The first was regarding a February 15 ruling in which a Pennsylvania federal court held in an insurance dispute that claims over defective Chinese drywall arose out of a single incidence. In the decision, U.S. District Judge Gene Pratter sided with Cincinnati Insurance Co., ruling that underlying drywall claims stemmed only from one occurrence, a shipment of allegedly defective drywall from China.
Jonathan noted to Law360 that the ruling could impact the way policyholders will face drywall claims, if other judges similarly analyze the occurrence issue: “It’s not really binding on any other court, but it’s helpful. If there’s a case that has a strong nexus to Pennsylvania, if you’re the counsel for the insurer, this is a case you’re going to point to.”
Jonathan added that the eventual impact will depend on which jurisdiction the court is in.
“A lot of times, the battle at the beginning of these types of cases is over what law is going to apply,” he said.
(Jonathan and Goldberg Segalla’s Richard J. Ahn co-authored an article on the ruling titled “Number of Occurrences Limited to Just One in Pennsylvania Defective Drywall Litigation” for the firm’s Insurance & Reinsurance Report blog.)
Jonathan was also interviewed for a Law360 article published on February 25 about a proposed New Jersey Legislature bill that would expressly allow policyholders to sue insurance companies for bad faith in resolving claims. The article noted that this is “a move opponents argue will create a wave of insurance litigation in the state and raise premiums across the board.”
He told Law360 that if the bill becomes law, it will have an effect on how the court tackles bad faith claims.
“It’s not a radical departure from what we have now, but to be sure, there will be an argument made as to how it’s different, and why it’s different, and how it lowers the bar,” Jonathan explained. “Those are arguments that the plaintiffs bar will make, and that’s what the courts are going to have to sort out.”
(The bill was tabled in the week following the Law360 article.)
“Ruling Enlightens Insurers On How To Count Drywall Events,” Law 360, February 22, 2013 (subscription required)
“NJ Bad Faith Bill Would Hurt Insurance Market, Critics Say,” Law360, February 28, 2013 (subscription required)