Cary on January 31, 2019.  The theme of this year’s CLE was “Back to the Basics” and included a great selection of speakers covering topics such as CGL Insurance and the Duty to Defend, Excess and Umbrella Insurance, Directors & Officers Insurance, and the Top 10 Insurance Decisions from 2018.  This year’s CLE finished with a segment discussing a hypothetical insurance coverage dispute.

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NC Supreme Court: Hairston v. Harward

By Dan Morton

Hairston v. Harward, N.C. Supreme Court, No. 416A17 Dec. 7, 2018

In Hairston v. Harward, 821 S.E.2d 384 (N.C. 2018), the Court held that an underinsured motorist was not entitled to a credit against a judgment for payments made by the plaintiff’s underinsured motorists carrier.  The case is interesting on many levels, including its discussion of the collateral source rule, what the reasoning in this opinion portends regarding the current Court’s proclivities in coverage disputes and what was not addressed concerning the “500-pound gorilla in the room.”

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COA Penalizes Insurer for Poor Writing in Policy Exclusion

By Susan H. Boyles

Bad grammar can lead to an adverse coverage decision – that’s the lesson one insurer (and its insured) learned the hard way when the NC Court of Appeals held that an incomplete sentence and improper grammar in an insurance policy that purported to exclude coverage for claims involving sovereign immunity was ambiguous. The Court’s decision paves the way for the Plaintiff to proceed with her slip-and-fall case, even though Supreme Court had previously ruled that the Defendant was entitled to assert sovereign immunity.

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Back to the Basics: 2019 Insurance Law Section Annual Meeting and CLE

The Insurance Law Section’s 2019 CLE is premised on a “back to basics” concept to assist attorneys and insurance adjusters both new to and well-versed in insurance law.

Back to Basics: Insurance Law Section Annual Meeting and CLE
Live and Webcast
Thursday, Jan. 31, 2019
NC Bar Center, Cary
CLE Credit: 6.5 hours, includes 1.0 Hour Ethics/Professional Responsibility
6.0 Hours of General Continuing Education Credit for Insurance Professionals (Live program only). Must attend the entire program to receive this credit.
Planned by  the NCBA Insurance Law Section

Insurance law encompasses many issues and areas of practice, including whether a policy of insurance potentially provides coverage for a claim and disputes between third parties and individuals or entities listed as named insureds or identified as additional insureds under a policy.

In addition to those matters, learn from exceptional attorneys as they share, explain and provide helpful practice information in the areas of commercial general liability insurance, excess and umbrella insurance, directors and officers insurance, errors and omissions insurance (malpractice insurance), medical health insurance, disability insurance, automobile insurance, and homeowner’s insurance. The program also addresses issues concerning insurance carriers’ duty to defend and provides an excellent role play of an insurance coverage dispute.

This is a fantastic opportunity to learn more about analyzing and handling insurance law matters, and is useful to attorneys from a wide range of practice areas.

Click here to read the complete agenda or here to register for the event.

Hotel Information

TownePlace Suites by Marriott
120 Sage Commons Way | Cary
Nightly Rate: $114 studio queen with sleeper sofa (Sunday-Thursday)
Reservations: 919.678.0005
Ask for the NCBA corporate rate.

Embassy Suites
201 Harrison Oaks Boulevard | Cary
Nightly Rate: $169 single/double
Reservations: 919.677.1840 orwww.tinyurl.com/NCBA-Embassy
Corporate Account Code: 2691626