... Will It Now Eliminate Also a Pending Claim Under the North Carolina Unfair and Deceptive Trade Practices Act, and a Pending Claim for Bad Faith?
In ISS Research, LLC v. Federal Insurance Co., Download ISS Research, LLC v. Federal Insurance Co. (W.D.N.C. Case No. 3.10.CV.41, Order Filed November 18, 2010) PUBLIC ACCESS, also published as 2010 WL 4791891 (W.D.N.C. November 18, 2010)(authorized password required to access Westlaw), a Plaintiff Corporation alleged various Claims concerning a Commercial General Liability Insurance Policy and a Commercial Excess and Umbrella Insurance Policy issued to it by the Defendant. The Policyholder-Plaintiff sought a Declaratory Judgment of Breach of Contract for alleged Wrongful Failure to Defend or Indemnify. It also alleged "claims under the North Carolina Unfair and Deceptive Trade Practices Act and for Bad Faith." ISS Research, LLC v. Federal Insurance Co., 2010 WL 4791893 at *1. Both parties filed Motions for Summary Judgment based on the Plaintiff's request for a Declaratory Judgment. Id.
The Federal Court applied a test used by the North Carolina State Courts to determine whether a Liability Insurance Company has a Duty to Defend, known as "a 'comparison test'." "Applying this test, a Court compares the allegations of the Complaint with the provisions of the insurance policy to determine whether the facts as alleged are covered or excluded." Id. at *2. Parenthetically, other jurisdictions employ the same test but some call it "a four corners test" or an "eight corners test". See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 3:48 (Shepard's/McGraw-Hill Second Edition; West Publishing Company 2010 Supplement).
Applying North Carolina's comparison test in this case, the Federal Court determined that there was no Duty to Defend or Indemnify concerning the Underlying Case, and granted Federal Insurance Company's Motion for Summary Judgment. See id. at *2-*5.
The Claims for alleged violations of the North Carolina Unfair and Deceptive Trade Practices Act, and for Bad Faith, remain pending in that case at this time. In some jurisdictions, Coverage is not required in order to state a claim upon which relief can be granted, or in order to state a cause of action, either for alleged Bad Faith or for an alleged violation of an Unfair and Deceptive Practices Act. See generally Dennis J. Wall, supra, § 3:100, and some Courts are following the same rule in First-Party Cases as well. Id., § 9:25.
Dennis Wall has handled many Insurance Coverage and Bad Faith Cases and Catastrophe Claims. The author of this post, his next speaking engagement is on a panel at the American Conference Institute's Bad Faith Litigation Conference in Orlando, Florida on November 30, 2010. The author has also been advised by the American Conference Institute that the ACI is continuing to offer its discount to readers of this Blog: Download ACI Advises Readers of the Insurance Claims and Issues and Insurance Claims and Bad Faith Law Blog are entitled to a discount.
Please Read The Disclaimer.
Comments