Duty to Read Defense

While the vast majority of states hold that an insurance broker cannot be absolutely shielded from his negligence in procuring coverage to the extent the insured failed to read the policy, there are still a few states where the “duty to read” can provide an absolute defense.  One of those states is Mississippi.  In a recent decision issued by the U.S. District Court for the Northern District of Mississippi, this rule was applied in a decision dismissing the case from federal district court based on …

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Is There a Duty to Advise?

The Alabama Supreme Court recently issued what could turn out to be an important decision on the duty to advise. The court in Somnus Mattress Corp. v. Hilson, 2018 WL 6715777 (Ala. Sup. Ct. Dec. 21, 2018) affirmed a decision dismissing claims against an insurance agent for alleged negligence in failing to advise a mattress manufacturer to purchase business interruption loss coverage. While the plaintiff manufacturer argued that the agent should be held responsible for the uninsured loss he suffered following a fire that destroyed …

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Duty to Advise & Special Circumstances

The North Dakota Supreme Court recently affirmed the dismissal of a negligent failure to advise claim based on the failure to establish “special circumstances.” The decision is a nice win for insurance agents and brokers. 

In Dahms v. Nodak Mutual Ins. Co., 2018 WL 6380779(Sup. Ct., North Dakota, Dec. 6, 2018), plaintiffs were homeowners who had afire that destroyed their garage and an “elaborate deck” they had constructed on it.  While their homeowner’s policy provided coverage for the loss, the policy had separate limits …

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#MeToo & Securities Class Action Suits

There is a growing phenomenon of securities class action and shareholder derivative suits arising from the #MeToo movement. Specifically, these suits address the alleged failure of corporations to disclose in public filings and/or prevent sexual harassment by corporate officers and directors. Moreover, the suits allege a corporate culture permitting such conduct to be engaged in. The latest suit targets a well-known pizza chain.

In the most recent example of this continuing trend, on August 30, 2018 a federal securities class action lawsuit was filed in …

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Agent/Broker Developments: Take Note

Often, case-law relating to insurance agent/broker E&O typically involves the procurement of property/casualty insurance or the handling of property/casualty claims.  However, there have been some recent developments relating to the duties and responsibilities of life insurance agents/brokers that are important to note.

First, in an unpublished decision by the California Court of Appeal, Second District in Randle v. Farmers New World Life Insurance Co., LINK, the court considered the ongoing duties and responsibilities of an insurance broker to provide advice and guidance to …

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Case Study: Is a Broker a Fiduciary?

In a decision addressing the facts necessary to plead a breach of fiduciary duty claim against a broker, a California federal district court considered the difference between an “ordinary” broker-customer relationship, and one which rises to the level of a fiduciary relationship.

In Owner’s Management Co., the plaintiff (“Owner’s”) was an independent senior living property management company. Allegedly at the recommendation of its long-term broker, (“Broker”), Owner’s selected a self-funded employee healthcare benefit plan that was supposed to minimize Owner’s costs and potential exposures. …

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Break Time is Over

Today’s employees demand flexibility. In turn, many employers are moving towards a “results orientation” business model and getting away from the standard 9-5 schedule. In other words, the employer cares less about when employees get the work done, and only cares that the work gets done effectively. Employment laws are only beginning to catch up to this shift in work hours. Take for example the recent decision where the Third Circuit confirmed that the FLSA requires employers to compensate employees for breaks of 20 minutes …

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Lessons from Largest U.S. Tax Fraud in U.S. History

If you are in the world of finance, accounting or tax chances are you have probably heard of Sam Wyly and his late brother Charles Wyly.  In recent years, the business mogul brothers have been the hot topic of litigation as they battled with the IRS and SEC over alleged tax and securities fraud that may have spanned decades.  In the most recent decision to come out of the Wyly saga, Sam Wyly was ordered by a Dallas bankruptcy court to pay $1.1 billion in …

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Limitation on Liability Clause Not Enough to Protect Accountant

Here at PL Matters we have written on numerous occasions about the importance of an engagement letter.   The engagement letter is a critical tool for setting expectations and managing risks.  As we have said before a well drafted engagement letter can deter malpractice claims and in meritless suits it can be “Exhibit A” to a dispositive motion.  A case out of New York involving an accountant-client relationship demonstrates just that scenario.  Unfortunately in this case, however, the court found that the engagement letter did not …

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Drop Dead Deadlines – Impartial or Indiscriminate? 

The world of litigation is rife with deadlines.  Even a meritorious argument or strong case can be derailed by failure to timely file pleadings and motions.  This reality was illustrated in the recent case of Connolly v. 129 East 69th St. Corp.  In this slip and fall case, a defendant moved for summary judgment to dismiss plaintiff’s case, and the trial court granted the motion.  On appeal, however, the decision was reversed, as the court held the motion was filed one day after the motion …

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