This newsletter summarizes recent court cases related to reinsurance:
1) The Third Circuit ruled that a reinsurer did not need to demonstrate prejudice from late notice of loss given by the reinsured in order to be relieved of indemnity obligations, applying New York law.
2) A New York federal court confirmed multiple arbitration awards in favor of a cedent, rejecting the reinsurer's arguments to vacate the awards.
3) A Wisconsin federal court transferred a dispute over arbitrator selection and consolidation to New York based on forum selection clauses in the reinsurance contracts.
This newsletter provides summaries of recent reinsurance case law and regulatory developments from March 2014. It includes summaries of cases from New York, Tennessee, and California federal courts related to arbitration awards, protected cell reinsurance agreements, preclusion of subsequent arbitrations, and common interest privilege with reinsurers. It also summarizes cases related to tax treatment of retrocessional agreements, dismissal of defenses in a facultative reinsurance dispute, denial of stay in a mortgage reinsurance case, and assumption versus reinsurance.
This newsletter summarizes two recent court cases related to reinsurance:
1) The New York Court of Appeals reversed summary judgment in a case involving allocation of an asbestos settlement between a cedent and reinsurers. The court found issues of fact around the reasonableness of the cedent's allocation assumptions.
2) The Second Circuit held that the question of whether a contract clause provides for arbitration is governed by federal common law when the Federal Arbitration Act applies through the New York Convention. The court affirmed that an insurance contract clause allowing medical examinations to determine disability was an arbitration clause.
This newsletter summarizes recent reinsurance case law developments. The first case discusses an 8th Circuit ruling that an endorsement incorporating a jurisdictional clause superseded an alternative dispute resolution clause. The second case discusses a New Jersey ruling staying litigation in favor of arbitration over an alleged breach involving an offset dispute. The third case discusses an Illinois ruling dismissing an assignee's request for pre-answer security and motion to compel arbitration against a sovereign-owned reinsurer.
This case involves a dispute over insurance proceeds from an automobile accident settlement. Plaintiff Glenn Cody received $25,000 from the insurer of the at-fault driver, but had over $29,500 in medical expenses. Defendant MILA paid $17,632.18 of Plaintiff's medical expenses and asserts an equitable lien over the settlement funds. Plaintiff disputes the validity of MILA's lien. Plaintiff was also insured by Defendant Farm Bureau, which provided $25,000 in UM coverage, but disputes its applicability. The Court must determine the validity of MILA's lien to then address potential liability of Farm Bureau.
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & MootnessPollard PLLC
Lawyers in FLSA cases and particularly on the defense side should view this as a cautionary tale: Tendering a check for the wages at issue does not moot the plaintiff's claim. FLSA claims are live until there is a judgment or a settlement approved by the court. And plaintiffs DO get their fees for litigating over the issue of attorneys' fees.
Simply put: A legitimate FLSA case, a skilled attorney on the plaintiff side, and defense counsel who do not understand the applicable legal framework make for disastrous results.
This presentation discusses settlements of workers\' compensation cases in Florida. The discussion includes federal law affecting personal injury cases, MSA\'s and CMS participation. General contract principles are also explored.
Fee award dollar general raymond dieppa chris wadsworthRaymond R. Dieppa
This document is a judgment ordering the defendant Dollar General to pay attorney's fees and costs to the plaintiff Michele Barry. It summarizes the background of the personal injury case, in which Barry sued Dollar General for injuries from a slip and fall in their store and was awarded $250,087 by a jury. The court found Dollar General's defense counsel engaged in unacceptable and willful misconduct by making false statements in their opening argument that directly contradicted video evidence. As a result, the court sanctioned Dollar General and its counsel under Florida statute 57.105. The court determined the attorney fees and costs requested by Barry's counsel were reasonable.
This newsletter provides summaries of recent reinsurance case law and regulatory developments from March 2014. It includes summaries of cases from New York, Tennessee, and California federal courts related to arbitration awards, protected cell reinsurance agreements, preclusion of subsequent arbitrations, and common interest privilege with reinsurers. It also summarizes cases related to tax treatment of retrocessional agreements, dismissal of defenses in a facultative reinsurance dispute, denial of stay in a mortgage reinsurance case, and assumption versus reinsurance.
This newsletter summarizes two recent court cases related to reinsurance:
1) The New York Court of Appeals reversed summary judgment in a case involving allocation of an asbestos settlement between a cedent and reinsurers. The court found issues of fact around the reasonableness of the cedent's allocation assumptions.
2) The Second Circuit held that the question of whether a contract clause provides for arbitration is governed by federal common law when the Federal Arbitration Act applies through the New York Convention. The court affirmed that an insurance contract clause allowing medical examinations to determine disability was an arbitration clause.
This newsletter summarizes recent reinsurance case law developments. The first case discusses an 8th Circuit ruling that an endorsement incorporating a jurisdictional clause superseded an alternative dispute resolution clause. The second case discusses a New Jersey ruling staying litigation in favor of arbitration over an alleged breach involving an offset dispute. The third case discusses an Illinois ruling dismissing an assignee's request for pre-answer security and motion to compel arbitration against a sovereign-owned reinsurer.
This case involves a dispute over insurance proceeds from an automobile accident settlement. Plaintiff Glenn Cody received $25,000 from the insurer of the at-fault driver, but had over $29,500 in medical expenses. Defendant MILA paid $17,632.18 of Plaintiff's medical expenses and asserts an equitable lien over the settlement funds. Plaintiff disputes the validity of MILA's lien. Plaintiff was also insured by Defendant Farm Bureau, which provided $25,000 in UM coverage, but disputes its applicability. The Court must determine the validity of MILA's lien to then address potential liability of Farm Bureau.
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & MootnessPollard PLLC
Lawyers in FLSA cases and particularly on the defense side should view this as a cautionary tale: Tendering a check for the wages at issue does not moot the plaintiff's claim. FLSA claims are live until there is a judgment or a settlement approved by the court. And plaintiffs DO get their fees for litigating over the issue of attorneys' fees.
Simply put: A legitimate FLSA case, a skilled attorney on the plaintiff side, and defense counsel who do not understand the applicable legal framework make for disastrous results.
This presentation discusses settlements of workers\' compensation cases in Florida. The discussion includes federal law affecting personal injury cases, MSA\'s and CMS participation. General contract principles are also explored.
Fee award dollar general raymond dieppa chris wadsworthRaymond R. Dieppa
This document is a judgment ordering the defendant Dollar General to pay attorney's fees and costs to the plaintiff Michele Barry. It summarizes the background of the personal injury case, in which Barry sued Dollar General for injuries from a slip and fall in their store and was awarded $250,087 by a jury. The court found Dollar General's defense counsel engaged in unacceptable and willful misconduct by making false statements in their opening argument that directly contradicted video evidence. As a result, the court sanctioned Dollar General and its counsel under Florida statute 57.105. The court determined the attorney fees and costs requested by Barry's counsel were reasonable.
This letter from Ecuador responds to the Tribunal's request for comments on Chevron's account of enforcement proceedings in Canada, Brazil, and Argentina related to the Lago Agrio judgment. Ecuador argues that the interim awards should be terminated because Chevron faces no imminent threat of irreparable harm, as Chevron claimed in 2012 to obtain the interim awards. Ecuador details the status and likely timelines of the pending enforcement actions, arguing that none will result in imminent asset seizures or irreparable harm to Chevron. Ecuador also notes that enforcement of the judgment is now legally impossible in the US, where Chevron apparently has direct assets. Therefore, Ecuador asserts, good cause exists to dissolve the interim awards.
This newsletter provides summaries of recent reinsurance cases:
1) The US Supreme Court clarified that arbitrators have broad authority to interpret contracts and their decisions should not be overturned even if their interpretation is incorrect, as long as they construed the contract.
2) A California court ordered parties to complete their arbitrator selection process and let the panel decide issues of consolidation and contractual provisions, rather than the court making those decisions.
3) A Connecticut court compelled arbitration in a fronting dispute, finding the reinsurer agreed to arbitrate based on references to underlying reinsurance agreements in an assumption agreement.
The newsletter also provides brief summaries of several other reinsurance court cases.
This document discusses proper valuation and exemption of property in consumer bankruptcy cases. It notes that accurately disclosing and claiming exemptions for assets like a home or car is important to allow the debtor to keep those assets after bankruptcy. The document provides guidance on properly valuing and exempting different types of assets, like real property, vehicles, and legal claims or lawsuits. It examines court rulings on issues like how appreciation in an asset's value after filing affects exemptions, and the level of detail and specificity required to disclose potential legal claims. The document emphasizes that full disclosure, with clear explanations of valuations, helps prevent issues with judicial estoppel or objections to discharge down the road.
This document is a report and recommendation from a magistrate judge regarding a motion to dismiss for lack of personal jurisdiction filed by the defendant, Info Directions, Inc. The plaintiff, Transverse LLC, alleges that Info Directions interfered with its contract and misappropriated its trade secrets related to billing software. The magistrate judge provides background on the parties and claims, summarizes the legal standards for personal jurisdiction, and will make a recommendation to the district court judge on the motion to dismiss.
Pleading Standards Applied to Asbestos and Mass Tort Claimsdsalmeida
The new federal pleading standards announced in recent Supreme Court decisions and their applicability and usefulness in the asbestos and mass tort context.
State of wash case mandatory arbitration clause in an insurance contract wa...Umesh Heendeniya
This case involves a dispute over whether arbitration clauses in two insurance policies issued by James River Insurance Company to the Washington State Department of Transportation (WSDOT) are enforceable. The trial court denied James River's motion to compel arbitration, finding the clauses violated state statutes prohibiting agreements that deprive state courts of jurisdiction over actions against insurers. The Supreme Court of Washington affirms, finding that the statutes are intended to protect the right to bring an original action in state court and that binding arbitration deprives courts of jurisdiction to consider the substance of disputes.
This case involves a dispute over entitlement to a partial refund of a special assessment paid into a fund to repair defects in a condominium building. The previous owners, who paid the special assessment, sold the property to the current owners. After the repairs were completed, there was a refund remaining in the fund. Both the previous and current owners claimed entitlement to the refund. The court found that the sale contract between the parties implicitly allocated the risk of any refund or future assessment to the purchasers. As such, the court ruled that the current owners were entitled to the refund as there was a valid contract between the parties providing a juristic reason for the enrichment.
This document is an order from a United States District Court regarding motions to dismiss filed by defendants Darren Chaker and Nicole Chaker in a civil RICO lawsuit brought by plaintiffs Scott McMillan and The McMillan Law Firm. The order summarizes the allegations in the plaintiffs' amended complaint, which claims the defendants engaged in a pattern of extortion, harassment, and other unlawful acts as part of a RICO enterprise. The order analyzes the defendants' motions to dismiss under Rule 12(b)(6), considering whether the plaintiffs have adequately alleged predicate acts of racketeering, cognizable damages, and other elements of RICO and state law claims.
The Second Circuit's decision in In re BGI, Inc. extended the doctrine of equitable mootness to Chapter 11 liquidation proceedings. Previously, the doctrine had only been applied to Chapter 11 reorganizations in the Second Circuit. The decision recognized that substantial interests favor preventing tardy disruption of confirmed and substantially consummated Chapter 11 liquidation plans, just as with reorganization plans. While other circuits have also applied equitable mootness to liquidations, its application varies between circuits, with some being more favorable to creditors and others more favorable to debtors.
Kindred Kentucky Supreme Court 16 32-op-bel-kyZ Research
The Supreme Court denied interlocutory relief to two nursing homes seeking to compel arbitration based on arbitration agreements signed by attorneys-in-fact during admission to the nursing homes. The Court found that the power-of-attorney instruments did not grant the attorneys-in-fact authority to waive the residents' right to access the courts. Additionally, the Court reaffirmed that wrongful death beneficiaries cannot be bound by arbitration agreements signed on behalf of the deceased.
The document discusses two motions in the case of Stephen M. Gaggero v. Knapp, Petersen and Clarke, et al.
1) The court partially granted the plaintiff's motion to quash the third deposition notice but ordered that the plaintiff submit to a final deposition of no more than 10 hours on a mutually agreeable date.
2) The court denied the plaintiff's motion to quash the subpoena for production of documents from the plaintiff's previous attorney. The court found that the plaintiff waived privilege by suing both the defendant and previous attorney and putting the attorney's conduct at issue. The documents were ordered to be produced.
BoyarMiller – The Before, During, and After of Non-Compete AgreementsBoyarMiller
This document summarizes considerations for drafting, enforcing, and defending against non-compete agreements. It discusses effective provisions to include, such as requiring employees to confirm they are not bound by other non-competes, and provisions for returning confidential information. It also notes issues to avoid, like contractual venue clauses and liquidated damages provisions that could undermine requests for injunctive relief. Additionally, it provides examples of letters to new hires about non-compete obligations and of orders that lacked necessary specificity in defining restricted activities.
The Court of Appeals affirms the lower court's granting of summary judgment to CitiMortgage in a foreclosure action. Maria Potvin argued she was entitled to relief under the Home Affordable Modification Program and that foreclosure was inequitable, but the court found the mediation was non-binding and she did not sign the modification agreement or make payments. The court also found the affidavit from CitiMortgage in support of summary judgment met evidentiary rules for records of regularly conducted business activities. Therefore, the appeals court denied all of Potvin's assignments of error and upheld the foreclosure.
Dixie Holdings filed an ex parte application seeking an extension of time to respond to Medical Marijuana Inc.'s petition to compel arbitration. Medical Marijuana Inc. opposed the application, arguing that Dixie is actually seeking relief from default as its time to respond had expired over two weeks prior. Medical Marijuana Inc. argued that Dixie failed to meet the requirements under CCP 473(b) to obtain relief from default, as Dixie did not provide specific facts demonstrating mistake, inadvertence, surprise or excusable neglect. Medical Marijuana Inc. also argued that Dixie made misstatements in its application and that there is no good cause to grant the relief sought.
Judge Mosman avoided directly ruling on the application of SB 814 to the defense costs being sought by Schnitzer, instead holding that Schnitzer was judicially estopped from arguing that its defense counsel was "independent counsel" subject to SB 814.
This document is a bench ruling from a bankruptcy judge on a motion to compel arbitration related to a debtor's cash collateral motion. The judge analyzes applicable case law and determines that:
1) Whether a debtor has authority to use cash collateral is fundamentally a bankruptcy issue, not a contractual dispute.
2) The parties did not agree to arbitrate issues relating to a debtor's rights under the Bankruptcy Code, as those rights were created by Congress and differ from pre-bankruptcy contractual rights.
3) Therefore, the motion to compel arbitration of the debtor's cash collateral motion is denied, as use of cash collateral is a core bankruptcy issue not subject to the arbitration agreement.
Express working capital llc v Starving Students IncM P
Synopsis
Background: Buyer of corporation's future credit card receivables brought action against seller-corporation and its owner, alleging breach of contract, promissory estoppel, fraud, and fraudulent inducement. Defendants asserted usury defense and counterclaim. Parties cross-moved for summary judgment.
This document is an answer filed by Illinois Midwest Insurance Agency, LLC to the applicant Marcela Acosta's petition for reconsideration of a workers' compensation claim. It summarizes the case history, including that Acosta alleged a cumulative trauma injury and is receiving temporary total disability benefits. It disputes the rate that benefits are being paid at. The answer argues that the original ruling should stand as it is based on substantial evidence, including Acosta's tax documents showing lower earnings than she claims, while she provided no documentation to support her testimony claiming higher earnings. It aims to show the original ruling was reasonably based on the evidence presented.
Doc962 freeman group motion compromise & settlement_ a walk-awaymalp2009
The Trustee filed a motion seeking court approval of a compromise and settlement agreement between the Trustee and the Freeman Parties. The agreement provides that Robert Freeman and David Ward will withdraw their respective $92,500 proof of claims against the estate with prejudice, and the Trustee will dismiss the Freeman Parties from an adversary proceeding. The agreement achieves a walk-away settlement and full mutual release of claims between the parties. The Trustee believes the settlement is in the best interest of creditors and the estate by avoiding substantial time and costs of litigation, despite believing there are good objections to the proof of claims.
Treasury Issues Binding Guidance on Medical Device Excise TaxPatton Boggs LLP
The Treasury Department issued final regulations and interim guidance on the new 2.3% excise tax on medical devices. The final regulations provide additional details on determining whether devices qualify for the retail exemption. The interim guidance provides constructive sales price safe harbors and treats licenses of medical devices as leases subject to the tax. The guidance also addresses donations, convenience kits, and provides penalty relief for the first three quarters of deposits.
President Signs the JOBS Act into Law to Simplify Capital Formation Patton Boggs LLP
The JOBS Act was signed into law to simplify capital formation for small companies. Key provisions include:
1) Creating "emerging growth companies" that have reduced regulatory requirements for 5 years after their IPO to encourage going public.
2) Allowing general solicitation for private offerings to accredited investors.
3) Increasing the Regulation A offering limit from $5M to $50M and preempting state securities laws.
4) Raising the shareholder threshold that triggers public reporting from 500 to 2,000 shareholders.
This letter from Ecuador responds to the Tribunal's request for comments on Chevron's account of enforcement proceedings in Canada, Brazil, and Argentina related to the Lago Agrio judgment. Ecuador argues that the interim awards should be terminated because Chevron faces no imminent threat of irreparable harm, as Chevron claimed in 2012 to obtain the interim awards. Ecuador details the status and likely timelines of the pending enforcement actions, arguing that none will result in imminent asset seizures or irreparable harm to Chevron. Ecuador also notes that enforcement of the judgment is now legally impossible in the US, where Chevron apparently has direct assets. Therefore, Ecuador asserts, good cause exists to dissolve the interim awards.
This newsletter provides summaries of recent reinsurance cases:
1) The US Supreme Court clarified that arbitrators have broad authority to interpret contracts and their decisions should not be overturned even if their interpretation is incorrect, as long as they construed the contract.
2) A California court ordered parties to complete their arbitrator selection process and let the panel decide issues of consolidation and contractual provisions, rather than the court making those decisions.
3) A Connecticut court compelled arbitration in a fronting dispute, finding the reinsurer agreed to arbitrate based on references to underlying reinsurance agreements in an assumption agreement.
The newsletter also provides brief summaries of several other reinsurance court cases.
This document discusses proper valuation and exemption of property in consumer bankruptcy cases. It notes that accurately disclosing and claiming exemptions for assets like a home or car is important to allow the debtor to keep those assets after bankruptcy. The document provides guidance on properly valuing and exempting different types of assets, like real property, vehicles, and legal claims or lawsuits. It examines court rulings on issues like how appreciation in an asset's value after filing affects exemptions, and the level of detail and specificity required to disclose potential legal claims. The document emphasizes that full disclosure, with clear explanations of valuations, helps prevent issues with judicial estoppel or objections to discharge down the road.
This document is a report and recommendation from a magistrate judge regarding a motion to dismiss for lack of personal jurisdiction filed by the defendant, Info Directions, Inc. The plaintiff, Transverse LLC, alleges that Info Directions interfered with its contract and misappropriated its trade secrets related to billing software. The magistrate judge provides background on the parties and claims, summarizes the legal standards for personal jurisdiction, and will make a recommendation to the district court judge on the motion to dismiss.
Pleading Standards Applied to Asbestos and Mass Tort Claimsdsalmeida
The new federal pleading standards announced in recent Supreme Court decisions and their applicability and usefulness in the asbestos and mass tort context.
State of wash case mandatory arbitration clause in an insurance contract wa...Umesh Heendeniya
This case involves a dispute over whether arbitration clauses in two insurance policies issued by James River Insurance Company to the Washington State Department of Transportation (WSDOT) are enforceable. The trial court denied James River's motion to compel arbitration, finding the clauses violated state statutes prohibiting agreements that deprive state courts of jurisdiction over actions against insurers. The Supreme Court of Washington affirms, finding that the statutes are intended to protect the right to bring an original action in state court and that binding arbitration deprives courts of jurisdiction to consider the substance of disputes.
This case involves a dispute over entitlement to a partial refund of a special assessment paid into a fund to repair defects in a condominium building. The previous owners, who paid the special assessment, sold the property to the current owners. After the repairs were completed, there was a refund remaining in the fund. Both the previous and current owners claimed entitlement to the refund. The court found that the sale contract between the parties implicitly allocated the risk of any refund or future assessment to the purchasers. As such, the court ruled that the current owners were entitled to the refund as there was a valid contract between the parties providing a juristic reason for the enrichment.
This document is an order from a United States District Court regarding motions to dismiss filed by defendants Darren Chaker and Nicole Chaker in a civil RICO lawsuit brought by plaintiffs Scott McMillan and The McMillan Law Firm. The order summarizes the allegations in the plaintiffs' amended complaint, which claims the defendants engaged in a pattern of extortion, harassment, and other unlawful acts as part of a RICO enterprise. The order analyzes the defendants' motions to dismiss under Rule 12(b)(6), considering whether the plaintiffs have adequately alleged predicate acts of racketeering, cognizable damages, and other elements of RICO and state law claims.
The Second Circuit's decision in In re BGI, Inc. extended the doctrine of equitable mootness to Chapter 11 liquidation proceedings. Previously, the doctrine had only been applied to Chapter 11 reorganizations in the Second Circuit. The decision recognized that substantial interests favor preventing tardy disruption of confirmed and substantially consummated Chapter 11 liquidation plans, just as with reorganization plans. While other circuits have also applied equitable mootness to liquidations, its application varies between circuits, with some being more favorable to creditors and others more favorable to debtors.
Kindred Kentucky Supreme Court 16 32-op-bel-kyZ Research
The Supreme Court denied interlocutory relief to two nursing homes seeking to compel arbitration based on arbitration agreements signed by attorneys-in-fact during admission to the nursing homes. The Court found that the power-of-attorney instruments did not grant the attorneys-in-fact authority to waive the residents' right to access the courts. Additionally, the Court reaffirmed that wrongful death beneficiaries cannot be bound by arbitration agreements signed on behalf of the deceased.
The document discusses two motions in the case of Stephen M. Gaggero v. Knapp, Petersen and Clarke, et al.
1) The court partially granted the plaintiff's motion to quash the third deposition notice but ordered that the plaintiff submit to a final deposition of no more than 10 hours on a mutually agreeable date.
2) The court denied the plaintiff's motion to quash the subpoena for production of documents from the plaintiff's previous attorney. The court found that the plaintiff waived privilege by suing both the defendant and previous attorney and putting the attorney's conduct at issue. The documents were ordered to be produced.
BoyarMiller – The Before, During, and After of Non-Compete AgreementsBoyarMiller
This document summarizes considerations for drafting, enforcing, and defending against non-compete agreements. It discusses effective provisions to include, such as requiring employees to confirm they are not bound by other non-competes, and provisions for returning confidential information. It also notes issues to avoid, like contractual venue clauses and liquidated damages provisions that could undermine requests for injunctive relief. Additionally, it provides examples of letters to new hires about non-compete obligations and of orders that lacked necessary specificity in defining restricted activities.
The Court of Appeals affirms the lower court's granting of summary judgment to CitiMortgage in a foreclosure action. Maria Potvin argued she was entitled to relief under the Home Affordable Modification Program and that foreclosure was inequitable, but the court found the mediation was non-binding and she did not sign the modification agreement or make payments. The court also found the affidavit from CitiMortgage in support of summary judgment met evidentiary rules for records of regularly conducted business activities. Therefore, the appeals court denied all of Potvin's assignments of error and upheld the foreclosure.
Dixie Holdings filed an ex parte application seeking an extension of time to respond to Medical Marijuana Inc.'s petition to compel arbitration. Medical Marijuana Inc. opposed the application, arguing that Dixie is actually seeking relief from default as its time to respond had expired over two weeks prior. Medical Marijuana Inc. argued that Dixie failed to meet the requirements under CCP 473(b) to obtain relief from default, as Dixie did not provide specific facts demonstrating mistake, inadvertence, surprise or excusable neglect. Medical Marijuana Inc. also argued that Dixie made misstatements in its application and that there is no good cause to grant the relief sought.
Judge Mosman avoided directly ruling on the application of SB 814 to the defense costs being sought by Schnitzer, instead holding that Schnitzer was judicially estopped from arguing that its defense counsel was "independent counsel" subject to SB 814.
This document is a bench ruling from a bankruptcy judge on a motion to compel arbitration related to a debtor's cash collateral motion. The judge analyzes applicable case law and determines that:
1) Whether a debtor has authority to use cash collateral is fundamentally a bankruptcy issue, not a contractual dispute.
2) The parties did not agree to arbitrate issues relating to a debtor's rights under the Bankruptcy Code, as those rights were created by Congress and differ from pre-bankruptcy contractual rights.
3) Therefore, the motion to compel arbitration of the debtor's cash collateral motion is denied, as use of cash collateral is a core bankruptcy issue not subject to the arbitration agreement.
Express working capital llc v Starving Students IncM P
Synopsis
Background: Buyer of corporation's future credit card receivables brought action against seller-corporation and its owner, alleging breach of contract, promissory estoppel, fraud, and fraudulent inducement. Defendants asserted usury defense and counterclaim. Parties cross-moved for summary judgment.
This document is an answer filed by Illinois Midwest Insurance Agency, LLC to the applicant Marcela Acosta's petition for reconsideration of a workers' compensation claim. It summarizes the case history, including that Acosta alleged a cumulative trauma injury and is receiving temporary total disability benefits. It disputes the rate that benefits are being paid at. The answer argues that the original ruling should stand as it is based on substantial evidence, including Acosta's tax documents showing lower earnings than she claims, while she provided no documentation to support her testimony claiming higher earnings. It aims to show the original ruling was reasonably based on the evidence presented.
Doc962 freeman group motion compromise & settlement_ a walk-awaymalp2009
The Trustee filed a motion seeking court approval of a compromise and settlement agreement between the Trustee and the Freeman Parties. The agreement provides that Robert Freeman and David Ward will withdraw their respective $92,500 proof of claims against the estate with prejudice, and the Trustee will dismiss the Freeman Parties from an adversary proceeding. The agreement achieves a walk-away settlement and full mutual release of claims between the parties. The Trustee believes the settlement is in the best interest of creditors and the estate by avoiding substantial time and costs of litigation, despite believing there are good objections to the proof of claims.
Treasury Issues Binding Guidance on Medical Device Excise TaxPatton Boggs LLP
The Treasury Department issued final regulations and interim guidance on the new 2.3% excise tax on medical devices. The final regulations provide additional details on determining whether devices qualify for the retail exemption. The interim guidance provides constructive sales price safe harbors and treats licenses of medical devices as leases subject to the tax. The guidance also addresses donations, convenience kits, and provides penalty relief for the first three quarters of deposits.
President Signs the JOBS Act into Law to Simplify Capital Formation Patton Boggs LLP
The JOBS Act was signed into law to simplify capital formation for small companies. Key provisions include:
1) Creating "emerging growth companies" that have reduced regulatory requirements for 5 years after their IPO to encourage going public.
2) Allowing general solicitation for private offerings to accredited investors.
3) Increasing the Regulation A offering limit from $5M to $50M and preempting state securities laws.
4) Raising the shareholder threshold that triggers public reporting from 500 to 2,000 shareholders.
The document provides information on legislative activities for the week of July 9, 2012. It summarizes bills scheduled for consideration in the House and Senate that week related to veterans, the farm bill, appropriations, cybersecurity, and education issues. It also outlines regulatory actions and hearings scheduled related to education issues like No Child Left Behind waivers and the gainful employment ruling.
House Members return to their districts this week while the Senate will not convene until January 21 for Inaugural Ceremonies. Congress passed a fiscal cliff deal negotiated by Biden and McConnell, representing the second step in deficit reduction after the 2011 Budget Control Act. The deal focused on $600 billion in tax increases but Republicans want further entitlement reforms in exchange for raising the debt ceiling. The House and Senate will consider reauthorizing education, workforce, and higher education laws as top priorities for the new Congress.
The House and Senate will be in session this week considering various bills and resolutions. The House will consider legislation redesignating NASA facilities and an academic competition resolution. It will also consider the Violence Against Women Reauthorization Act. The Senate will consider the nomination of Robert Bacharach to be a federal circuit court judge. Barring congressional action, $85 billion in automatic spending cuts (sequestration) will go into effect on March 1st, with various agency impacts. Political negotiations continue over a potential agreement to avoid or replace sequestration.
A Christine Martin Comp 100 Final Projectcmbmartin
This document presents an agenda to compare products from Dell, HP, and Gateway. It includes links to product pages for speakers included with a keyboard and mouse from Dell for $754.96. It also provides links to monitor and keyboard/mouse/speaker products from HP and Gateway. The document aims to present, compare features of, and create a chart for the products listed from the three companies.
Federal Financial Institutions Examination Council (FFIEC) Releases Proposed ...Patton Boggs LLP
The FFIEC has released proposed guidelines for financial institutions' use of social media to address risks. The guidelines recommend financial institutions implement social media risk management programs including governance, policies, employee training, oversight, and reporting. The FFIEC is seeking public comments on the proposed guidelines by March 25, 2013 to ensure all relevant risks are addressed.
This document summarizes issues that can arise when an insured faces litigation that may result in an excess judgment or claims that are both covered and not covered by their insurance policy. It discusses the inherent conflict of interest between the insurer and insured in these situations. It also outlines procedures for reasonableness hearings on settlement agreements between plaintiffs and insureds to determine if the settlement amount is reasonable. Key court cases are discussed that establish standards for reasonableness hearings and the rights and responsibilities of insurers and insureds in settlement agreements. Recommendations are provided for structuring settlement agreements to avoid issues of collusion.
Because of Evidence of a "Special Relationship" Between Insureds and Their Br...NationalUnderwriter
Because of Evidence of a "Special Relationship" Between Insureds and Their Broker, Insureds' Suit Against Broker Should Not Have Been Dismissed, NY's Highest Court Holds
New York’s highest court, the New York Court of Appeals, has ruled that sufficient evidence of a “special relationship” existed between insureds and their insurance broker such that a negligence lawsuit brought by the insureds against their broker should not have been dismissed at the summary judgment stage.
1) Construction contracts often require subcontractors to provide insurance naming the general contractor as an additional insured. However, determining what qualifies the general contractor for coverage as an additional insured has been an ongoing legal battle. 2) In this case, the New York Court of Appeals ruled that for a general contractor to be covered as an additional insured, the accident or loss does not need to be due to the named subcontractor's negligence, but rather only needs to arise out of the subcontractor's operations. 3) However, in this specific case, the general contractor conceded the subcontractor was not negligent, removing the only possible link between the subcontractor's work and the accident,
D'Agostino v Federal Ins Co , 969 F. Supp. 2d 116 (D. Mass. 2013)Richard Goren
1) The parties engaged in settlement negotiations but did not reach an enforceable agreement because while D'Agostino offered $1.15 million for a release, Federal responded with a release containing additional material terms like confidentiality requirements, which were not accepted.
2) The court denied Federal's motions to enforce the alleged settlement agreement and for protective orders, finding no agreement was formed.
3) The court also denied requests for sanctions from both parties, finding neither party's actions warranted sanctions.
This document is an excerpt from an omnibus order written by the author for a judge regarding a credit card collection case. The order summarizes that while the plaintiff established a valid contract existed between the creditor and defendant, the plaintiff failed to provide sufficient documentation proving a valid assignment of the debt from the creditor to the plaintiff. As a result, the judge granted summary judgment for the defendant rather than the plaintiff.
This order addresses the plaintiffs' motion for a temporary restraining order against the defendant. The court finds that the plaintiffs have sufficiently shown they have a protected interest in trade secrets and confidential information. They have also shown irreparable harm if an injunction is not granted, as the defendant is allegedly using protected information to directly compete with the plaintiffs in violation of a non-compete agreement. Additionally, the plaintiffs have no adequate legal remedy and have raised fair questions that they will likely succeed on their claims of breach of contract, trade secret misappropriation, and trademark infringement. Therefore, the court will grant the plaintiffs' motion for a temporary restraining order to preserve the status quo until a hearing can be held on a preliminary injunction.
The document provides a summary of recent case law updates from the Colorado Supreme Court and Colorado Court of Appeals, as well as announcements from the US District Court of Colorado regarding electronic case filing requirements. Key cases summarized include the Colorado Supreme Court interpreting the term "presently resides" in the Child Custody Act, the Court of Appeals finding that a "road rage" incident did not trigger uninsured motorist coverage, and the 10th Circuit Court of Appeals applying the automatic bankruptcy stay to all appeals involving a debtor. The document also lists the current CDLA directors.
Deterrent strategies in fraud litigation, September 2017, BirminghamBrowne Jacobson LLP
This seminar covered evidence, investigations and deterrent remedies. We focused on:
- an update on development of the use of s 57 CCJA 2015 and the effectiveness of pursuing fundamental dishonesty;
- unlocking evidence of fraud - forensic investigations around documents, mobile devices and computer data;
- costs sanctions against third parties;
- how to conduct an investigation in preparation for potential criminal action;
- evidential and legal considerations in bringing contempt proceedings.
Deterrent strategies in fraud litigation, September 2017, LondonBrowne Jacobson LLP
This seminar covered evidence, investigations and deterrent remedies. We focused on:
- an update on development of the use of s 57 CCJA 2015 and the effectiveness of pursuing fundamental dishonesty;
- unlocking evidence of fraud - forensic investigations around documents, mobile devices and computer data;
- costs sanctions against third parties;
- how to conduct an investigation in preparation for potential criminal action;
- evidential and legal considerations in bringing contempt proceedings.
Restoring the Corners to Contracts- David J. Myers, ESQ.Debi Myers
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Recently, Division One of the Court of Appeals of Washington State affirmed a jury verdict awarding $13 million in damages to a passenger injured in a car accident, finding that the $4.15 million agreed amount of the covenant
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In Miller v. Kenny and Safeco Ins. Co.,[1] the Court of Appeals ruled on several additional issues on appeal including whether evidence of an insurance company’s loss reserves is properly admissible at trial.
This motion seeks to preclude the defense from introducing evidence of the plaintiff's prior criminal record from New Jersey. Specifically, it aims to prevent evidence related to an accusation that the plaintiff obtained temporary disability benefits through deception. The plaintiff was accepted into a pretrial intervention program in New Jersey for this accusation but did not plead guilty. The motion argues this evidence should be excluded as it involves a collateral matter unrelated to the issues in the current civil case, and risks unduly prejudicing the plaintiff. Introduction of such extrinsic evidence to impeach a witness on a collateral matter is prohibited.
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...NationalUnderwriter
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Party Bad Faith; Acknowledges Relevance of Actual Investigation by Frederic J. Giordano and Robert F. Pawlowski
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This is a detailed overview of the enforcement of foreign arbitral awards: New York Convention 1958, with a special reference to the section on foreign arbitral awards in Nepalese Arbitration act 2055.
Enforcement of foreign arbitral awards Dechen Gurung
The document discusses international commercial arbitration and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It provides an overview of key aspects of the Convention, including that it establishes rules for recognizing and enforcing arbitral awards internationally. The Convention has 159 member states and aims to ensure arbitral awards are recognized and enforced similarly to domestic awards. The summary also outlines grounds for refusing recognition or enforcement of an award under the Convention.
Class Actions: Insurance Related Claims
by Thomas F. Segalla
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Federal Court Denying Motion by Satish Vuppalapati, Madhavi Vuppalapati and A...mh37o
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December 2012 Reinsurance Newsletter
1. REINSURANCE NEWSLETTER
December 2012
RECENT CASE SUMMARIES
Third Circuit Relieves Reinsurer of Indemnity Obligations Due to Late Notice Even Where No
Resulting Prejudice Shown
Pacific Employers Ins. Co. v. Global Reinsurance Corp. of Am., 693 F.3d 417 (3d Cir. 2012).
Reversing a lower court decision, the United States Court of Appeals for the Third Circuit ruled that a reinsurer had no
obligation to indemnify its reinsured for certain asbestos- related losses due to late-notice of loss given by the reinsured.
Applying New York law, the Third Court concluded that the reinsurer did not need to demonstrate it was prejudiced as a
result of the late notice.
The dispute arose under a certificate of reinsurance obtained by the reinsured from the reinsurer’s predecessor covering
an excess policy. Paragraph D of the reinsurance certificate stated that “[a]s a condition precedent, [the reinsured] shall
promptly provide the Reinsurer with a definitive statement of loss on any loss or occurrence.” The reinsured had received
initial notice of the claim in April 2001 and the underlying loss reached the excess layer by 2004. The reinsured advised
its broker to keep its reinsurers informed about the claim in 2006, 2007 and 2008, but the broker failed to do so. The
reinsurer was first provided notice of the claim in April 2008, with a demand for payment following in September 2009.
Having discovered that the reinsured had first received notice in 2001, the reinsurer denied coverage and asserted a late
notice defense.
The district court had acknowledged that the reinsurance certificate unambiguously required the reinsured to provide a
definitive statement of loss promptly after the initial claim from the underlying insured. It also found that the submission
of a definitive statement of loss was a condition precedent to recovery. But, the district court determined that—in the
absence of an explicit choice of law provision—it was required to determine which law applied to the dispute. This issue
was critical because of the conflict raised by the competing laws. Under New York law, which the reinsurer argued should
apply, the reinsurer was not required to show prejudice to succeed on its late notice defense. Under Pennsylvania law,
which the reinsured argued in favor of, prejudice was arguably a requirement for succeeding on a late notice defense.
Although there was no definitive statement from the Supreme Court of Pennsylvania, the district court agreed with the
reinsured and predicted that prejudice would in fact be a requirement under Pennsylvania late notice law. It concluded
that the reinsurer had failed to allege facts supporting a finding of prejudice.
On appeal, the Third Circuit reversed. It agreed with the district court that New York law on the subject was not in dispute
and that a showing of prejudice was not required for a late notice defense. While acknowledging that there was no
clear guidance in Pennsylvania, the Third Circuit agreed that Pennsylvania law would likely require a showing of prejudice
because of Pennsylvania’s interest in preventing technical forfeitures of coverage. Faced with a true conflict, the Third
Circuit conducted a choice of law analysis and determined that, contrary to the district court’s conclusion, New York law
applied. At the time the agreement was signed in 1980, the reinsurer was located in New York and the reinsured was
located in California. The only connection to Pennsylvania was that the reinsured had become a Pennsylvania company in
2. 1999. Although not easily ascertainable because the minimal negotiations of the certificate occurred via telex, the court ultimately
decided that the place of contract formation was determined to be New York. Based on the totality of the circumstances at the time
of contracting, where a New York reinsurer accepted, in New York, the terms and conditions of an agreement with a California company,
there was no reason to believe the parties had any expectation that Pennsylvania law would apply. The court thus ruled that New York
law applied and that the reinsurer was not required to show prejudice in order to deny coverage. The Third Circuit therefore reversed
the lower court’s ruling and ordered that judgment of non-liability be entered in the reinsurer’s favor.
As an aside, New York law on late notice requires a showing of prejudice generally, but not when the reinsurance contract has an
explicit condition precedent notice requirement as was the case here.
New York Federal Court Confirms Arbitration Awards for Cedent
Century Indem. Co. v. AXA Belgium, No. 11 Civ. 7263, 2012 WL 4354816 (S.D.N.Y. Sept. 24, 2012).
A New York federal court granted a cedent’s petition under the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards to confirm multiple arbitration awards in its favor, denied cross-petition to vacate the awards, and denied motions to seal.
The arbitration concerned multiple contracts through which the parties had overlapping liability to each other for various insurance
and reinsurance obligations. A key dispute before the arbitration panel was the interpretation of a termination provision in one of the
underlying contracts, which affected the parties’ liability for losses under those contracts.
The panel permitted extensive discovery, pre-hearing briefing, multiple position statements and the use of hundreds of evidentiary
exhibits. During a nine-day hearing, the parties presented a total of 11 witnesses, introduced exhibits into evidence, and made
opening and closing statements. The panel deemed the hearing a “final hearing on the merits” and ruled in the cedent’s favor.
The cedent moved to confirm the award, while the reinsurer moved to vacate. The court granted the petition to confirm, finding that
arbitration awards are subject to extremely limited review and are only rarely to be overturned. The court, in a fairly detailed analysis,
rejected the reinsurer’s allegations that the panel refused to hear evidence and found it had a “full and fair” opportunity to present
its case before the panel. The court also found that the panel acted within its authority in interpreting the disputed termination
provision, awarding punitive damages where it found the reinsurer had not acted in good faith, and retaining jurisdiction to oversee
implementation of its award. Finally, the court rejected the reinsurer’s argument that the panel manifestly disregarded governing law
(here the law of Belgium). The court noted that the reinsurer had not raised the issue of Belgian law in its briefing or at the arbitration
hearing, but raised it for the first time on a petition to modify the award.
Although the parties were at odds as to the propriety of the award, they both moved to file certain documents under seal pursuant to
a confidentiality agreement. The court held that the documents at issue were judicial documents to which a presumption of access
attaches, and although the confidentiality agreement was binding on the parties, it did not preclude the court from making those
documents available to the public. In reaching its decision, the court noted that although parties to arbitration are generally able
to keep documents confidential, the “circumstance changes when a party seeks to enforce in federal court the fruits of their private
agreement to arbitrate, i.e., the arbitration award.”
In short, the court emphasized that overturning an arbitration award is difficult and unlikely in all but the most extreme circumstances.
In addition, even parties with confidentiality agreements may not be able to seal material from an arbitration hearing if access to the
federal courts is taken.
Page 2 of 10
3. Wisconsin Federal Court Transfers Arbitrator Selection Dispute to New York
Employers Ins. Co. of Wausau v. Arrowood Indemn. Co., Nos. 12-cv-283-bbc, 12-cv-284-bbc, 12-cv-285-bbc, 2012 WL
5306152 (W.D. Wis. Oct. 26, 2012).
A Wisconsin federal court avoided having to resolve a dispute over arbitrator selection and consolidation by
transferring the case to the federal court in New York. Three cases were brought when the parties could not
agree on the method for selecting arbitration panels in disputes arising from a series of reinsurance contracts.
The cedent argued that venue was not proper in Wisconsin because the contracts all had New York forum
selection clauses in their arbitration provisions. In transferring the cases to New York, the court agreed with
the cedent and found that the forum selection clause was mandatory and must be enforced under Section 4 of
the Federal Arbitration Act (“FAA”). The court rejected arguments that Section 5’s appointment of the arbitrator
or umpire provisions, which are not affected by venue, would require the case to stay in Wisconsin.
Texas Federal Court Denies Security Application for De Minimis and Premature Claims
Gen. Fidelity Ins. Co. v. WFT, Inc., No. 3:11-cv-0448-P, 2012 U.S. Dist. LEXIS 148726 (N.D. Tx. Oct. 15, 2012).
In a dispute between a reinsurer and a managing agent, a Texas federal court declined to award security in aid of arbitration under a
Texas statue that permits a party to file a security application with a court either during or after the conclusion of arbitration. In the
underlying arbitration, the reinsurer sought $4.5 million in commissions retained by the managing agent, $71,068.82 in retained
bonus commissions and pre-award interest, and $2.5 million in additional commissions it believed would be due based on future
performance of the book of business. The arbitration panel denied the reinsurers claim for $4.5 million in retained commissions
though it did award $71, 068.82 in retained bonus commissions and pre-award interest. The panel deferred its decision on the
remaining $2.5 million claim because the necessary reports to validate the claim had not yet been submitted. In court, the reinsurer
sought security for both the undisputed $71,068.82 it was owed, and for its still-pending $2.5 million claim. The reinsurer argued
that several outstanding federal tax liens levied by the Internal Revenue Service against the managing agent raised doubts about the
agent’s ability to satisfy any judgment.
In denying the reinsurer’s security application, the court noted that although the applicable Texas statute did not specify any
procedural safeguards a court must take into account to ensure fairness of any security, a court should, at a minimum, consider both
parties’ arguments concerning the probable validity of the underlying claims. Because the arbitration panel had deferred deciding on
the $2.5 million future commission claim, the court determined that the reinsurer could not establish that it was likely to succeed on
the claim. The court therefore concluded that security for claims that the panel had determined were premature was not warranted.
Turning to the remaining $71,068.82 component of the security application, the court acknowledged that the managing agent did
not dispute the validity of this award. But because that amount was de minimis, and was possibly going to be offset by an award for
attorney fees in the agent’s favor, security was not warranted in this instance either.
New York Federal Court Grants Reinsurer Summary Judgment on Most Claims Made by Terminated
Managing Agent
Acumen Re Mgmt. Corp. v. Gen. Sec. Nat’l Ins. Co., No. 09 Civ. 796, 2012 WL 3890128 (S.D.N.Y. Sept. 7, 2012).
A New York federal court was faced with cross-motions for summary judgment on a dispute over commissions based on the
profitability of reinsurance contracts written by a managing agent. The underwriting agency agreement provided for the calculation
of underwriting commissions and contingency commissions based on the reinsurer’s annual net profits. By agreement, the parties
terminated the relationship, but certain reporting requirements and contingent commission calculations were required as part of the
Page 3 of 10
4. termination agreement.
Subsequent to the termination of the underwriting agreement, the reinsurer commuted a series of underlying reinsurance contracts
on programs that were not performing well. The business written by the managing agent represented a fraction of the business
commuted, but a substantial portion of the managing agent’s income-deriving business with the reinsurer. The reinsurer did not
consult with the managing agent on the commutations.
In performing the contingency commission calculation for certain underwriting years, it turned out that there was no profits in
the business and therefore no commissions were due. The managing agent claimed that the reinsurer breached its contract by
not providing certain reports, failing to properly calculate the commissions, failing to consult when establishing IBNR, and using
commuted losses in the commission calculations and other defects. The question for the court was whether any of the reinsurer’s
actions result in a breach of either the termination agreement or the original underwriting agreement.
The court found that the failure to provide quarterly reports after the commutations was a breach, but that the breach was waived
by the underwriting agent because it never inquired about the reports and accepted the periodic reporting it had been receiving.
The court also found no contractual requirement that the reinsurer consult with the managing agent on establishing IBNR for
the contingent commission calculation. The court also found no breach because the reinsurer included commuted losses in the
calculations or in the way the calculations were performed.
Summary judgment was denied on the issue of data quality because enough of a factual issue was raised on whether the reinsurer
properly maintained its records on the managing agent’s business. The court ordered that the managing agent may proceed to trial on
its data quality breach claim even though the claim may be limited to nominal damages.
Texas Federal Court Finds for Managing Agent of Cedent Against Reinsurer
Lincoln Gen. Ins. Co. v. U.S. Auto Ins. Servs., Inc., No. 3:10-CV-2307-B, 2012 WL 3777408 (N.D. Tex. Aug. 30, 2012).
A Texas federal court granted an underwriting agent’s motion for summary judgment in part in a complicated dispute arising out of
the reinsurance of automobile insurance policies written by the underwriting agent and the manner in which losses and commissions
were paid and calculated. An earlier action was dismissed after a tentative settlement was reached, but the settlement failed and this
action, with additional claims, was filed claiming that the underwriting agent improperly used funds and withheld and misappropriated
nearly $18 million by manipulating the calculation of the contingent commission.
The court first addressed the issue of whether there was a fiduciary duty owed by the underwriting agent to the reinsurer. After a
detailed analysis of the relevant agreements, the court found that the reinsurer did not demonstrate that the underwriting agent owed
it a fiduciary duty. The agreements, consistent with Texas insurance law, required the underwriting agent to hold the premiums as a
fiduciary on behalf of the insured or insurer, and must deposit the funds in an escrow account. Essentially, while the underwriting
agent acted as an agent for the reinsurer for certain activities, the provisions of the agreement cannot transfer fiduciary duties owed
to the cedent directly to the reinsurer. The court made the same findings concerning the interpretation of the relevant insurance code
provisions. Accordingly, the court granted the underwriting agent’s motion for summary judgment on the reinsurer’s claim for breach
fiduciary duty.
The court also rejected the reinsurer’s claims for conversion because the claims fell within the terms of the contracts and the
economic loss rule limited the claim to breach of contract and not the tort of conversion. The court found that nothing in the
agreements preserved common law remedies and the reinsurer did not show how there could be damages other than economic loss.
The court denied the reinsurer’s summary judgment motion for breach of contract because the contracts did not unambiguously
establish each party’s obligations in case of termination.
Page 4 of 10
5. Illinois Federal Court Grants Summary Judgment to Cedent Under Follow-the-Settlements Clause
Arrowood Indemn. Co. v. Assurecare Corp., No. 11 CV 5206, 2012 WL 4340699 (N.D. Ill. Sept. 19, 2012).
An Illinois federal court granted summary judgment to a cedent against its reinsurer in a dispute over settlement of a coverage
declaratory judgment action following settlement of an underlying wrongful death action. The reinsurer provided a 100 percent quota
share treaty covering the first $250,000 of net liability, plus a proportion of loss adjustment expenses. An underlying loss was settled
and the reinsurer paid, but the insured brought a coverage action against the cedent claiming that more of the underlying settlement
should have been covered. The cedent settled the coverage action and billed the reinsurer for its share of the settlement plus
expenses. The reinsurer refused to pay and the cedent drew down on letters of credit that the reinsurer was required to maintain to
satisfy a portion of the settlement and commenced this action.
In granting summary judgment to the cedent, the court, construing the contract under Connecticut law, construed the loss settlements,
follow-the-settlements, and follow-the-fortunes clauses and found for the cedent. The court sets out a good summary of follow-the-
settlements law. On the merits, the court noted that the underlying dispute was about how the term medical incident was construed
under the policy. The treaty requires that all loss settlements by the cedent by way of compromise confer liability on the reinsurer.
Because there was no evidence of bad faith by the cedent, the court held that the settlement was covered under the treaty.
The reinsurer argued that a portion of the settlement that was allocated to the insured’s bad faith claim was not covered, but the
court found that it was arguably covered and pointed to the treaty’s ECO clause. The court rejected the reinsurer’s argument that the
claim was reported late and therefore was not covered because the provision of the treaty cited was not a true notice provision and
no prejudice had been shown. Finally, the court required the reinsurer to replenish its collateral as required under the treaty after the
draw down on the letters of credit.
New Jersey Federal Court Grants Partial Summary Judgment to Retrocedent, But Preserves Rescission
Claim for Trial
Munich Reinsurance Am., Inc. v. Am. Nat’l Ins. Co., No. 09:6435, 2012 WL 4475589 (D. N.J. Sept. 28, 2012).
In a complicated retrocessional dispute, the New Jersey federal court granted in part and denied in part the retrocedent’s motion for
summary judgment and preserved the retrocessionaire’s rescission counterclaim for trial. In its opinion, the court provides a nice
basic primer on reinsurance and cites many articles and treatises written by reinsurance practitioners, including one footnote citation
to an article written by this newsletter’s editor.
The dispute centers on the alleged failure of the retrocessionaire to pay under two of the retrocessional agreements. The
retrocessionaire alleges various counterclaims and seeks rescission based on misrepresentations it claims it uncovered during
discovery.
The court construed the claims under New York law and first addressed the retrocessionaire’s rescission claim and whether the
claim was asserted within a reasonable period of time. After reviewing the facts, the court denied the retrocedent’s motion for
summary judgment on the retrocessionaire’s rescission claim based on waiver. The court also held neither party’s motion for
summary judgment on the rescission claim was appropriate because of competing expert testimony. The court also denied the
retrocessionaire’s motion for summary judgment on late notice holding that the relevant language in the notice clause did not
operate as a condition precedent, but held in favor of the retrocedent because the retrocessionaire was unable to carry its burden of
demonstrating prejudice.
The court also ruled in favor of the retrocedent on the construction of the retention provision of the retrocessional contract. The
retrocedent claimed that the retention provision triggered the retrocedent’s obligation when both the retrocedent and the underlying
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6. ceded paid a cumulative total of $500,000 on each loss occurrence. The retrocessionaire claimed that the underlying cedent’
payments did not count toward ultimate net loss. The court found that the contract language was only susceptible to one reasonable
interpretation and that extrinsic evidence supported that same conclusion.
Iowa Federal Court Dismisses Claims Against Bermuda Reinsurance Affiliates
Schultz v. Ability Ins. Co., No. C11-1020, 2012 WL 4794365 (N.D. Iowa Oct. 9, 2012).
In this long term insurance benefits dispute, claims were brought by the policyholder against Bermuda-based reinsurance companies
affiliated with the insurer. The Bermuda companies (and others) filed a motion for judgment on the pleadings. In addressing whether
the court had personal jurisdiction over the Bermuda companies, the court found that there were no direct contacts with Iowa, no
offices or employees in Iowa, and that they do not conduct business in Iowa. Although the policyholder pointed out that nearly 75
percent of the insurer’s risk was reinsured in Bermuda, the court held that the policyholder had not made out a prima facie case
showing that the insurer was the alter ego of the Bermuda companies or acted as their agent. The court stated that “[w]hile one can
question the wisdom of regulators permitting [the insurer] to purchase reinsurance from a member of the same corporate family, it
does not render the contractual relationship a ‘sham’ or otherwise make [the Bermuda companies] susceptible to suit in Iowa.”
Piercing the corporate veil and proving an alter ego corporate theory is very difficult as this case shows. What this case also points
out to Bermuda and other off-shore affiliates of U.S. companies is that keeping corporate separateness and observing all the
appropriate regulatory and corporate governance compliance rules is crucial to avoid being haled into court.
California Appeals Court Affirms Quashing of Complaint Against Bermuda Company
Hollander v. XL Ins. (Bermuda) Ltd., No. B230807, 2012 WL 4748956 (Cal. Ct. App. Oct. 5, 2012).
A California appeals court has affirmed a trial court’s order quashing service of a summons and complaint for lack of personal
jurisdiction against a Bermuda insurer. The Bermuda insurer made a special appearance and moved to quash because it did not
issue the policies in issue, did not do business in California, and its small number of insureds in California did not subject it to
jurisdiction. The policyholder argued that the Bermuda insurer did substantial business in California and was party to a quota share
reinsurance agreement that results in the Bermuda company’s sharing in California risks written by XL group members.
In affirming the trial court, the appellate court held that the Bermuda insurer is not subject to general jurisdiction in California. The
minimal California policyholders it has and its participation in the reinsurance agreement, the court found, was too de minimis to
confer jurisdiction. The court also rejected any alter ego theory. The court noted again how the policy in issue was not one issued by
the Bermuda company. The case offers a good analysis of what makes for contacts with a state and how off-shore companies can
maintain their protection from personal jurisdiction in states where they do not do substantial business.
Florida Appellate Court Affirms Decision Rejecting Forum Non Conveniens Challenge to Foreign
Reinsurer’s Complaint
ABA Capital Markets Corp. v. Provincial De Reaseguros C.A., No. 3D12-130, 2012 WL 5416441 (Fla. Dist. Ct. App. Nov.
7, 2012).
In this appeal of a lower court’s non-final order denying defendant’s motion to dismiss a foreign reinsurer’s complaint on the basis of
forum non conveniens, the Third District Court of Appeals for the State of Florida permitted a Venezuelan reinsurer to avail itself of the
forum of its choice.
The foreign reinsurer entered into a transaction with an entity incorporated in the British Virgin Islands (“BVI Entity”). The transaction
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7. involved a bond swap and off-shore investments in U.S. dollars. When the BVI Entity refused to return the bonds or transfer them to a
designated custodian, the reinsurer filed suit in Florida state court alleging fraud, civil theft, conversion, breach of fiduciary duty, unjust
enrichment and breach of contract.
The BVI Entity moved to dismiss the complaint for failure to state a claim and forum non conveniens, arguing that Venezuela was
the more appropriate forum. On appeal, the court addressed only forum non conveniens and applied a four-part analysis, reviewing
1) whether an adequate alternative forum exists; 2) relevant factors of private interest; 3) factors of public interest, where private
interests are in balance or near equipoise; and 4) if the plaintiff could reinstate its suit in the alternative forum without undue
inconvenience or prejudice. After noting that Venezuela was a suitable alternative forum, the appellate court turned to private
interests. Although acknowledging that a plaintiff’s choice of forum is generally respected, the court stated that a plaintiff’s choice “is
given less deference when the plaintiff is not a resident of the forum state, or has little bona fide connection to that state.” The court
found, however, that the main witness and president of the BVI Entity resided in Miami, the BVI Entity held the bonds in Miami and
maintained bank accounts there, other witnesses had traveled from Venezuela to Miami and were able to continue to do so, and all
key documents had been translated from Spanish to English. Ultimately, the court held that although the Venezuelan reinsurer was
“entitled to less deference” than a plaintiff who resided in Florida, the lower court correctly denied the BVI Entity’s motion to dismiss.
Finding that the second factor of its analysis was not met, the court did not address the remaining factors.
Connecticut Appellate Court Rules That a Commutation Agreement Terminated Reinsurer’s Obligations
to Cedent
Trenwick Am. Reinsurance Corp. v. W.R. Berkley Corp., 54 A.3d 209 (Conn. App. Ct. 2012).
A Connecticut appellate court affirmed a trial court judgment holding that an agreement between the reinsurer and the cedent
commuted their prior reinsurance contract. The parties originally entered a reinsurance contract explicitly providing for the reinsurer
to accept a portion of the cedent’s overall losses in exchange for part of the premiums the cedent collected. Subsequent to this
reinsurance contract, the parties entered a commutation agreement. The commutation agreement, by its express terms, terminated all
prior “reinsurance agreements” between the parties. The commutation agreement defined “reinsurance agreements” as contracts in
which a reinsurer reinsures certain liabilities of the cedent. Despite the commutation agreement, the parties, for four years, continued
exchanging reinsurance payments for premiums, as per the terms of the original reinsurance contract. Then, the reinsurer terminated
payments citing the global language of the commutation agreement and filed suit seeking restitution for the amounts unnecessarily
paid to the cedent. The cedent argued that the commutation agreement should be reformed because the parties were mistaken as to
whether the original reinsurance contract was commuted.
The court refused to reform the contract because the parties agreed to an unambiguous commutation agreement terminating
the original reinsurance contract. The court bound the cedent to the commutation agreement because the cedent’s experienced
officer drafted the commutation agreement with the help of counsel, and the clear language of the agreement terminated all prior
reinsurance contracts. Moreover, the commutation agreement was not ambiguous when, by its terms, it terminated all “reinsurance
agreements.” The commutation agreement’s definition of reinsurance as agreements where a reinsurer reinsures certain liabilities of
an insurer clearly encompassed the parties’ prior reinsurance contract.
The court also affirmed the denial of restitution because both parties for four years performed their respective obligations under the
contract notwithstanding the commutation agreement. Because there was no evidentiary foundation for a court to have determined
that one party had been unjustly enriched at the expense of the other, restitution was not appropriate.
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8. Illinois State Court Dismisses Cedent’s Post-Arbitration Complaint Seeking Attorney Fees for Reinsurer’s
Alleged Unreasonable Failure to Settle Claim
Amerisure Mut. Ins. Co. v. Global Reinsurance Corp. of Am., No. 10 L 012665 (Ill. Cir. Ct. Nov. 7, 2012).
An Illinois state court dismissed a cedent’s complaint seeking attorney fees for a reinsurer’s alleged unreasonable failure to settle
a claim. The cedent submitted a claim to the reinsurer, but the reinsurer disputed the claim. Under an arbitration clause in the
reinsurance contract, the parties commenced arbitration in Illinois and applied Illinois law. Following the arbitration, the cedent filed
suit seeking attorney fees under state law after an appeals court ruled that the arbitration panel exceeded its authority in awarding
attorney fees and the lower court erred in confirming that award.
The court dismissed the cedent’s complaint because under a choice of law analysis, New York law, not Illinois law, applied, and New
York law does not provide for attorney fees when an insurer fails to settle a claim. The reinsurance contract did not have a choice-
of-law clause applicable to litigation. The only choice-of-law clause in the reinsurance contract governed the applicable law in
arbitration. As a result, the court had to apply a two-step choice of law analysis. First, the outcomes would differ if New York or Illinois
law applied because only the Illinois Insurance Code, and not New York law, provides for attorney fees when a reinsurer unreasonably
fails to settle a claim. Second, New York had more significant contacts because the reinsurer was a New York company, and the
place of performance and last act under the reinsurance contract was either in New York or Michigan. The court found that the Illinois
contacts were that the cedent had an Illinois attorney and the arbitration took place in Illinois. Despite Illinois’ interest in discouraging
alleged unreasonable conduct by insurers, the court held that New York had the most significant contacts and that New York law
applied. As such, under New York law, the cedent could not recover attorney fees from the reinsurer.
What makes this case interesting is that it is post-arbitration litigation over an alleged state law right to attorney fees after the appeals
court held that the arbitrators lacked the authority to award attorney fees. This only becomes an issue in states where statute
provides a remedy to parties that cannot be granted by an arbitration panel.
Counsel Disqualification Case Appeal Mooted by Settlement
In our predecessor December 2011 and March 2012 Reinsurance Newsletters we reported on the Northwestern Nat’l Ins. Co. v.
INSCO decision disqualifying counsel from representing the reinsurer in a reinsurance arbitration because of the disclosure of panel
communications. That case had been on appeal. That appeal has now been dismissed because of a settlement agreement between
the parties on the underlying reinsurance dispute.
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9. RECENT SPEECHES AND PUBLICATIONS
David Farber spoke on “Medicare Secondary Payer: Current Issues, Future Problems,” at a live webinar on West LegalEdcenter, on
September 11, 2012.
Suman Chakraborty was a facilitator at The Reinsurance Association of America’s “Re Claims: Reinsurance Claims and Loss
Management” seminar on September 13, 2012, in New York City.
Larry Schiffer moderated a webinar for West LegalEdcenter on The Growing Expansion of Insurance Coverage Demands for Financial
Fraud Claims, on October 22, 2012.
Larry Schiffer’s Commentary, “Underwriting and Claims Clauses in Reinsurance Agreements,” was published on the website of the
International Risk Management Institute, Inc., IRMI.com, in September 2012.
Larry Schiffer’s chapter, “Preparing a Busy Business Executive for Deposition,” was published as an eBook by ExecSense in October
2012.
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10. For more information, please contact your Patton Boggs attorney or a member of the Insurance and Reinsurance
Dispute Resolution Practice Group:
JOHN M. NONNA MARK D. SHERIDAN LARRY P. SCHIFFER
Partner Partner Partner
[T] 646.557.5172 [T] 973.848.5681 [T] 646.557.5194
jnonna@pattonboggs.com msheridan@pattonboggs.com lschiffer@pattonboggs.com
ERIDANIA PEREZ MARK C. ERRICO SUMAN CHAKRABORTY
Partner Partner Partner
[T] 646.557.5137 [T] 973.848.5668 [T] 646.557.5142
eperez@pattonboggs.com merrico@pattonboggs.com schakraborty@pattonboggs.com
JASON F. KING SHANNON W. CONWAY DAVID J. FARBER
Of Counsel Partner Partner
[T] 973.848.5687 214.758.6609 202.457.6516
jking@pattonboggs.com sconway@pattonboggs.com dfarber@pattonboggs.com
EDWARD D. GEHRES T. MICHAEL GUIFFRE STEPHEN J. KOTT
Partner Partner Partner
202.457.6016 202.457.6441 202.457.5224
egehres@pattonboggs.com mguiffre@pattonboggs.com skott@pattonboggs.com
EDWARD S. WISNESKI J. THOMAS GILBERT
Partner Of Counsel
202.457.6065 214.758.6686
ewisneski@pattonboggs.com tgilbert@pattonboggs.com
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