Recent Decision Provides Opportunity to Strengthen Bad Faith Defenses

By Christopher J. Tellner, Esq. of Kaufman Dolowich & Voluck, LLP

A recent trial court discovery opinion further enlarges what is discoverable in Pennsylvania coverage actions, especially those containing bad faith allegations. This decision reminds insurance carriers of a growing trend that increases the scope of discovery in insurance coverage litigation as well as the need to establish a factual record early on in claims investigation in order to defeat breach of contract and bad faith allegations. To view the decision, click here.

By Devin C. Maddox, Esq. of Tressler LLP

An insurer providing employment practices liability (EPL) coverage was entitled to summary judgment and a declaration it owed no coverage for a default judgment entered against its insured when the insurer first received notice of the claim almost two years after the claims made and reported policy expired. LeCuyer v. West Bend Mutual Insurance Company, 02-CV-12-7012 (Minn. Ct. App. July 14, 2014).

U.S. Supreme Court Issues Important Decision Affecting Fiduciaries of ESOPs

By Emily A. Hayes, of Wilson Elser Moskowitz Edelman & Dicker LLP

In a recent decision, Fifth Third Bankcorp v. Dudenhoeffer, 189 L.Ed. 2d 457 (2014), the U.S. Supreme Court vacated the "presumption of prudence" previously given to fiduciaries of employee-owned stock ownership plans (ESOPs) by many circuits, including the Second Circuit in In re Citigroup ERISA Litig., 662 F.3d 128 (2d Cir. 2011). In so doing, the Court held that ESOP fiduciaries are subject to the same presumption of prudence that applies to ERISA fiduciaries in general. However, the Court also set forth special considerations that apply to ESOP fiduciaries and that should be used by courts in determining whether a complaint states a claim when evaluating a motion to dismiss. As a result, the impact of the decision may not be as dramatic as it first appears.

California Supreme Court Finds that Architect has a Duty of Care that Extends to Future Purchasers of Condominiums

By Donald O'Brien, Esq. of Hinshaw & Culbertson LLP

Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP, Slip Opinion S208173 (July 3, 2014).