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Vol. 7, Iss. 6
July 18, 2018

WSJ: Insuring The World Cup
A July 5th article in The Wall Street Journal looked at numerous insurance aspects surrounding the World Cup. The court noted that Allianz lost a financial “bonanza” when it declined the opportunity to insure sales promotions or prizes that would be paid if defending champion Germany won the tournament. The German insurer passed as it believed that there was a high likelihood that its home team would repeat as winner. But Germany did a quick auf wiedersehen, getting knocked out in the group play. However, Allianz did score when it insured against a victory by Poland. Bold move. The article looks at a host of World Cup risks that are insured, such as cancellation, terrorism, cyber attacks, player injuries and transportation of tournament-themed merchandise.

Florida Federal Judge Gets In A Grove With Puns
This clever judicial prose from Judge Steven Merryday, of the District Court for the Middle District of Florida, in Travelers Indem. Co. v. Richard McKenzie & Sons, Inc., 17-2106 (M.D. Fla. June 28, 2018): “Citrus-grove owner Richard Hermanns attempts to squeeze $2.965 million from Travelers Indemnity Company based on Hermanns’s consent judgment against Richard McKenzie, the former manager of Hermanns’s grove and a former insured under a Travelers Commercial General Liability (CGL) policy with a ‘farm care-taker liability’ endorsement. . . . Hermanns’s effort to concentrate on the endorsement yields no fruit: The insurance policy excludes coverage, the consent judgment is unreasonable, and the insurer owed no duty to defend.”

Court Upholds Australia Forum Selection Clause (Policy Issued In California)
“Plaintiffs do not contend that the forum selection clause is the product of fraud or overreaching, but instead argue that it should not be enforced because it would contravene California’s strong public policies expressed in California Insurance Code sections 678.1 and 11580, and because Australia is not an adequate or convenient forum. Liberty responds that enforcement of the clause does not contravene any public policy with respect to venue and that plaintiffs are free to litigate their claim in Australia. . . . The public policy expressed in this section [Section 11580] is that plaintiffs have an avenue for relief, but not specifically one in California. As Liberty notes, Australian law has a similar provision that provides plaintiffs with the same ability to bring such an action. See Rep. at 11 (citing Civil Liability (Third Party Claims Against Insurers) Act 2018 (NSW) (Aust.). . . . While I am sympathetic to plaintiffs’ desire to litigate in California, I am bound by the precedent requiring enforcement of the forum selection clause in this action.” Lewis v. Liberty Mut. Ins. Co., 18-01138 (N.D. Cal. May 29, 2018).

Wow! Insurer Makes A Very Bold Argument
Look, I get it. It is a lawyer’s job to be a zealous advocate for his or her client. But sometimes lawyers make arguments that seem to take that too far. For a lawyer representing an insurer in a coverage case, that may apply to this argument: “At the hearing, American Family suggested that that if the term ‘loading’ can reasonably be understood to refer to both interpretations, American Family should get the benefit of both and exclude coverage for injuries that occur while someone is placing items in the boat and those which occur while placing the boat onto something else. But the law does not allow this ‘heads I win, tails you lose’ analysis. . . . American Family’s argument is not supported by Minnesota law, the term is ambiguous, and that ambiguity must be construed against the insurer.” Am. Family Mut. Ins. Co. v. Pilarski, No. 17-04463 (D. Minn. June 28, 2018).

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