RECENT DEVELOPMENTS IN PROPERTY INSURANCE LAW

• Published in: Tort trial & insurance practice law journal 2015-01, Vol.50 (2), p.579-610
• Main Authors: Levin, Jay M., Lewis, William R., Muller, Kellyn J. W., Raschke, Heidi H., Angelucci, Lauren A., Benson, Leigh Ann, Brooks, Letoyia C., Caiafa, Meredith Whigham, Corcoran, Kelly M., Crawford, Anthony B., Garaffa, John V., Jacobson, Craig A., Jannuzzi, Miranda A., MacBride, Jonathan R., McAloon, Sean F., Phillips, Christina M., Stracener, Stacey, Sturm, Kyle A.
• Format: Article
• Language: English
• Subjects: Arbitration; Bad faith; Insurance claims; Insurance companies; Insurance coverage; Mediation; National security; Property damage; State court decisions; Trials
• ISSN: 1543-3234; 1943-118X

Once expedited discovery is complete, the parties must submit either a notice of arbitration pursuant to local rule 83.7 or a stipulation consenting to mediation within fourteen days of when discovery is complete.6 Cases that cannot be resolved through arbitration, mediation, or settlement are then assigned for trial/ In March 2014, the court issued a supplemental order setting a protocol to resolve the commonly occurring issue of insureds submitting proofs of loss and supporting documentation that failed to comply with the requirements set forth under the NFIP by the Federal Emergency Management Agency (FEMA).8 Separately, the insurers asked the court to consider potential fraud in the property damage estimates received to date, citing "improbable similarities in the damages reported" in more than 500 cases.9 The court authorized a sample of thirty site inspections to explore this issue.10 An April 2014 order also addressed the implementation of the mandatory mediation/arbitration effort with the consolidated cases nearing the end of discovery.* 11 The court directed that twenty cases be selected by liaison counsel to engage in mediation before the broader deadline to identify common issues for the court's consideration in the alternative dispute resolution process that was to follow.12 In June 2014, the court issued an order addressing cases that had pled bad faith claims against insurers, but had failed to submit a letter explaining the basis of those claims as directed by the case management order.13 The court dismissed bad faith claims, as well as any related requests for punitive damages and attorney fees, in more than 150 cases.14 B. Satisfying NFIP Conditions In Kroll v. Johnsonfs the parties disagreed over the trigger date for the NFIP statute of limitations. Specifically, the court considered whether the insurer allegedly failed to consider "before and after" evidence of the condition of the home.315 In reversing, the supreme court emphasized that, since the trial court had already determined that a legitimate reason for denying the claim existed, the insured could not prove the "conditional" element of "abnormal" bad faith.316 The court distinguished its prior decision in Jones v. Alfa Mutual Insurance Co.,317 where a bad faith failure to investigate a claim was permitted to go forward in spite of summary judgment on the failure to pay the claim.