A federal judge has dismissed claims brought by a South Carolina insurance company against Texas-based insurance agency Highpoint Risk Services and its owner, Charles David Wood Jr. , according to a report published by Androvett Legal Media & Marketing.

That lawsuit sought more than $40 million in damages for an alleged shortfall in reinsurance collateral and claims relating to the issuance of various workers’ compensation policies. Last week, Senior U.S. District Judge Cameron McGowan Currie ruled that Companion Property and Casualty Insurance Co. was contractually barred from recovering any alleged shortfall from Wood, the report says.

In dismissing other claims against Highpoint and Wood for alleged breach of fiduciary duty and alleged violations of the South Carolina Unfair Trade Practices Act, the court found that “there is no evidence Highpoint (or Wood) owed or breached” a fiduciary duty to Companion in connection with the issuance of Companion’s workers’ compensation policies.

“The court has dismissed the core of the case brought by Companion,” said Michael Gardner, name partner at Dallas-based law firm Gardner Haas and counsel for Wood and the defendant companies. “An insurer cannot avoid the terms of its own policies and can’t complain when its agreements are given their clear and natural effect.”

Companion, purchased by Enstar Group in 2015, now operates as Sussex Insurance Company and remains headquartered in Columbia, S.C.

A federal judge has dismissed claims brought by a South Carolina insurance company against Texas-based insurance agency Highpoint Risk Services and its owner, Charles David Wood, Jr.

In 2014, Highpoint filed a lawsuit against Companion Property and Casualty Insurance Co. in Texas seeking reimbursement for more than $30 million in workers’ compensation claims payments, according to an article published by Androvett Legal Media and Marketing. Companion filed a countersuit in South Carolina against Highpoint and other companies owned by Wood. That lawsuit sought more than $40 million in damages for an alleged shortfall in reinsurance collateral and claims relating to the issuance of various workers’ compensation policies. Companion, purchased by Enstar Group Ltd. (NASDAQ: ESGR) in 2015, now operates as Sussex Insurance Company and remains headquartered in Columbia, S.C.

On Jan. 10, Senior U.S. District Judge Cameron McGowan Currie ruled that Companion was contractually barred from recovering any alleged shortfall from Wood. In dismissing other claims against Highpoint and Wood for alleged breach of fiduciary duty and alleged violations of the South Carolina Unfair Trade Practices Act, the court found that “there is no evidence Highpoint (or Wood) owed or breached” a fiduciary duty to Companion in connection with the issuance of Companion’s workers’ compensation policies.   

“The court has dismissed the core of the case brought by Companion,” said Eric Haas, name partner at Dallas-based law firm Gardner Haas and counsel for Wood and the defendant companies. “An insurer cannot avoid the terms of its own policies and can’t complain when its agreements are given their clear and natural effect. We look forward to successfully pursuing Highpoint’s claims against Companion at trial in the Texas action.”

The case is Companion Property and Casualty Insurance Company v. Charles David Wood Jr. et al., Case No. 3:14-cv-03719, in the U.S. District Court for the District of South Carolina.

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Veteran trial lawyer Jay Old has joined commercial litigation firm Hicks Thomas LLP where he will continue to represent construction, insurance, petrochemical and health care companies as part of his client portfolio.

Old’s addition will add offices in Austin and Beaumont. Old joined the firm effective Jan. 1.

“We are thrilled to be adding Jay and his team. He’s an exceptional lawyer with an outstanding track record,” said John B. Thomas, name partner and firm co-founder. “Many of us have known Jay for years, dating back to our days together at Andrews Kurth.”

Old’s clients include refineries, construction contractors, manufacturers, hospital systems and insurers. Joining him is labor and employment lawyer Jim Henges, along with four other lawyers from Old’s firm.

“I like to say I represent the job creators,” Old said. “I’m very excited to be joining the Hicks Thomas team, and hope to add to its reputation as a premier trial firm.”

Old is a frequent speaker at continuing education programs for lawyers across the country. He also is a former president of the Texas Association of Defense Counsel and has chaired the Construction Law Section of the State Bar of Texas.

He has defended national clients in statewide and regional mass tort litigation, in toxic torts, construction and product liability cases. He also successfully defended insurance companies in a series of high-profile trials involving hailstorm claims in Galveston and elsewhere.

Old is Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization and has been recognized on the Texas Super Lawyers list every year since 2005. A native of Beaumont, he is a graduate of Texas A&M University and the Texas Tech University School of Law.

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eSignLive by VASCO and Insurance Networking News will present a complimentary webinar on how updated regulatory laws are allowing companies to improve the process of buying insurance for consumers, while ensuring security, compliance and enforceability, on Dec. 13, beginning at 2 p.m. Eastern time.

Intended to improve the process of buying insurance for consumers, there have been recent updates to laws that allow insurance companies to post policies, forms, and endorsements on a website rather than printing these documents on paper.

As you look to take advantage of this new regulatory environment, questions related to how this can be done in a compliant way will arise.

Webcast highlights:

• E-Posting and E-Delivery defined
• Update from PCIAA on the progress of legislative adoption of e-posting laws
• The intersection between ESIGN, UETA and state insurance laws on e-signatures and records
• How to demonstrate insured consent to do business electronically
• Best practices for ensuring security, compliance and enforceability
• A live demonstration of insurance policy electronic posting

Register for the webinar.

Eduardo Espinosa, a member with law firm Dykema, has been appointed trustee for the Position Holders Trust as part of Life Partners Holdings Inc.’s Chapter 11 Plan of Reorganization, which was confirmed on Nov. 1, 2016.

In a news release, the firm said Life Partners, a life settlement provider, filed for Chapter 11 protection in 2015 in response to a $47 million jury verdict secured by the U.S. Securities and Exchange Commission (SEC). The company sold more than $1.3 billion of fractional interests in individuals’ life-insurance policies to more than 20,000 people. The estate includes 3,400 policies with more than $2.4 billion in face value; and more than 22,000 investors holding more than 100,000 positions in said policies. Thompson & Knight served as counsel to the bankruptcy trustee and Munsch Hardt Kopf & Harr, P.C., was counsel to the unsecured creditors committee.

Espinosa was appointed trustee to administer the bankrupt estate’s assets and the claims against them as part of the reorganization plan confirmed by Judge Nelms of the U.S. Bankruptcy Court for the Northern District of Texas. The plan also creates a Creditors Trust to pursue the estate’s claims against third parties and names AMJ Advisors LLC’s President Alan Jacobs as its trustee.
In addition to Espinosa, a former SEC enforcement attorney, the trust will be supported by Dykema members Michael Napoli, Mark Andrews, Aaron Kaufman and senior counsel Jeff Goldman.

“This has been a very difficult and contentious bankruptcy,” Espinosa said. “The Trustee has successfully collaborated with various stakeholders and they’ve collectively crafted a plan of reorganization that is designed to preserve flexibility and maximize value for Life Partners’ victims.”

The Plan of Reorganization is expected to be effective in early December.

Lack of precision in reinsurance contract wording has been known to engender anomalous results, points out Larry P. Schiffer in Squire Patton Boggs’ Insurance and Reinsurance Disputes Blog.

“Often a single word or phrase can cause a court or arbitrator to construe an agreement in ways unintended. In reinsurance arbitrations, when the panel majority decides how a contract operates based on its construction of a word or phrase, the losing party is likely stuck with that result even if a court might have construed the contract differently,” he writes.

He describes a recent case that illustrates his point that legalese and unnecessary words can cause a trier of fact to interpret a clause in a way that is unexpected.

Read the article.

In what it described as a case of first impression, the Northern District of California ruled that a professional liability policy that excluded the insured’s “assumption of liability obligations in a contract or agreement” did not extend to breach of warranty or false advertising claims arising out of a genetic data testing company’s marketing and sale of a personal genome service, reports Mary McCutcheon of Farella Braun + Martel LLP.

She writes in the article on the firm’s website that Ironshore Specialty Ins. Co. v. 23andMe, Inc. is noteworthy by the fact that the insurer challenged coverage on this ground.

“While this issue apparently has never been decided in the context of a professional liability policy, both case law and custom and practice recognize that the same phrase used in a general liability policy applies only to liabilities ‘assumed,’ i.e. created by, a contractual indemnity agreement,” according to McCutcheon.

Read the article.

New York State has proposed a new regulation that requires insurance companies, banks, and other financial services institutions regulated by the New York State Department of Financial Services (DFS) to establish and maintain a cybersecurity program designed to protect consumers and ensure the safety and soundness of New York State’s financial services industry, reports Jason O. Balogh, a partner with Hickey Smith LLP.

If enacted, this change would bring the first statewide regulation mandating that insurance companies, banks, and other financial institutions create such a program. The regulation would set forth fairly general minimum standards, Balogh explains in the article published on the firm’s website.

“Among other requirements, under the proposed regulation, insurance companies, banks, and other financial institutions would be required to set out detailed plans for handling data breaches, increase their monitoring of how third-party vendors handle and secure data, and appoint a chief information security officer. While many insurance companies, banks, and other financial institutions will find that elements of the proposed regulation are similar to those found in existing regulatory and technical guidance, they have not previously been required as a matter of law,” Balogh writes.

Read the article.

The International Association of Defense Counsel (IADC) has elected Andrew Kopon, Jr. president-elect for the 2016-2017 term. Beginning in July 2017, he will serve as president of the IADC, which is the preeminent, invitation-only, global legal organization for attorneys who represent corporate and insurance interests.

Kopon is a founding member of Kopon Airdo, LLC in Chicago. His practice focuses on complex civil litigation matters, including class actions, mass tort litigation and employment litigation. He has worked as national and regional counsel for major consumer and commercial product manufacturers and has successfully tried and argued cases before the Illinois Supreme Court.

In addition to his service to the IADC and its Foundation, Kopon is an active member of the Defense Research Institute, Illinois Association of Defense Trial Counsel, and National Foundation for Judicial Excellence. He is Martindale-Hubbell® AV Preeminent™ rated and has been recognized by Illinois Super Lawyers and Leading Lawyers Network for multiple years. He received his J.D. from The John Marshall Law School and B.A. from Providence College.

Founded in 1920, the IADC has approximately 2,500 members from six continents, more than 45 countries and all 50 U.S. states and includes corporate and insurance defense attorneys and insurance executives. The core purposes of the IADC are to enhance the development of skills, promote professionalism and facilitate camaraderie among its members and their clients, as well as the broader civil justice community. The IADC also takes a leadership role in many areas of legal reform and professional development.

Commercial construction projects necessarily involve many moving parts, including multiple parties from the owners to the construction managers to the project financiers to the contractors and to the sub-contractors, points out Larry P. Schiffer in Squire Patton Boggs’ Insurance and Reinsurance Disputes blog.

“These moving parts generally result in a web of interrelated insurance policies covering the project. Typically, when there is no controlled insurance program, contractors and sub-contractors are required to obtain liability insurance covering their potential negligence and very often are also required to add others, like the property owner or construction manager, as additional insureds onto those insurance policies,” Schiffer writes.

In his post, he discusses what a New York appellate court recently called an “additional insured by written contract” clause. The language of an additional insured clause may make all the difference as to whether a party is covered as an additional insured or not.

Read the article.

Commercial construction projects necessarily involve many moving parts, including multiple parties from the owners to the construction managers to the project financiers to the contractors and to the sub-contractors. Larry P. Schiffer of Squire Patton Boggs writes that these moving parts generally result in a web of interrelated insurance policies covering the project.

“Typically, when there is no controlled insurance program, contractors and sub-contractors are required to obtain liability insurance covering their potential negligence and very often are also required to add others, like the property owner or construction manager, as additional insureds onto those insurance policies,” he explains. “But not all additional insured clauses are the same. In this post, we discuss what a New York appellate court recently called an ‘additional insured by written contract’ clause. The language of an additional insured clause may make all the difference as to whether a party is covered as an additional insured or not.”

He concludes that the case demonstrates that New York courts will interpret insurance policies based on the plain meaning of the words used by the parties and will not alter the contracts for equitable reasons if the language is clear and unambiguous.

Read the article.

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In closely held businesses, it is common practice to provide for the succession of the business upon the death of an owner. More often than not, such succession planning involves the use of life insurance on the life of an owner, whether to fund a redemption of the deceased-owner’s interest in the company, to make up for lost revenues resulting from the owner’s death, or to achieve other economic results, writes Mitchell Goldberg of Berger & Singerman.

“Where the company is the owner and beneficiary of the life insurance policy, the company and its principals (i.e. shareholders, members, partners) need to be mindful that certain formalities under the Internal Revenue Code (the “Code”) must be followed to ensure that the death benefit proceeds are completely tax-free under the Code,” he explains.

“The Code generally excludes from gross income amounts received (whether in a single sum or otherwise) under a life insurance contract, if such amounts are paid by reason of the death of the insured. However, in the case of an employer-owned life insurance contract (i.e. a life insurance contract owned by a “person” engaged in a trade or business and under which such person is a beneficiary and that insures the life of an employee of such person on the date the contract is issued), unless certain requirements are satisfied, the amount excluded under the Code is limited to the aggregate amount of premiums and other related amounts paid by the employer.”

Read the article.

An insurer’s duty of good faith is pervasive and its application to claim handling has matured into a formidable body of law, write Douglas L. Christian and Nathan D. Meyer for Jaburg Wilk.

But when a bad faith lawsuit converts the quasi-fiduciary relationship with the policyholder into an adversarial one, how does a policyholder lawsuit affect the insurer’s duty of good faith? And, how does the insurer’s duty of good faith affect the lawsuit?

“Policyholders argue that if a lawsuit obviates the insurer’s duty it will encourage insurers to engage in conduct that will precipitate a lawsuit. Insurers respond by arguing that if the fiduciary duty continues unabated, it will encourage premature lawsuits by policyholders, deprive insurers of their ability to adjust losses, and eviscerate their rights as litigants,” according to the article.

The authors discuss   the development of the continuing duty of good faith, whether insurer litigation and post-filing conduct is admissible under current rules of evidence, and whether continuing bad faith is actionable as a separate theory of liability.

Read the article.

All contractors dread receiving the seemingly inescapable call that a preventable, yet too common, workplace accident occurred such as a crane collapse, the fall of an ironworker, or a delivery vehicle accident, writes James J. Buldas of Pietragallo Gordon Alfano Bosick & Raspanti LLP.

“Besides the human and project costs these accidents bring, claims and lawsuits nearly always follow,” he warns in his article. “While defending claims and lawsuits may cause even the most seasoned contractors to suffer from sleepless nights, responsible parties may take solace in knowing that their counsel negotiated defense and indemnity agreements in their contracts. Why then do such parties sometimes learn that because of the language in an insurance policy, the indemnity clause in the construction contract provides little or no protection?”

Because of unforeseen risk, additional insured endorsements have been revised to link contractual indemnity obligations to additional insured coverage. These new endorsements explicitly limit additional insured status to the indemnity clause of the underlying contract, regardless of whether the endorsement incorporates the “arising out of” or “caused, in whole or in part” language.

Read the article.

As the risk of cyber threats to all businesses grows, there is a corresponding interest in managing and shifting cyber risks by contract and through cyber insurance, write Branwen Buckley and Corby J. Baumann of Thompson Hine.

“Insurance requirements are common in commercial contracts, and many contracts now include a sub-clause regarding cyber insurance. Whether a company is asking for a contracting party to provide cyber insurance or is on the receiving end of such a request, there are some important background considerations to remember,” the authors explain in their article.

They list some issues to consider when evaluating contractual requirements for cyber coverage: cyber insurance can never be a substitute for proper preventive measures, keep cyber insurance provisions specific, consider asking to see the policy, and be realistic in your expectations.

Read the article.

If your job includes reviewing, drafting or negotiating contracts, you’ve probably seen  provisions relating to insurance, indemnification, and limitation of liability, writes Kenneth Gorenberg of Barnes & Thornburg LLP.

“Are they boilerplate that you spend little time on? Do you fully understand exactly what they do? Do you negotiate or revise them?” he asks.

“Fundamentally, the purpose of insurance, indemnification, and limitation clauses is to allocate risks,” Gorenberg explains. “In general, insurance transfers risk from the contracting parties to a third party—an insurance company. Indemnification usually transfers risk between the parties to the contract. Limitation of liability prevents or limits the transfer of risk between the parties.”

Read the article.

A Denver judge has fined one of the city’s prolific foreclosure attorneys $1.8 million for billing thousands of consumers facing the loss of their homes for title-insurance policies that did not exist, reports The Denver Post.

David Migoya writes that the Colorado Attorney General’s office argued in a seven-day trial in February had alleged in a February trial that Robert Hopp Jr., while working at his now-defunct law firm, billed customers fighting foreclosure for policies that were never issued. And Hopp inflated the cost of the few that were, the AG’s office claimed.

“The 37-page judgement handed down last week by Denver District Judge Shelley Gilman is the latest in a number of cases the state filed in 2013 against lawyers that specialized in foreclosures and allegedly padded their bills for costs that were ultimately borne by consumers losing their homes, the banks foreclosing on them and taxpayers whose federal insurance agencies covered the costs,” according to the report.

“Homeowners facing foreclosure had no choice but to pay the costs in order to stop the foreclosure process, and there was no process in place to challenge any of the fees lawyers said they were owed,” Migoya writes.

Read the article.

Barnes & Thornburg LLP announced today that David Wood, John Corbett and Joshua Rosenberg have joined the firm’s Litigation Department and Insurance Recovery and Counseling Practice Group. The trio arrives from Anderson Kill’s Ventura, California, office, where Wood served as co-managing shareholder.

Wood, a partner, and Rosenberg, an associate, reside in Barnes & Thornburg’s Los Angeles office, while Corbett, of counsel, is based in Dallas. They are the latest attorneys to join the firm’s growing litigation bench, which in the last three months has added Anthony Son and Lee Hutton in Minneapolis; Elizabeth Brandon in Dallas; Brett Pyrdek in Chicago; and Michael Battle in Washington, D.C.

Earlier this year, Barnes & Thornburg’s insurance recovery group was named an “Insurance Practice Group of the Year” by Law360 for its successful representation of clients in several noteworthy litigation matters. Members of Barnes & Thornburg’s Insurance Recovery and Counseling Practice Group have litigated against virtually all major insurance carriers in trial and appellate courts across the country.

“David, John and Josh have helped corporate and individual policyholders resolve insurance coverage disputes throughout the U.S. and will add to our deep bench of insurance recovery lawyers across the country,” said Charles Edwards, co-chair of the firm’s Insurance Recovery and Counseling Practice Group. “We welcome this high-caliber group who will vigorously advocate on behalf of clients facing risks with significant insurance implications.”

The firm’s release continues:

About the Attorneys

David Wood has more than 30 years of experience in high-profile insurance disputes and recovery litigation involving Fortune 1000 corporations and corporate directors and officers spanning many different industries, including financial services, healthcare, high tech, telecommunications, hospitality, construction, manufacturing and automotive. He represents publicly- and privately-owned corporations in enforcing their claims under professional errors and omissions, D&O liability, special risk and general liability policies, and fidelity bonds, among others. He also assists clients on insurance coverage matters concerning data breaches and other cybersecurity issues.

Wood is a frequent speaker and author on insurance policy enforcement topics and often serves as a subject matter expert for media regarding notable insurance cases and issues. Additionally, Wood is treasurer and a member of the board of directors of the Atlantic Legal Foundation based in New York. Closer to home, he is a director and past president of the Casa Pacifica Centers for Children & Families serving abused and neglected children. He is recognized as a leading practitioner in his field, including a peer rating of “AV Preeminent® by his peers as listed in Martindale-Hubbell®. In 2016, he was selected for the fourth time by his peers for recognition in Southern California Super Lawyers for Insurance Coverage.

Wood received his J.D. from the University of California, Hastings College of Law after graduating cum laude from Williams College. He is admitted to practice in state of California and before the U.S. Court of Appeals for the Ninth Circuit and the U.S. District Courts for the Central, Eastern, Northern and Southern Districts of California.

John Corbett represents corporate policyholders in a wide variety of industries ranging from construction and transportation to telecommunications and healthcare management. He has extensive experience in obtaining recoveries under general liability, cyber insurance,
director and officers (D&O) and professional errors and omissions (E&O) policies.

Corbett received his J.D., cum laude, from the Pepperdine University School of Law and his M.A. and B.A. from the University of California, Santa Barbara. He is admitted to practice in the states of California and Texas.

Joshua Rosenberg works exclusively with policyholders within his insurance recovery practice and concentrates on corporate and commercial litigation as well. Previously, he worked as a land use and planning legal consultant. Prior to that, Rosenberg was a judicial intern for Hon. Dana M. Sabraw in the U.S. District Court for the Southern District of California.

Rosenberg received his J.D. from the Pepperdine University School of Law and his B.A. from the University of California, Los Angeles. He is admitted to practice in the state of California and before the U.S. District Court for the Central District of California.

A.M. Best and Best’s Directories of Insurance Professionals will host a webinar to explore the legal and insurance issues surrounding lead injuries.

The one-hour complimentary event will begin at 2 p.m. EDT on Wednesday, August 3.

Lead was once used in a variety of construction materials, especially paint. Lead poisoning can be disastrous, if not deadly, the company says on its website. A panel of legal and insurance professionals will discuss the sources of lead injury claims, developing liability issues and the industry impact of lead-based claims.

Panelists include:

• Phil Pizzuto, partner; Lindabury, McCormick, Estabrook & Cooper, P.C.;
• Eileen Buholtz, attorney/firm member; Connors, Corcoran & Buholtz, PLLC;
• Brian Hinton, attorney; Anderson Crawley & Burke, pllc; and
• Ken Gillespie, litigation specialist; Builders Mutual Insurance Company.

Best’s Directories’ Managing Editor John Czuba will moderate the discussion.

Register for the webinar.

The U.S. Department of Justice has filed lawsuits to block the proposed mergers of four of the nation’s five biggest health insurers, reports The New York Times.

The proposed mergers involve Aetna and Humana, and Anthem and Cigna.

U.S. Attorney General Loretta E. Lynch said the proposed mergers “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”

“If these mergers were to take place, the competition among insurers that has pushed them to provide lower premiums, higher-quality care and better benefits would be eliminated,” she said.

“The companies responded by vowing, in varying degrees, to fight the government’s challenge,” report Leslie Picker and Reed Abelson. “Aetna, which had hoped to gain an advantage by being the first to reach a deal, aggressively defended its proposed merger, which it contended was different from the larger Anthem-Cigna deal that followed.”

Read the article.