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Vol. 3, Iss. 15
November 5, 2014

South Carolina [First Impression]: Prejudice Required For Pretender Defense Costs

In a case of first impression, a South Carolina District Court, following a detailed analysis, concluded that the South Carolina Supreme Court would hold that, “absent a showing by the insurer of substantial prejudice caused by the insured’s late notice, an insurer who breached its duty to defend will be liable for reasonable costs of defense incurred both before and after notice.” Episcopal Church in South Carolina v. Church Insurance Company of Vermont, No. 13-2475 (D.S.C. Sept. 22, 2014) (“[A]n insurer’s duty to defend is triggered when the underlying claim is brought and thus pre-exists any obligation on the part of the insured as to notice or compliance with the voluntary payment provision of an insurance contract.”) (internal quotations omitted).

Texas Supreme Court Puts The Kibosh On Discovery Of Other Claim Files

Last week the Texas Supreme Court directed a trial court to vacate a discovery order, thereby precluding a claimant, in a property claim, from obtaining discovery of its insurer’s other claim files, in an effort to establish that the insurer had undervalued her own claim. While the claim at issue was for first party property, the decision reads as one just as relevant to a third-party liability claim. The court discussed why the discovery request was impermissible and perhaps also shed some light on how the discovery of other claim files could be had. See In re National Lloyds Insurance Company, No. 13-0761 (Tex. Oct. 31, 2014).

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