New York Developments

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In National Union Fire Ins. Co. of Pittsburgh, Pa. v. Clearwater Ins. Co., 04-CV-5023 (S.D.N.Y., July 21, 2007), the Southern District of New York denied a cedent’s motion for summary judgment based on the follow the fortunes doctrine, finding that a material issue of fact existed as to whether a portion of a settlement involved payment for consequential damages claims that would be excluded under the reinsurance certificate at issue. 

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Read More Southern District of New York Denies Summary Judgment to Cedent in Case Involving 3M Settlement

On July 23, 2007, The Hartford Financial Services Group, Inc. announced settlements of recent investigations for a total of $115 million in restitution and penalties.  Specifically, the Company entered into a settlement with the New York Attorney General’s Office relating to an investigation of variable annuity market timing issues. 

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Read More The Hartford Announces Settlement of Recent Investigations

In Jurupa Valley Spectrum, LLC v. National Indem. Co., et al., 06 Civ. 4023 (S.D.N.Y., June 29, 2007), the Southern District of New York examined whether a beneficiary of surety bonds had standing to bring a cause of action for bond payments against the reinsurer of a bond issuer. 

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Read More Beneficiary of Surety Bond Lacks Standing to Assert a Direct Action Against Reinsurer

On July 17, 2007, New York Attorney General (“NYAG”) Andrew M. Cuomo filed suit against the ExxonMobil Corporation and ExxonMobil Refining and Supply Company “to force the cleanup of a 17-million-gallon oil spill in Greenpoint, Brooklyn, and to restore Newtown Creek, the contaminated waterway separating Queens from Brooklyn.”  

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Read More NYAG Sues ExxonMobil over Alleged 17-million-gallon Oil Spill in New York City

On June 12, 2007, a New York appellate court reversed a lower court’s decision and held that a reinsurer was not required to follow the fortunes of a cedent’s loss allocation on a single occurrence “per site” basis, finding that such allocation, which allowed the cedent to exceed the facultative reinsurance contract’s $1 million per-occurrence deductible with respect to certain sites, was unreasonable. 

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Read More Reinsurer Not Obligated to Follow Cedent’s Settlement Allocation

New York’s highest court recently considered whether, within the context of a CGL policy, liability must be determined before an additional named insured is entitled to a defense in an underlying personal injury action.  Affirming the decision below, the New York Court of Appeals held that additional insured coverage is not contingent upon a liability finding, and that the obligation of an insurer to provide a defense to an additional named insured under the policy exists “to the same extent as it does to a named insured.” 

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Read More Duty to Defend Additional Insured

New York’s highest court recently considered whether a plaintiff and defendant who enter into a high-low agreement in a multi-defendant action (frequently referred to as a “Mary Carter Agreement”) must disclose the terms of that agreement to the court and the remaining parties.  While these agreements are used routinely, with and without disclosure to all parties, this appears to have been an issue of first impression in NY. 

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Read More Non-Agreeing Defendants Must be Told of High-Low Mary Carter Agreements with Plaintiff or Risk Reversal