All of us at Anderson Kill wish you a happy and prosperous 2020. As the New Year turns, we provide a review of major trends and events in property-casualty insurance. We’ll also review some insurance recovery news and events that took place during Anderson Kill’s 50th Anniversary year.
Kinder, Gentler Corporation.... Corporate governance principles straddling generations changed markedly in 2019. Since the 1970s corporations followed by economist Milton Friedman’s axiom that “there is one and only one social responsibility of business…to increase its profits so long as it stays within the rules of the game.” In August 2019 the Business Roundtable’s Statement of the Purpose of a Corporation, signed by 181 member CEOs, eschews such a sole focus on the shorter-term interests of shareholders in favor of “a fundamental commitment to all of our stakeholders,” specified as employees, suppliers, communities and shareholders. The impact on law, liability and insurance is developing.
New York reaffirms availability of attorney’s fees.... As has been true under the Mighty Midgets case, New York permits the recovery of attorney’s fees in certain insurance recovery cases. The New York Appellate Division, First Department, reaffirmed on December 5, 2019, that a delay in payment of an insurance claim may give rise to a claim for attorney’s fees as a consequential damage resulting from the breach of the insurance policy. Certain Underwriters at Lloyd’s London, et al. v. Bioenergy Development Group LLC, No. 10505 655 792/17 (App. Div. First Dep’t). Anderson Kill attorneys Robert Horkovich, Dennis Artese, Vivian Michael and Kanishka Agarwala obtained this result.
Private Equity increased its impact on insurance.... In a continuing trend, insurance agencies and brokers were increasingly targets of PE firm acquisition efforts. Reports indicate that the increased demand has increased sales prices of agencies and brokers.On the claims side, increased insistence on proper payment of claims made by PE firms both for liability insurance coverage and insurance for corporate acquisitions fueled claims activity.
Delaware Supreme Court on “securities claim”.... despite other cases reaching opposite results, the court interpreted “securities claim” unfavorably for Verizon in a case against AIG, Zurich and U.S. Specialty. Given past claims behavior by the insurance industry we might expect them to attempt improperly to expand the scope of this narrow result.
A hard insurance market?.... for the first time in many years, a genuinely “hard market” for insurance developed. Willis Towers Watson reported some double-digit increases in premiums in property-casualty lines. On the other hand, Fitch Ratings predicted that competitive forces would temper price increases. Fitch also observed that the industry realized an underwriting profit in four of the last six years.
Policyholder wins: In 2019 Anderson Kill helped clients obtain court judgments and settlements yielding tens of millions of dollars in insurance coverage. A few highlights:
Long-tail defense cost coverage and attorney’s fees: A New York appeals court reaffirmed that an insurance company must defend a governmental transportation authority against asbestos claims dating to a major 1970s construction project without pro-rating defense costs — and, in the wake of a years-long court battle, pay the policyholder’s attorney’s fees. The appellate court also upheld a judgment that claims are covered if the injury was triggered during the policy period, regardless of when it manifested itself. Robert Horkovich, Raymond Mascia and Vivian Michael obtained this result.
Duty to defend: AK obtained a favorable resolution in February 2019 for a pharmaceutical company after the insurance company filed a declaratory judgment suit seeking to avoid coverage for an underlying tort action alleging injury from the policyholder’s product. The matter involved the scope of the duty to defend, as well as a number of policy exclusions that may be found in similar policies. Raymond Mascia and I represented the policyholder in this case.
Clawback checked: An insurance company that defended a consultancy against a malpractice claim later sought to claw back the advanced defense costs based on the narrowest possible reading of its policy. This spring a state appeals court affirmed the trial court’s summary judgment in favor of the policyholder, defeating the insurance company’s late notice defense. Finley Harckham, Steven Pudell and Nicholas Maxwell achieved this result.
All sums: In a ruling in favor of a mining company’s asbestos trust, a state appellate court upheld a referee’s adoption of all sums allocation consistent with state law, enabling the policyholder to tap any policy year in effect during the period of injury up to its full limits to cover its total loss. Rhonda Orin, Michele Gallagher, Stephen Palley, Daniel Healy and Jeffrey Glen represented the trust in this case.
Exhaustion defense exhausted: A municipal port won summary judgment to the effect that there are no overall aggregate limits in its insurance policies responding to claims for coverage of environmental cleanup obligations arising from claims and suits. Final judgment was entered this past March. Robert Horkovich and Raymond Mascia achieved this result.
Kudos: In our 50th anniversary year, we were proud to win a trifecta of awards from leading legal and insurance publications.
For the thirteenth consecutive year, Chambers USA ranked Anderson Kill among the nation’s top insurance recovery practice groups. The firm’s New York office was also recognized for insurance dispute resolution, and its New Jersey office for insurance litigation. Chambers recognized individual AK attorneys Robert Horkovich, Finley Harckham, Rhonda Orin, Robert Chesler, Steven Pudell and yours truly. For the seventh year straight, Best Lawyers named us a National Tier 1 Best Law Firm in Insurance Law, also recognizing Bob, myself, Marshall Gilinsky, Rhonda Orin, Daniel Healy, Stephen Palley, David Elkind, Pamela Hans, Robert Chesler and Steven Pudell as Best Lawyers. Benchmark Litigation ranked Anderson Kill a National Tier 1 firm in Insurance Litigation for the sixth year running, deeming Robert Horkovich, Finley Harckham and myself national litigation stars and Josh Gold a future star, while placing Carrie Maylor DiCanio on the 40 & Under Hotlist for the second year running.
Welcomes and farewells: In February, we were pleased to welcome master insurance recovery litigator Nicholas Insua back to Anderson Kill, where he’s practicing in the firm’s Newark, NJ, office. In August, we were lucky to bring on Robert Cornish, a securities attorney who represents innovators in finance and high tech, including blockchain pioneers, as a partner practicing in D.C. In New York, we welcomed Ruth Ann Stauffer into our Trusts and Estates practice on an of-counsel basis, while Ian Bain and Maria Brinkmann came aboard as attorneys and Wendy Chiapaikeo as a clerk, all concentrating in insurance recovery.
In 2019 we bid warm professional farewells to retiring attorneys Linda Gerstel, Costa Kensington and Dennis Zagroba. Finally, just this month we mourned the passing of our esteemed colleague of nearly three decades, John H. Doyle III, a hero of the civil rights movement of the 1960s, alumnus of Robert Morgenthau’s U.S. Attorney’s Office for the SDNY, and Anderson Kill litigator and white collar defense attorney.
Forward to 2020: We look forward to the coming year as we continue to press the risk and insurance world to pursue your goals for 2020.
Very truly yours,
William G. Passannante
1251 Avenue of the Americas
New York, NY 10020