Topic: New York Developments

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

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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Reinsurer Not Obligated to Follow Cedent’s Settlement Allocation

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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Duty to Defend Additional Insured

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

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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Defective Products Claims Against ExxonMobil Deemed Multiple “Occurrences” Under New York Law

On June 5, 2007, a New York State Court located in Manhattan ruled that various products liability claims relating to ExxonMobil Corporation’s defective resin and lubricant products were multiple “occurrences” under liability insurance policies issued to ExxonMobil by Lloyd’s of London. 

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