The Road to Insurance Recovery

Lathrop Gage Partners Bill Beck and Mike Abrams were recently profiled by Super Lawyers for their success in securing compensation for individuals who have been wrongfully convicted, individuals who have often spent decades in prison for crimes they did not commit. Lathrop Gage’s Civil Rights Insurance Recovery Practice group leads the nation in securing insurance proceeds for wrongfully convicted persons, recovering over $150 million for wrongfully convicted individuals and their families since 2004. Additionally, the firm has partnered with the Midwest Innocence ...

Interviewed by Alana McMullin and David Scheidemantle of Lathrop Gage’s Insurance Recovery & Counseling Group.

In a recent decision, the United States Court of Appeals for the Sixth Circuit considered whether a “criminal acts” exclusion in a first-party commercial insurance policy barred coverage for damage to leased property caused by the insured’s tenant in the operation of a marijuana cultivation business.  K.V.G. Properties, Inc. v. Westfield Insurance Co., 2018 U.S. App. LEXIS 232296, 2018 FED App. 0178P, 2018 WL 3978211 (6^th Cir. Aug. 21, 2018).  Marijuana remains illegal as a Schedule 1 drug under federal law but is protected in certain circumstances under the law of Michigan, where the insured property was located.  Fatal to the insured’s case, it had pleaded in an eviction proceeding that the tenant’s activities were illegal, which the Sixth Circuit took as an admission that the tenant’s conduct was illegal under Michigan as well as federal law, landing the claim within the confines of the criminal acts exclusion.  While paying lip service to black letter law that the insurer bears the burden of establishing the applicability of an exclusion, the court nevertheless ruled against the insured because it had provided no evidence that the tenant had complied with Michigan’s marijuana laws.  The court left open whether the exclusion still would have applied had the insured made such a showing (and hinted the outcome might have been different had the insured done so).

The CDC estimates that 1 in 6 Americans get sick from contaminated foods or beverage each year, and that 3,000 people die, resulting in total food-borne illness costs of more than $15.6 billion dollars each year. Those numbers are not surprising when food recalls seem to be an almost weekly occurrence, with salmonella-tainted foods prominently featured in multiple large-scale outbreaks in 2018. Although food contamination seems to be on the rise, experts suggest that frequency is up – not due to an actual increase in outbreaks – but, instead because we are better equipped to ...

Hurricane Florence has caused devastation throughout the Carolinas, including as-yet-unknown property damage, business interruption, environmental contamination, and most tragically, loss of life.

When a disaster like Florence occurs, corporate policyholders enter crisis mode, doing everything they can to make sure business losses are mitigated to the extent possible, providing workarounds for customers, and generally making every effort to salvage what they can and assess the losses incurred.  What might not be on any policyholder’s radar screen, however, are the steps that can be taken now to maximize insurance coverage and recovery once the immediate crisis is over.

Remember those spam emails from Nigerian royal family members needing to transfer millions of dollars out of Nigeria, requesting the recipients provide banking and personal information to “hold” the funds or otherwise front money to the fraudster to pay taxes and fees?  While most people have (hopefully) wised up to that scheme, a more insidious and devastating fraud has taken hold in the corporate world – the “social engineering” scheme.

“Social engineering” schemes are shades of the Nigerian letter scams, except the fraudster pretends to be someone affiliated ...

Excess insurance plays a vital role in mitigating the risk of large losses, but excess insurers often contend they have no obligations and are entitled to sit on the sidelines of a lawsuit against their policyholder until underlying insurers have fully paid their limits.  This position harms policyholders, particularly when settlement of a lawsuit requires contribution from these excess insurers.

While courts universally acknowledge the value of pre-trial resolution and settlement, some jurisdictions have discouraged settlement of large losses by holding that excess ...

In late 2017, in a move favoring policyholders, the Missouri Court of Appeals for the Eastern District applied the “all-sums” approach to allocating and exhausting insurance coverage for a continuous asbestos harm in Nooter Corp. v. Allianz Underwriters Ins. Co., 536 S.W.3d 251 (Mo. App. 2017). Although Nooter has sparked significant chatter in the insurance world, Lathrop Gage is dedicated to educating its clients on what Nooter means to you.

In Nooter, plaintiff Nooter Corporation was in the business of designing, installing, and distributing pressure vessels for ...

In 2017, the Missouri Supreme Court handed down its Doe Run decision, where it interpreted, as a matter of first impression, an insurance policy’s so-called “absolute pollution exclusion,” holding that it barred coverage for environmental-degradation claims arising from the release of toxic industrial byproducts. We believe this policyholder-adverse decision is limited by its facts and reasoning, and thus policyholders can still invoke the earlier and more favorable Hocker Oil and Wyatt decisions when seeking insurance coverage in other contexts.

UPDATE on May 23, 2018: Yesterday, ALI voted to approve these rules and many more contained in a 488-page document containing guidelines intended to aid courts in resolving coverage complex disputes. It remains to be seen how and whether courts across the country actually follow these guidelines. Lathrop Gage will be following the effect of this project on the law over the next several years and will keep you updated.

The American Law Institute (ALI) is voting tomorrow on new guidelines that may affect the complex rules adopted and applied by courts in insurance coverage disputes.  Here ...

The attorney-client privilege is one of the oldest and most widely-known—if generally misunderstood—common law doctrines. In its broadest outline, it’s a rule that’s fairly easy to grasp and apply: a communication between a lawyer and a client for a legal purpose that is held in confidence is protected from disclosure by privilege. The rule ensures that clients can be candid with their lawyers without fear that their candor is discoverable (and ultimately harmful to their case).  But don’t miss the important caveat: the communication must be held in confidence, meaning when there’s another, non-client party in on the conversation, there is no privilege.

This presents an obvious but often missed dilemma, as modern litigation often involves four critical parties sharing communications: the person or entity being sued, their attorney, their liability insurer(s), and their broker. This situation is so ubiquitous that it may be easy to forget that under the traditional rule, when you share information with your insurer or your broker, you’re breaking privilege.