Summary Judgment Verdict Upheld in New York
Peter E. Kanaris and Jefferson D. Patten recently prevailed in upholding a summary judgment order entered by the United States District Court for the Eastern District of New York.The insured had sought coverage under its property insurance policy following a fire that had damaged two vacant apartment buildings, and commenced a civil suit while Commonwealth Insurance Company of America was in the process of completing its investigation.
Attorneys Kanaris and Patten moved for summary judgment asserting that the insured had failed to produce documents requested for adjustment of the claim, refused to sit for examinations under oath and submitted a fraudulently inflated claim. The Second Circuit Court of Appeals affirmed the lower court’s entry of judgment that, as a matter of law, the insured materially breached the insurance contract by failing to comply with the policy’s cooperation provisions. The Second Circuit found that the insured repeatedly failed to submit to the insurer’s requests for examinations under oath, against the advice of their public adjuster and with the knowledge of later repercussions for its failure to do so, demonstrating a willful failure to comply with its contractual requirements, and under New York law, an insured’s willful failure to appear at an examination under oath constitutes a material breach of the contract and a complete defense to an action on the policy. The Second Circuit further ruled that the District Court had not abused its discretion in refusing the insured’s request to reopen discovery and allow for the untimely disclosure of expert witnesses.
Case Resolved Via Motion to Dismiss
Peter E. Kanaris and Megan E. Ritenour recently prevailed on a motion to dismiss pending in the Circuit Court of Cook County. The insured sought coverage under its first-party property policy with Hartford Casualty Insurance Company for losses incurred to its property following a flood event.
Hartford denied coverage and the insured ultimately filed suit under the Policy seeking recovery for its losses. Kanaris, Stubenvoll & Heiss filed a motion to dismiss the insured’s complaint on the basis that the contractual suit limitation period in the policy barred the insured’s claim. The Court rejected the insured’s tolling and estoppel argument and agreed with our assertion that the insured was precluded from filing suit against Hartford for damages arising from the Loss. As a result, the Court dismissed all claims against Hartford with prejudice.
Eighth Circuit Affirms Summary Judgment
The Eighth Circuit Court of Appeals affirmed the United States District Court for the Eastern District of Missouri’s order granting summary judgment in favor of Kanaris, Stubenvoll & Heiss, P.C.’s client, Hartford Fire Insurance Company. After Hartford determined that the insured’s subcontractors’ defective, deficient and flawed workmanship caused the claimed damage to the roof of a building during construction, the insured filed suit seeking coverage under the policy and extra-contractual damages.
Peter E. Kanaris and Cheryl L. Mondi moved for summary judgment asserting that the insured’s claim was excluded by the faulty workmanship exclusion and that there can be no liability for extra-contractual damages where the policy specifically excludes the insured’s claim. The Eighth Circuit agreed with Hartford’s position that the faulty workmanship exclusion barred coverage for the insured’s claim as the subcontractors acted negligently while constructing the building. The Eighth Circuit further ruled that the District Court correctly concluded that the insured’s claim for extra-contractual damages failed because Hartford had no duty to cover the loss.
Summary Judgment for Defense on $14.1 Million Claim
Peter E. Kanaris, Megan E. Ritenour and C. Zachary Ransel recently obtained summary judgment on behalf of Lexington Insurance Company in the United States District Court for Kansas. The policyholders, the owners of the Lyons Salt Mine, sought coverage under eight successive first-party property policies for $14.1 million in costs to prevent water inflow (more than 32,000 gallon per day) and the failure of their mine.
While the water inflow was detected in January 2008, Lexington was not notified until July 2010 of the alleged loss. The policyholders posited that the notice to Lexington was not required until April 2010, when their consultants provided them with absolute knowledge of a covered loss. Plaintiffs also contended that the obligation to provide notice arose when they knew of both (1) the loss, damage, disaster, or casualty, and (2) the specific causal event giving rise to the allegedly covered claim. In rejecting the Plaintiffs’ arguments, the District Court held that the obligation to provide notice happened in January, 2008 with the discovery of the water inflow to the mine. The District Court further concluded that, once the policyholders undertook to sue and labor for which claim was made, Plaintiffs also had the duty to notify Lexington. As a matter of law the District Court found Lexington suffered actual prejudice because its claims department was deprived of the opportunity to inspect, examine or participate in the remedial measures unilaterally taken by the policyholders to prevent the mine failure and stop the water inflow.
Court Rejects Warranty of Habitability Claim
Peter E. Kanaris and David E. Heiss recently prevailed on a motion to dismiss pending before the Law Division of the Circuit Court of Cook County in a construction dispute. Our client provided design services for the construction of a four building residential condominium development in the Chicago area.
The plaintiff, the condominium association, brought an implied warranty of habitability claim against our client based upon a narrow exception permitting such claims against subcontractors in the event of an insolvent general contractor. Our attorneys responded to the complaint with a motion to dismiss and convinced the Court that Illinois law does not uphold implied warranty of habitability claims against design professionals. The Court also agreed with our attorney’s argument that the narrow exception was misplaced since the general contract was solvent. Therefore, the Court dismissed the claim against our client with prejudice.
Kanaris, Stubenvoll & Heiss Prevails Before Fifth Circuit
Firm attorneys including Peter E. Kanaris and Cheryl L. Mondi prevailed before the United States Court of Appeals for the Fifth Circuit in WH Holdings et. al. v. Ace American Ins. Co.,. In a dispute over rights and obligations set forth in a construction contract, the Fifth Circuit agreed with Kanaris, Stubenvoll & Heiss’ argument that the construction contract at issue did not require the building owner to purchase property insurance and remanded the matter for further proceedings.
Summary Judgment Obtained in Coverage Action
Peter E. Kanaris and Jefferson D. Patten recently obtained summary judgment in the matter of Delta Technical Products v. Hartford Casualty Insurance Company pending the Chancery Court of Cook County. Here, the insured sought coverage stemming from a 2008 rainstorm which resulted in 18” of rain over a 24 hour period.
The Court agreed with our argument that the loss at issue was unambiguously barred from coverage by virtue of the water exclusion. The court also entered summary judgment in favor of our client on the policyholder’s bad faith claim as it agreed with our position that a bona fide coverage dispute bars any bad faith claim under Illinois law.
Claims Dismissed Against Architectural Firm
Peter E. Kanaris and David E. Heiss were recently successful in obtaining a dismissal of all claims pending against an architectural firm. Our client provided design services for the construction of an eight-story residential condominium building in the Chicago area. Plaintiffs, the condominium board, sought to bring an implied warranty of habitability claim against our client based upon an expansion of a narrow exception permitting the assertion of such a claim against subcontractors in the event of an insolvent general contractor.
Our attorneys convinced the Court that Illinois law did not contemplate the assertion of implied warranty of habitability claims against an architect regardless of whether the general contractor was in fact insolvent. As a result, the Court dismissed all claims against our client with prejudice.
$225 Million Claim Resolved
Kanaris, Stubenvoll & Heiss, P.C. attorneys Peter E. Kanaris, Eric D. Stubenvoll and David E. Heiss helped effectuate a commercial resolution of a $225 million insurance claim in which the parties entered settlement negotiations with quantum differences exceeding $120 million. The Policyholder, a Fortune 500 company, filed suit against all insurers on its insurance program for alleged losses stemming from a flood in Central Indiana.
Our attorneys, who represented the entire insurance market in this dispute, were able to broker a resolution of all pending claims despite the existence of complex coverage and quantum issues which presented numerous questions of first impression under Indiana law.
David Heiss Speaks to Loss Executives Association
Kanaris, Stubenvoll & Heiss Shareholder David E. Heiss spoke to members of the Loss Executives Association at its annual meeting in Newport, Rhode Island. Mr. Heiss spoke and participated in a panel that addressed prevalent bad faith concerns in complex first-party property commercial losses.
Summary Judgment Obtained in California
Peter E. Kanaris, Cheryl L. Mondi and Megan E. Ritenour obtained summary judgment in favor of Lexington Insurance Company in the Eastern District of California in Energy 2001 v. Lexington Insurance Company, et al, 10 CV 00415. Although Energy 2001 was not named as an insured or additional insured under the Lexington policy, Energy 2001 sought coverage for damage arising out of a transformer failure on August 8, 2008.
Judge Mendez agreed with Kanaris, Stubenvoll & Heiss, P.C.’s coverage position that Energy 2001 lacked standing to assert breach of contract and breach of implied covenant of good faith and fair dealing claims under the Lexington policy because it was not an insured. While Energy 2001 relied upon an agreement between Energy 2001 and a third-party, The Shaw Group, which required The Shaw Group to procure certain insurance coverage, the Court agreed with Lexington and held that Lexington was not bound to any agreements made by Energy 2001 and a third-party. The Court also agreed with Lexington and held that Energy 2001’s reliance upon an Evidence of Commercial Property Coverage Form to confer status as an additional insured under the Lexington Policy failed because a certificate of insurance is not a contract between the insurer and the certificate holder and does not operate to alter the terms of an insurance policy.
Judgment Affirmed in 8th Circuit
The 8th Circuit Court of Appeals affirmed an order granting summary judgment in favor of Kanaris, Stubenvoll & Heiss, P.C.’s client Valley Forge Insurance Company in Riggs v. Valley Forge Ins. Co. 09 C 3768, Plaintiffs, a western apparel retailer located in Arkansas, sought damages in excess of $1,500,000 under contractual and extra-contractual theories of relief related to a fire at its business location. The Western District of Arkansas granted the motion for summary judgment filed by Firm attorneys Peter E. Kanaris and David E. Heiss.
On appeal, the 8th Circuit ruled that Valley Forge had presented sufficient evidence to establish Plaintiffs made material misrepresentations concerning the scope and quantum of its claim under the policy at issue thereby voiding the policy and barring all contractual and bad faith claims.
Limitation of Liability Clause Enforced
Peter E. Kanaris and Jefferson D. Patten recently obtained partial summary judgment in the United States District Court for the Eastern District of Louisiana on behalf of Continental Casualty Company. Plaintiff, a governmental entity, submitted a claim under a first party property policy of insurance for damages to 61 government locations incurred as a result of Hurricane Katrina. Plaintiff’s suit alleged damages in excess of $14 million above the Policy’s per location limit of liability.
The Court agreed with the insurers’ coverage position and entered judgment as a matter of law in favor of Continental Casualty Company. The ruling decreased Plaintiff’s claim by $14 million.
Defense Verdict in Northern District of Illinois
Kanaris, Stubenvoll & Heiss, P.C. trial lawyers Peter E. Kanaris and David E. Heiss obtained a defense verdict in Johnathan Pepper Co., Inc. et. al. v. Hartford Casualty Ins., 05 C 1404, United States District Court for the Northern District of Illinois. Plaintiffs alleged that a fire damaged its business personal property and at trial sought damage recovery under its first-party property insurance policy and for Hartford’s alleged bad faith.
Hartford denied the claim and contended that Plaintiffs’ intentionally set the fire. After a bench trial, the Court found that Plaintiffs did set the fire in question and entered judgment in favor of Hartford on all coverage claims. The Court further awarded Hartford damages totaling $596,651.94 under the Illinois insurance fraud statute, i.e., 720 ILCS 5/46-5, exclusive of its reasonable attorneys fees.
Summary Judgment Obtained in Florida
Peter E. Kanaris recently obtained summary judgment in PMG Collins, LLC v. Allianz Global Risks et. al.,United States District Court for the Southern District of Miami on behalf of Allianz Global Risks US Insurance Company and Great Lakes Reinsurance. Plaintiff, the owner/developer of a multi-million dollar high-rise condominium building under construction in Miami, submited a claim for water damage to the property which occurred near the completion of the project.
Plaintiff filed suit over the insurers’ contention that a 5% of total project values deductible applied to water damage. The Court agreed with the insurers’ coverage position and entered judgment as a matter of law in favor of the insurers. Since Plaintiff’s loss failed to exceed the deductible, its claim was dismissed in its entirety.