On Friday, the Massachusetts Appeals Court handed down its decision in Rivera v. Commerce Insurance Company, No. 12-P-483 (Aug. 16, 2013). The insurance industry should take note of this unfair claim settlement practices case because the court determined that Commerce Insurance Company was liable for the plaintiffs’ tort-related litigation expenses following what was determined to be a bad-faith and unreasonable settlement offer, and proceeded to note precisely what constituted “tort-related litigation expenses.” A copy of the decision is available through the court’s website

In a decision that has implications for reinsurance, the Massachusetts Supreme Judicial Court last week decided that the Federal Arbitration Act preempts the Massachusetts Arbitration Act where the relevant contract involves interstate commerce. The decision is McInnes v. LPL Financial, LLC, et al., No. SJC-11356 (Aug. 12, 2013), and is available at the court’s website

Recently, the Massachusetts Supreme Judicial Court considered the standard for determining when a title insurer’s duty to defend is triggered. Finding that the scope of the title insurer’s duty to defend is narrow, the court concluded that a title insurer owes a duty to defend only where the title insurance policy at issue specifically envisions the type of loss alleged. 

On June 26, 2013, the Appeals Court of Massachusetts determined that an automobile exclusion in a commercial general liability insurance policy precludes coverage for claims against an insured for alleged negligent supervision of an intoxicated employee, even where the policy at issue contains a “severability of interests” clause. 

Four members of our Insurance and Reinsurance Department recently conducted a webinar in which they addressed potential claims arising from the Boston Marathon bombings as well as possible insurance implications related to those claims. They discussed a variety of issues, focusing on who will likely bear financial responsibility for the resulting losses and the availability of insurance coverage for both the victims injured by the blast and the scores of businesses impacted by the bombings. 

Last week, Representative Bennie Thompson, a Democrat Congressman from Mississippi, introduced the Fostering Resilience to Terrorism Act of 2013, which would extend the Terrorism Risk Insurance Act by ten years. TRIA, which is set to expire at the end of 2014, was the subject of another proposed extension earlier this year but that proposal merely extended the program five years. 

The Supreme Judicial Court of Massachusetts recently held that where title insurers pursue litigation to cure defects to a title, they do not have a broad duty to defend any uncovered counterclaims against the insured. See GMAC Mortgage, LLC v. First American Title Ins. Co., No. SJC-11161 (Apr. 4, 2013). 

The Massachusetts Appeals Court recently held, in an unpublished decision, that an insurer breached its duty to defend a town against a suit filed by the sister of a man wrongly convicted for murder, in Waters v. Western World Insurance Company, No. 11-P-2124. A copy of the decision from the official Massachusetts reports website is available here

In a recent decision, the U.S. Court of Appeals for the First Circuit held that the doctrine of issue preclusion barred an insured from litigating the applicability of an insurance policy exclusion where an arbitration panel had previously addressed a related, but not identical, question of law. The case is Manganella v. Evanston Insurance Company, No. 12-1137. A copy of the decision is available here