Introduction: Insurance Coverage “Top 10” Takes Different Tack
For the 22nd annual insurance coverage “Top 10,” I tried something different.
As I explain every year, the most important consideration, for selecting a case as one of the year’s ten most significant, is its potential ability to influence other courts nationally.*
That being said, the most common reason why many unquestionably important decisions are not selected is because other states do not want for guidance on the issue, or the decision is tied to something unique about the state. Therefore, a decision that may be hugely important for its own state – indeed, it may even be themost important coverage decision of the year for that state – will be passed over, as one of the year’s ten most significant, because it has little chance of being called upon for guidance by other states at a later time. In other words, a state with its own case law on an issue is unlikely to turn to the decision of another state for direction.
But 2022’s insurance coverage Top 10 list is different. Three of the coverage decisions are precisely the type that, for this reason, would easily be eschewed as one of the year’s ten most significant. Not to mention that a fourth one on the list isn’t a judicial decision, but, rather, the decision of a legislature to enact a law.
Specifically, the Texas Supreme Court’s decision in Monroe Guaranty Insurance Company v. BITCO General Insurance Company involves the rules for determining an insurer’s duty to defend - “eight corners” vs. extrinsic evidence. Pretty much every other state in the country has a large body of case law for courts to turn to when addressing such issue. So there is no reason whatsoever why any other courts would look to Monroe when addressing an insurer’s duty to defend. Nonetheless, I included it here because it is from a state with a significance amount of coverage litigation, application of duty to defend rules arise with great frequency and are relevant to all manner of liability policies and, most importantly, the duty to defend issue in Texas has long wanted for high court clarification. To prove this point, in less than a year, Monroe has had a significant impact on numerous Texas decisions.
Two other decisions, that also have virtually no chance whatsoever of being looked-to for guidance by other courts nationally, also made the list: the Mississippi Supreme Court’s decision in Miss. Farm Bureau Cas. Co. v. Powell and the Kentucky Supreme Court’s decision in Robinson v. Thomas.
However, Powell and Robinson were selected because they offer valuable lessons for insurers. But, more to the point, these are lessons tied to significant issues – drafting policy language and reading an insurance policy. For this reason, I had little trouble making an exception to the section process to include them.
As for that legislative decision, California enacted a statute that sets out procedures for plaintiff’s attorneys making time-limited settlement demands within a defendant-insured’s limits of liability. Simply put, the statute is designed to make it more difficult for plaintiff’s attorneys to set-up insurers for bad faith.
The “Ten Most Significant Coverage Decisions of the Year” are listed in the order decided.
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*As for the selection process, to identify decisions that have the potential ability to influence other courts nationally, it works like this. These are coverage decisions (usually, but not always, from state high courts) that (i) involve a frequently occurring claim scenario that has not been the subject of many, or clear-cut, decisions; (ii) alter a previously held view on an issue; (iii) are part of a new trend; (iv) involve a burgeoning or novel issue; or (v) provide a novel policy interpretation. Some of these criteria overlap. Admittedly, there is also an element of “I know one when I see one” in the process. In addition, cases that meet the selection criteria are usually (but not always) not included when the decision is appealed. In such situation, the ultimate significance of the case is up in the air |