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Jury Awards Insured $20 million in damages against its former insurance broker

In a verdict handed down on August 7, 2014, a jury sitting in the Southern Distirct of New York, returned a verdict against Alliant Insurance Services, Inc. in the amount of $20 million stemming from a Superstorm Sandy loss suffered by Cammeby's Management Company, LLC. In so finding, the jury concluded that the insured's broker improperly allowed the insured's flood coverage to be reduced from $30 million to $10 million without authorization from the insured. Cammeby's had brought suit against both its carrier and its broker once it learned that its property carrier, Affiliated FM Insurance Company, was refusing to pay an amounts in excess of $10 million, the limit that it claimed was in effect at the time of the loss. Affiliated maintained this position even though the last endorsement to the policy that it issued prior to Superstorm Sandy reflected that the flood sublimit had been raised to $30 million. Because Affiliated claimed that this endorsement was issued in error and that although at one point the sublimit had been issued a $30 million, the policy should be reformed to reflect the reduction in coverage that they were asked to obtain by the insured's broker, Alliant. This defense was submitted to the Court for determination at the end of the trial. The jury provided the Court with an advisory verdict siding with Affiliated but found that the insured's broker was liable for this shortfall due to its negligence in proceeding to obtain this reduction in coverage without authorization from the insured.Click here to read a copy of Judge Rakoff's Findings of Fact and Conclusions of Law.

The effects of Superstorm Sandy has put insurance in the forefront of people's minds once again. It has become clear that many insurance claims remain unresolved. As a result, in an unprecedented move, both the States of New York and New Jersey have instituted mediation programs for certain Sandy claims that have been denied or remain unresolved. While New York has limited this program to residential non-FEMA claims, the announcement out of the New Jersey Governor's Office indicates that its program, not yet codified will include non-FEMA commercial claims as well. Click here to see a copy of the New York regulations. You can also click here for a copy of the press release in connection with the New Jersey mediation program. Once this becomes codified we will post this on our website. In addition, as a public service, we have prepared a basic checklist that all policyholders can review in connection with claims that they may have. This checklist only covers the basics as it relates to claim presentations and is primarily geared to the homeowner who may be confronted with these insurance issues for the first time . Please click here to access this checklist. In addition, since preparing this checklist, FEMA has issued a Bulletin which suspends various Proof of Loss filing requirements for Superstorm Sandy claims that were referenced in the checklist. Click here to access a copy of that Bulletin. For more sophisticated business and homeowner claim issues, we are available for consultation.

Second Department affirms reformation of insured's policy and orders carrier to defend. Click here to read a copy of the Second Department's decision in Essex Ins. Co. v. Vickers.

Court rejects carrier's use of the "earth movement" exclusion to disclaim coverage as a result of dewatering activities at adjacent property. Click here to read a copy of the Court's decision.

Appellate Division rejects insured's claim against its public adjuster that public adjuster was not entitled to a fee because the claim was resolved by litigation and not by adjustment. Click here to read the Appellate Division's decision in PAB v. Seward Park.

Weg and Myers wins at the Court of Appeals. Reinstating a victory won at the Supreme Court level, the Court of Appeals, adopting the position advocated by Weg and Myers in its entirety, ruled that violation of New York City Administrative Code Sec. 27-1031(b)(1) imposes absolute liability on a defendante whose excavation work caused damage to an adjacent property. While the violation of an Administrative Code violation usually does not impose absolute liability on the violator, the Court ruled that because a historical analysis of the section in question revealed that it had its origins in State law, the imposition of absolute liability was appropriate. Click here to read the Court's decision in Yemen v. 281 Broadway Holdings, et al.

Appellate Division affirms decision allowing plaintiffs to pursue punitive damage claims against various contractor defendants. Click here to read the Court's decision in 11 Essex v. Tower Insurance Company et al.

Court compels Subcontractor's Carrier to Defend Contractor. Issue of whether subcontractor's activities took place while working at job site is an issue yet to be decided but is not a basis to deny defense coverage to contractor. Click here to read the Court's decision.

Southern District Court holds that a carrier cannot compel an insured to submit to an appraisal when coverage issues still must be resolved. Read the attached decision.


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Weg & Myers

Representing Insured for 40 Years

The law Offices of Weg and Myers extends our sympathy to those who have suffered property damage as a result of Superstorm Sandy.

As events unfold throughout the country, Weg and Myers, P.C. is called upon to represent policyholder interests. Most recently Weg and Myers has represented policyholders in numerous cases involving the aftermath of the destruction of the World Trade Center, the devastation caused by Hurricane Katrina and the scandal engineered by Bernard Madoff. Currently, we are consulting with many policyholders as to coverage issues stemming from Superstorm Sandy. For your convenience and edification, attached is the Governor's executive order negating the use of Hurricane Deductibles as well as the Order requiring carrier acceptance of an insured's proof of damages. In addition FEMA has recently issued a Bulletin whihc has the effect of removing some of the conditions relating to the filing of Proofs of Loss in connection with Federal Flood claims associated with Superstorm Sandy. Please click here to read this very important Bulletin.

Finally, as the claim adjustment process begins to proceed, policyholders in New York should be aware of the insurance regulations applicable to prompt, fair and equitable settlement practice. Specifically pursuant to 11 NYCRR 216.6(e) an insurance carrier is required to immediatly make payments with respect to undisputed amounts owed and not use a dispute as to the total amount of loss as a basis to delay the undisputed amount. Click here to view a copy of this insurance regulation. The Governor has also amended 11 NYCRR 216.5 on an emergency basis requiring carriers to commence an investigation of a claim within 15 days of receiving that claim and, perhaps even more importantly, for Superstorm Sandy claims filed in New York, give the insured notice of all items, statements or forms that the carrier requires an insured to complete, within six days of the carrier's receiving notice of the claim. Click here to see a copy of 11 NYCRR 216.5 in its amended form.

Led by its three long time partners, Dennis T. Dantonio, Joshua L. Mallin, William H. Parash, Weg and Myers has been engaged for more than 40 years in the practice of insurance coverage litigation, representing policyholders from homeowners to Fortune 500 corporations in suits against insurance companies on questions involving policy coverage.

In addition to its insurance coverage practice, Weg and Myers litigation practice has expanded to include the representation of commercial property owners in suits against third parties who are responsible for causing damage to its real property, the representation of public adjusters and insurance brokers in suits against insurance companies and the prosecution of claims against insurance brokers in cases where their negligence has caused or contributed to coverage issues in connection with a policyholder's claim.

Although Weg and Myers, P.C. primarily represents its clients in courts in the Tri-State Area, the firm continues to be retained to handle insurance related matters in California, Florida, Georgia, Maryland, Minnesota, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, the U.S. Virgin Islands, Vermont, and Virginia, as well as in England, Italy, Panama and Thailand.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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