Coverage Epidemic: COVID-19 And Insurance

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With effects of the Coronavirus pandemic already gripping the globe, and the resulting economic and business impacts of the virus, a follow – on epidemic of insurance litigation over whether COVID-related losses are insurable, covered events is certain to follow.  The first case, in fact, has already been filed.

In Cajun Conti LLC v. Certain Underwriters at Lloyd’s London, filed in the Civil District Court for the Parish of Orleans, Louisiana last week, a New Orleans restaurant seeks a declaratory judgment against Lloyd’s of London and the state of Louisiana that Lloyd’s owes business interruption coverage under an “all-risks” business insurance policy it issued to the restaurant for COVID-related business losses.

In the case, the insureds claim that there are no applicable exclusions in the policy relating to quarantine or pandemic, and therefore the all-risks policy written by Lloyd’s is answerable for the insured’s likely but as yet unproven losses caused by government-imposed shut downs or limitations in the operations of businesses, including limits on the number of persons permitted at a gathering.

Business Interruption Coverage

A key early legal issue which looms in that case is whether the virus or its consequences constitute a “direct physical loss,” which is a prerequisite for coverage under the standard and most Business Interruption coverage endorsements.  And while it is far from certain how the Court will rule at this point, the filing does portend what is sure to be an onslaught of coverage disputes in terms of both first party and third party claims, as well as special events coverage.

In the recently filed Louisiana case, the insured restaurant claims that the closing of its property was caused by direct physical loss caused by the virus.  This is likely to be the key battleground in the flood of business interruption claims which looms just beyond the horizon, i.e,, whether COVID-19 closures and limitations constitute insurable events arising out of “direct physical loss.”

In preparation for what is to come, insurers should scan their business policies for not just the precise terms of their Business Interruption endorsements, but also for potentially applicable exclusions such as exclusions for infectious disease, outbreaks, microorganisms and other epidemics. This is an available ISO exclusion.  However, even if such exclusions appear in the policies in question, it is also possible that state legislatures, and even Congress may at some point attempt to override and limit the applicability of such exclusions for COVID-19.  That is yet another battleground.

Third-Party Claims:  More Questions Than Answers

In addition to first party claims relating to business interruption, third party liability claims for illness and injury caused by businesses which fail to adequately safeguard against COVID-19 contamination are likely to blossom.  Insureds will undoubtedly tender such claims made against them  to their general liability insurers for defense and indemnity.  In turn, this will obligate insurers to undertake thorough policy and claims reviews, including examination of possible exclusions and limitations of coverage.

For example, are claims of mental or emotional distress for COVID-19 illness, apart from physical injury,  covered by the definition of “bodily injury” in CGL policies?  Does such a claim involve an “occurrence” as defined in the policy if the insured was already on notice of the need for precaution?  If so, how many occurrences have been triggered, or is it a single occurrence pursuant to continuous trigger provisions of the occurrence definition of the policy?  Or, stated another way, what did the insured know, and when did they know it, and does this knowledge mean the loss in question was not a fortuitous event which liability insurance is intended to address?

Going yet further, will CGL pollution, fungi, and bacterial exclusions provide a basis to deny defense and indemnity outright, or require defense under a reservation of rights?  Did the insureds timely provide notice of any such claims, or take any action in violation of the policies terms and conditions, including the duties in the event of a loss?

Given the high stakes, the use of best practices in thorough claims investigation will be a must in handling these types of claims.

Mass Cancellation of Public Events

While less common than business or CGL insurance, policies insuring against the cancellation of public events such as sporting events, concerts, and shows will also be implicated by the COVID-19 outbreak.

Careful examination of the coverage triggers and conditions and exclusions in such policies will be necessary, as will be a fact-intensive, case by case claims evaluation.  Some policies will contain communicable disease endorsements addressable to COVID-19 losses, but some may contain exclusions, and some very  recent policy issuances may even contain specific COVID-19 outbreak exclusions.  Decisions of local government and law enforcement entities which may have required event cancellation will have to be examined, as these declarations may implicate coverage under event cancellation insurance.

Looking Ahead

COVID-19 insurance coverage claims are in their infancy, but they are sure to multiply.  Insurers must make careful examination of the applicable policy language, and undertake painstaking claims evaluations, in order to comply with their duties of good faith and other statutory and regulatory obligations when processing COVID-19 claims.

To access our firm’s knowledge base of technical and legal research on COVID-19 insurance coverage claims,  or for copies of the Louisiana COVID-19 suit discussed in this post, reach me at chaddick@dmclaw.com or 717-731-4800.

 

 

Pa. Supreme Court Holds Household Exclusion Unenforceable In Auto Policy With Stacked UM/UIM Benefits

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Pittsburgh, Jan. 23 – The Pennsylvania Supreme Court has ruled that a household exclusion in an auto insurance policy was unenforceable because it impermissibly took stacked UM/UIM benefits away from the insured in violation of the Pa. Motor Vehicle Financial Responsibility Law (Pa.M.V.F.R.L.).

In Gallagher v. Geico Indem. Co., the Pa. Supreme Court reversed both trial court and the Pa. Superior Court’s grant of Summary Judgment to Geico, in a case where Geico sought to disallow $200,000 in stacked UM/UIM benefits in an automobile policy covering two vehicles  owned by the insured, Gallagher.  Gallagher also had a separate  motorcycle policy with UM/UIM  limits of $50,000.00, also issued by Geico.

Gallagher was injured in an August 12, 2012 motorcycle accident, and was paid by both the tortfeasor, and by Geico in the amount  of  $50,000.00  which was the UM/UIM limit under the motorcycle policy.  Gallagher sought the additional $200,000.00 in stacked UM/UIM coverage under the auto policy, but Geico denied that claim on the grounds that the auto policy contained a household vehicle exclusion, which provided:

“This coverage does not apply to bodily injury while occupying or from being struck by a vehicle owned or leased by you or a relative that is not insured for Underinsured Motorists Coverage under this policy.”

Gallagher filed suit against Geico, claiming that Geico placed Gallagher’s motorcycle and automobiles on separate policies, and that he paid for the stacked UM/UIM benefits under his auto policy.

Geico won summary judgment in the Westmoreland County Court of Common Pleas based on the exclusion, and the Superior Court affirmed.  On appeal to the state Supreme Court, however, the court, per Justice Baer, reversed in a 5-2 ruling, holding that the household exclusion violated section 1738(b) of the Pa.M.V.F.R.L., which requires that stacked UM/UIM benefits be waived in writing.  Justice Baer wrote that Gallagher did not waive stacking under his auto policy, and that he was entitled to those  benefits, thereby barring application of the household vehicle exclusion.  Of the exclusion, Justice Baer wrote:

“This policy provision, buried in an amendment, is inconsistent with the unambiguous requirements Section 1738 of the MVFRL under the facts of this case insomuch as it acts as a de facto waiver of stacked UIM coverage provided for in the MVFRL, despite the indisputable reality that Gallagher did not sign the statutorily-prescribed UIM coverage waiver form. Instead, Gallagher decided to purchase stacked UM/UIM coverage under both of his policies, and he paid GEICO premiums commensurate with that decision. He simply never chose to waive formally stacking as is plainly required by the MVFRL.”

The Court therefore reversed and remanded the Superior Court ruling, sending the case back to the trial court for further proceedings.

Justice Wecht filed a dissenting opinion, in which he criticized the majority for conflating the stacking waiver provisions of section 1738 with  the entirely  separate question operation of a policy exclusion, arguing that nothing in the Pa.M.V.F.R.L. precluded the valid operation of the household vehicle exclusion.  Justice Wecht also warned against the dangerous implication of the majority ruling, and the use of section 1738 to invalidate all UM/UIM exclusions, essentially allowing a waiver provision to trump the terms and conditions of the policy language.

Finally, Justice Wecht wrote that the majority decision violated earlier state Supreme Court precedent in Erie Exchange v. Baker, 601 Pa. 355, 972 A.2d 507, in which the Court made a clear distinction between the primacy of the nature, scope, and extent of UM/UIM coverage as set down in an insurance policy (and its limitations and exclusions), and the secondary consideration of whether coverage, if not otherwise limited or excluded,  should be stacked, unstacked or waived.

Gallagher v. Geico, 2019 Pa. LEXIS 345 (January 23, 2019, Baer, J.)

State Auto Had Reasonable Basis To Deny Pipe Burst Claim, Federal Court Rules; Contract and Bad Faith Claims Dismissed

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PITTSBURGH, Oct. 11 – A federal judge has ruled that State Auto Insurance Company was entitled to summary judgment on breach of contract and bad faith claims arising out of a water loss because the insureds violated a continuous occupation provision contained in their homeowners policy.

In Gerow v. State Auto, U.S. District Judge Kim Gibson found that State Auto was not liable to pay the water loss claim, and it could also therefore not be liable for acting in bad faith toward the insured plaintiffs in the case.  The case was originally filed in Pa. state court but removed to the U.S. District Court for the Western District of Pa.

On January 16, 2016, the Gerows suffered a pipe burst water loss at the insured premises, insured by State Auto.  State Auto denied the claim, however, pursuant to an investigation which determined that the house in question was not occupied at the time of the loss,  in violation of the terms of subject homeowners policy which required continuous occupancy.  After State Auto denied the claim, the insureds filed breach of contract and bad faith claims against the insurer.  After the case was removed to federal court, the parties filed cross motions for summary judgment as to both claims.

Judge Gibson found that the insureds did not meet the continuous residency  condition of the policy, and that State Auto had not waived the provision.  He therefore granted summary judgment on the coverage claim to State Auto.

The insureds argued they could still maintain a bad faith action against the insurer however, claiming that State Auto erroneously advised them to seek water remediation and then denied coverage, and failed to inform them that they were not complying with the residency requirement.

Judge Gibson dismissed these arguments, however, after employing the traditional Pennsylvania two part bad faith test — whether the insurer’s position lacked a reasonable basis, and whether it knew or recklessly disregarded the lack of basis.  Judge Gibson wrote that State Auto:

“clearly had a reasonable basis for denying coverage for the Subject Loss: the Policy required Plaintiffs to reside at the Subject Property, and Defendant concluded, after an investigation, that Plaintiffs did not reside there, a conclusion with which this Court agrees…[Therefore, State Auto] could not have known or recklessly disregarded a lack of reasonable basis.”

Judge Gibson also relied in part on a prior Western District ruling which precluded a bad faith claim from proceeding when a lack of coverage was found.

Gerow v. State Auto Prop. & Cas. Co., U. S. District Court Western District of Pennsylvania Case No. 3:17-cv-203, 2018 U.S. Dist. LEXIS 175007 (W.D. Pa. Oct. 11, 2018) (Gibson, J.)

Bad Faith Claims Against Individual Claims Adjuster Arising Out of UM/UIM Claim Dismissed By Federal Judge

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PHILADELPHIA, Aug. 9 –  A bad faith action against an individual claims adjuster has been dismissed by a U.S. District Court Judge, who found that the joinder of the adjuster  in a coverage and bad faith action arising out of a UM/UIM claim was done fraudulently to defeat federal removal jurisdiction.

In Reto v. Liberty Mutual Insurance, U.S. District Judge Timothy Savage denied Retos’ motion to remand the Retos’ case to state court after Liberty Mutual removed the case, contending that the joinder of Liberty Mutual adjuster Stephania DeRosa was fraudulent for the purposes of destroying federal diversity jurisdiction.

Judge Savage noted that Liberty met its burden in opposing the motion for remand:

“[the]removing party has a heavy burden of persuading a court that joinder is fraudulent….[however] the claims against [the claim representative] are wholly insubstantial and frivolous…there is no basis to support a contract [against the claims handler, and] only the principal [Liberty Mutual] may be held liable.”

Judge Savage ruled that the claim representative was only an agent, without a stand-alone contract with the insured.  Finally, the Court held that the Pa. Bad Faith Statute did not apply to claims representatives, but rather only to insurers.  Accordingly, Judge Savage dismissed Ms. DeRosa as a defendant, and denied the Retos’ motion to remand the case to state court.

Reto v. Liberty Mutual Insurance, U. S. District Court Eastern District of Pennsylvania, CIVIL ACTION NO. 18-2483, 2018 U.S. Dist. LEXIS 133336 (E.D. Pa. Aug., 8, 2018) (Savage, J.)

Third Circuit Continues To Rule Faulty Workmanship Not Covered By CGL Policy

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PHILADELPHIA, JUNE  6 – The Third Circuit U.S. Court of Appeals  has recently affirmed a ruling in favor of Selective Way Insurance Company, holding that Selective does not have a duty to defend or indemnify an insured contractor for claims of faulty workmanship arising out of a ondominium construction project. 

In Lenick Construction, Inc. v Selective Way Insurance Company, Lenick was impleaded as a third-party defendant in litigation as the general contractor, Westrum, for defects at the Villas at Packer Park Condominium project.   Lenick notified Selective after it was joined,  seeking defense and indemnity and, while denying the request for indemnity, Selective agreed to defend Lenick in the case under a reservation of rights. 

Lenick sued Selective in the Philadelphia Court of Common Pleas, seeking a declaratory judgment obligating Selective to provide defense and indemnity from Selective , after which Selective removed the action to federal court.  Thereafter, the parties filed cross motions for summary judgment. 

In affirming the US District Court’s conclusion that the allegations against Lenick were not covered by the CGL policy issued to Lenick by Selective, the Third Circuit relied upon Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 589 Pa. 317, 908 A.2d 888, 896-97 (Pa. 2006) and held that the claims in the Joinder Complaint against Lenick did not allege a fortuitous “occurrence” such that the claim would be covered.  In the Opinion written by Chief Judge Hardiman, the Court held that a fair reading of the Complaint against Lenick was that Lenick was guilty of faulty workmanship. 

While Lenick contended that some of the damage to its work occurred as a result of the faulty workmanship of other contractors such that an occurrence could be found, the Court disagreed, referring again to the underlying complaint against Lenick which alleged Lenick’s faulty workmanship, not that Lenick’s work was damaged by the faulty workmanship of others.  Summary judgment in favor of Selective was therefore affirmed.

Lenick Constr., Inc. v. Selective Way Ins. Co., 2018 U.S. App. LEXIS 15197, 2018 WL 2727394

 

 

CJ Haddick Guests On A.M. Best’s “Updates In Insurance and Bad Faith Podcast”

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A.M. Best has published the most recent episode of its Updates In Insurance Coverage and Bad Faith podcast earlier today, in which I discuss some recent developments in insurance coverage and bad faith law with the show’s host, John Czuba.  You can listen to the episode via the link below.

A transcript of the podcast can be found here:

PodcastTranscript-137PodcastTranscript-137

 

PRESS RELEASE: Haddick Featured Guest on National AM Best Insurance Podcast

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Contact:  Greta Kelly, Assoc. Marketing Director

Dickie, McCamey & Chilcote

412-392-5311

gkelly@dmclaw.com

 

Dickie McCamey Attorney Haddick is Featured Speaker on National Podcast

February 2018 (Harrisburg, PA) –  For Immediate Release – Dickie, McCamey & Chilcote, P.C. attorney Charles E. Haddick, Jr. will be the featured speaker on A.M. Best’s monthly podcast, which airs February 28, on the Legal Talk Network. Haddick’s episode will focus on recent national trends in bad faith insurance coverage law.

Mr. Haddick is a shareholder of Dickie, McCamey & Chilcote, P.C. and is the Location Chair of the Harrisburg office. He has practiced law for almost 30 years. He concentrates his practice in the areas of insurance coverage and insurance bad faith litigation; insurance fraud, arson, fire and explosion cases; cybersecurity and cyber insurance coverage and litigation; professional liability including insurance agency errors and omissions; subrogation; and general liability defense. Haddick is the author and editor of the legal insurance blog www.badfaithadvisor.com.

Mr. Haddick received his J.D. from The Dickinson School of Law of the Pennsylvania State University. He is AV Preeminent® Peer Review Rated by Martindale-Hubbell® and he is also listed in Best Lawyers in America® for Insurance Law.

The Insurance Law Podcast examines timely insurance issues from an attorney’s point of view and is published by Best’s Directory of Recommended Insurance Attorneys. Guest speakers are prominent attorneys from across the United States who specialize in insurance defense. To listen or subscribe to the Insurance Law Podcast, click here.

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About Dickie, McCamey & Chilcote, P.C.: Dickie, McCamey & Chilcote, P.C. is a nationally recognized law firm providing comprehensive legal expertise in a multitude of practice areas. Headquartered in Pittsburgh, Pennsylvania and founded more than 100 years ago, the firm serves industry-leading clients across the country from offices throughout the mid-Atlantic region in Delaware, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina and West Virginia, the Southwestern region in California, and the Rockies in Colorado. For more information: 800-243-5412 or www.dmclaw.com.

17 Locations | 10 States | 1 Firm

Professional Liability Insurer Off The Hook For Settlement After Insured Fails To Obtain Consent To Settle, Ninth Circuit Rules

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PASADENA, Jan. 19 – The Ninth Circuit Court of Appeals has ruled that a professional liability insurer had no obligation to fund a settlement agreed to by the insured, which did not obtain the insurer’s consent to the deal, as required in the policy.

In One West Bank, FSB v. Houston Casualty Co.,  Houston Casualty wrote a professional liability policy requiring the insured to seek prior written consent before resolving any covered claim by way of settlement.

The insured, One West, was sued for failure to properly administer loans it was servicing.  One West reached an agreement to settle with the plaintiff in the underlying case, but it neither sought or obtained  Houston Casualty’s written consent to the terms prior to executing the term sheet.  Applying California law, the 9th Circuit Court ruled that One West breached  prior written consent provision of the policy, thereby relieving Houston Casualty of its obligation to fund or cover the settlement.

In the ruling, while the Court recognized that an insured could be relieved of the consent obligation for  economic necessity, insurer breach, or other extraordinary circumstances, it affirmed the district court’s finding that no such circumstances existed.

Also, while One West alleged that Houston Casualty breached the insuring agreement and its common law obligation of good faith, the Court affirmed dismissal of those claims, ruling that there was no evidence that Houston Casualty withheld any benefits due under the policy, in light of the consent provision.

One West Bank, FSB v. Houston Casualty Co., 676 Fed.Appx. 664, 2017 WL 218900 (9th Cir., filed January 19, 2017).

Application Satisfies Requirement of Written Election of Lower UM/UIM Limits, Federal Court Finds

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HARRISBURG, Dec. 29 – A U.S. District Court magistrate judge has ruled that an original signed application was  a valid means of choosing UM/UIM limits lesser than bodily injury limits under Pennsylvania’s motor vehicle law, even if a separate option selection form was not compliant with the statute.

In Farmland Mut. Ins. Co. v. Sechrist, 2017 U.S. Dist. LEXIS 213618 (M.D. Pa., Dec. 29, 2017)(Arbuckle, M.J.), Plaintiff Farmland Mutual Insurance Company filed a declaratory judgment suit  against Defendants Edward Alfred Sechrist and Gary Bryant Kauffman, employees of Farmland’s insured, Clouse Trucking, seeking a  ruling that the commercial automobile insurance policy issued with a $1 million liability limit  provided $35,000 of combined single limit coverage for underinsured motorist claims arising out of an accident on April 30, 2013 in which both Sechrist and Bryant were seriously injured.

The Employees opposed Farmland Mutual, contending that the UIM limit should be equal to the policy’s bodily injury liability limit of $1 millon, on grounds that there was not a valid election of lesser UIM coverage pursuant to the Pa.M.V.F.R.L.  The employees claimed that the insurance policy should be reformed to include one million dollars of underinsured motorist coverage because the requirement of a signed writing choosing reduced UIM coverage  under 75 Pa.C.S.A. section 1734 was not met.

U.S. Magistrate Judge William I. Arbuckle first agreed with the employees that a specific UIM option selection form did not comply with section 1734 and was therefore not a valid election of lesser coverage:

Section 1734 of the MVFRL allows a named insured to elect limits of underinsured motorist coverage in an amount equal to or less than a policy’s liability limit for bodily injury. 75 Pa.C.S.A. section 1734.   Absent a signed, written election for lesser coverage, it is presumed that the underinsured motorist coverage limit is the same as the bodily injury liability coverage limit. . .

The Underinsured Motorist Coverage Selection form in this case. . .    is signed by Mr. Clouse but does not expressly designate the amount of coverage requested. Accordingly, we find that this form does not satisfy the requirements of  75 Pa.C.S.A. section 1734.

Judge Arbuckle went on to find, however, that the original insurance application prepared by an insurance agent, and signed by Mr. Clouse selecting the lesser amount of coverage, did meet the requirement of a signed writing under section 1734:

The parties dispute whether the Insurance Policy Application in this case satisfies the writing requirement of section 1734. . . Farmland contends that the Farmland Policy Application signed by Mr. Clouse is a valid written election of lower coverage under section 1734. By contrast, the Employees contend that the Farmland Policy Application does not satisfy the requirements of section 1734 because: (1) the Farmland Policy Application does not advise Clouse Trucking of Farmland’s obligation to offer underinsured Motorist coverage limits equal to the Farmland Policy’s limit for bodily injury; and (2) the Farmland Policy Application is not a clear indication of Clouse Trucking’s intent to purchase a underinsured motorist coverage below the Farmland Policy limit for bodily injury because the blanks in the Farmland Policy Application were filled in by an insurance agent.

As an initial matter, I find that Farmland is correct that the Farmland  Policy Application meets the requirements of section 1734. The Farmland Policy Application  is signed by Mr. Clouse, and does request a specific amount of underinsured motorist coverage.

In short, Judge Arbuckle found that the policy documents, including the application, constituted a valid written request for reduced UIM coverage.  He also found that whether or not an insurance agent completed the application itself  was irrelevant, provided, as here, that the insured certified via signature his review and adoption of the statements contained in the application.

Farmland Mut. Ins. Co. v. Sechrist, 2017 U.S. Dist. LEXIS 213618 (M.D. Pa., Dec. 29, 2017)(Arbuckle, M.J.)

Summary Judgment For Insurer In Super Storm Sandy Claim; Deposited Claim Check Constitutes Accord and Satisfaction

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PHILADELPHIA, Nov. 17 – The U.S. Third Circuit Court of Appeals has ruled that a day care center which submitted a Super Storm Sandy  claim for nearly a million dollars has accepted less than $30,000.00 from Philadelphia Indemnity Insurance Company in full satisfaction of the claim.

In Cranmer v. Harleysville Insurance Company et al,  2017 U.S. App. LEXIS 23187 *; 2017 WL 5513204, the owners of Tiny Tots day care center submitted a claim for storm damages to PIIC for $956,455.09 for income loss, business interruption, and other related claims.  PIIC valued the claims at $28,542.84.  Ultimately, counsel for PIIC sent counsel for the insureds a letter which stated:

Accordingly, should I not hear from you within ten (10) days of your receipt of this correspondence, I will instruct [PIIC] to tender settlement in an amount of $28,542.84 payable to Tiny Tots Daycare Preschool, LLC and [RLF], its attorney. We will deem the acceptance of this payment as full and final settlement of this claim as well as a release by your client of any further demand for recovery as against Philadelphia Insurance Companies.

The insured endorsed and deposited the check, which was marked “FINAL,” and the comment line stated: “Business Income, windstorm damage, loss of income from the date of loss through the period of restoration.”  PIIC’s counsel also sent a general release to the insureds, however, which was never signed and returned.

The Plaintiffs sued PIIC for breach of contract and bad faith, and PIIC moved for summary judgment, which was granted by the U.S. District Court for the Eastern District of Pa.  In affirming summary judgment in favor of the insurer, Judge Patty Schwartz held that the elements of an accord and satisfaction were met:

Under New Jersey law, the affirmative defense of accord and satisfaction requires the defendant to prove: “(a) a bona fide dispute as to the   amount owed; (b) a clear manifestation of intent by the debtor to the creditor that payment is in satisfaction of the disputed amount; and (c) acceptance of satisfaction by the creditor. . . The undisputed record shows that the first accord and satisfaction requirement of a bona fide dispute was satisfied because PIIC and Plaintiffs disagreed about the amount to which Plaintiffs were entitled under the insurance policy. Plaintiffs submitted Sandy-related claims to PIIC for $956,455.09 while PIIC valued Plaintiffs’ loss at $28,542.84. . .

There is also no genuine dispute that PIIC intended its $28,542.84 payment to satisfy all of Plaintiffs’ Sandy-related claims against PIIC, thus satisfying the second element of accord and satisfaction. The August 15, 2013 letter states that PIIC will “tender settlement in an amount of $28,542.84 payable to Tiny Tots Daycare Preschool, LLC and [RLF], its attorney” and “deem the acceptance of this payment as full and final settlement of this claim as well as a release by [Plaintiffs] of any further demand   for recovery as against [PIIC].” App. 341. One month later, PIIC’s counsel sent RLF a check for $28,542.84, with an accompanying letter that incorporated by reference PIIC’s August 15, 2013 letter and stated that the $28,542.84 payment was tendered “in good faith for the purposes of settlement.” App. 345-46. In  addition, the check contained a claim number matching the Sandy claim that Plaintiffs submitted to PIIC, was marked “FINAL” in the payment line, and the comment line stated “Business Income, windstorm damage, loss of income from the date of loss through the period of restoration.” . . . The combination of the letters and the check demonstrate that PIIC intended to make a payment in full satisfaction of the claim, and Plaintiffs have identified no evidence to the contrary.

The Court also ruled that the Plaintiffs failed to demonstrate any bona fide evidence of bad faith on the part of PIIC, and affirmed summary judgment in favor of PIIC on the bad faith claims as well.

Cranmer v. Harleysville Insurance Company et al,  2017 U.S. App. LEXIS 23187 *; 2017 WL 5513204