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BatesCarey LLP invites you to a panel discussion on "Enforcing 'Foreign' Arbitration Clauses and Responding to Jurisdictional Challenges in U.S. Courts," hosted by the XL Bermuda Claims Department. The discussion will be led by Ommid C. Farashahi and Jason P. Minkin of BatesCarey LLP and Joshua S. Force of Sher Garner Cahill Klein & Hilbert, L.L.C.

There have been several recent noteworthy decisions from courts examining insurance coverage for, and liability issues impacting, architects, engineers and other design professionals. These cases have dealt with, among other things:

• the scope and application of the "professional services" exclusion in commercial general liability policies;
• the duty of care owed to future homeowners;
• criminal liability for circumventing state and local codes;
• application of the "first cost" doctrine for calculating damages;
• the "completed and accepted doctrine;" and
• allocation between covered and non-covered claims.

We provide brief summaries of these cases below.

On July 15, 2014, the Sixth Circuit Court of Appeals tagged an excess insurer with responsibility for paying $8 million in underlying defense costs after the primary insurer was determined to have wrongfully refused to take on the duty to defend. IMG Worldwide, Inc., et al. v. Westchester Fire Ins. Co., Nos. 13-3832, 13-3837, 2014 WL 3409044 (6th Cir. Jul. 15, 2014). The ruling serves as a cautionary warning to excess insurers that they may not sit idly by, comforted by the notion that they are insulated under a follow-form policy from owing a defense obligation merely because the underlying primary insurer has denied coverage.

The United States Court of Appeals for the Seventh Circuit affirmed a trial court's dismissal of a lawsuit against our client, an insurer that issued an umbrella liability policy covering a municipality and its detectives, alleging bad faith and failure to settle. Kevin Fox v. American Alternative Insurance Corporation, Case No. 13-1290 (7th Cir.). Certain detectives assigned their...

Who's Who Legal has named BatesCarey LLP partners Robert J. Bates Jr., Scott L. Carey, and Adam H. Fleischer as preeminent attorneys in the insurance and reinsurance field. Who's Who Legal based the selection on extensive peer research conducted by the London-based organization. The 2014 global listing included fewer than 600 attorneys worldwide, and Mssrs. Bates, Carey and Fleischer were 3 of only 28 attorneys selected from the State of Illinois. More information concerning Who's Who Legal can be found here.

Congratulations to Adam H. Fleischer who collaborated with the Swiss Re expert network to create and present an international webinar on June 25, 2014, titled "Crossroads: Where Med Mal Meets Products Liability." The seminar used three types of claims as examples: Pharmacy compounding; hip implants and; vaginal mesh. Each type of claim was discussed in the context of how it may present both professional negligence E&O liability, as well as product-type general liability allegations against the same defendants, or against co-defendants who may both be insured under the same policy. This gave rise to a discussion of challenging coverage issues, including the simultaneous existence of different triggers, conflicts of interest between co-insurers, disputes over which defendant or which claimant should have access to policy limits, medical monitoring coverage, and wording issues that may help limit an insurer's exposure. The seminar was attended by over 300 industry professionals from across the globe.

John A. Husmann will be presenting a training course through the Claims and Litigation Management Alliance, entitled, "Evaluating Additional Insured Coverage and Contractual Indemnity Issues." The presentation will take place on Wednesday, June 25, 2014, beginning at 9:00 am at the offices of Swiss Re in Overland Park, Kansas. This course will teach methods for evaluating additional insured status under CGL policies and the distinction and interplay between additional insured status and carrier coverage obligations to insureds for contractual indemnity. Participants will also learn about various forms of additional insured endorsements and indemnity agreements, as well as practical tips for negotiating and compromising shares in various contexts, including construction defect. The session will conclude with an interactive discussion and analysis for problem solving involving hypothetical claims. For more information, please click here.

Ommid C. Farashahi has been appointed as a General Committee Vice-Chair of the ABA Tort Trial and Insurance Practice Section Professionals' Officers' and Directors' Liability Committee for the 2014-2015 fiscal year. The one-year term appointment comes with many responsibilities and obligations. The Committee meets several times a year, and is open to all 25,000 TIPS members. Further information regarding the ABA's Tort Trial and insurance Practice Section can be found here: http://www.americanbar.org/groups/tort_trial_insurance_practice.html. Congratulations to Ommid!

On May 28, 2014, the Delaware Supreme Court held that a "demand letter" could not be the basis of a D&O insurance claim because it was unripe. XL Specialty Ins. Co. v. WMI Liquidating Trust, Case No. N12C-10-087 (Del. S. Ct May 28, 2014). By way of background, Washington Mutual, Inc.'s ("WMI") Liquidating Trust sent a demand letter to WMI's former directors and officers (D&Os) seeking damages from them for downstreaming $500 million from WMI to its banking subsidiary Washington Mutual Bank, even though, according to the Trust, WMI was insolvent at the time of the downstream. WMI purchased two consecutive D&O insurance policy towers covering the D&Os. The insurers in the first tower accepted coverage for the downstreaming claim and are advancing defense costs. The insurers in the second tower (including AXIS) assert coverage is unavailable because, among other things, the downstreaming claim relates back to claims made in the first tower. The Trust wants the insurers in the second tower to cover the downstreaming claim because the first tower is almost exhausted. The Trust has not yet sued the D&Os. Instead, the Trust sued the second tower insurers so that it can determine whether suing the D&Os would be a worthwhile endeavor. The Trust filed its first lawsuit against the second tower insurers in March 2012 in Delaware bankruptcy court. The bankruptcy court dismissed the Trust's complaint on jurisdictional grounds in October 2012. The Trust then re-filed its complaint in Delaware state court a few days later, asserting causes of action against the second tower insurers for breach of contract, bad faith, and declaratory judgment. The second tower insurers moved to dismiss the Trust's complaint, arguing that the Trust did not have standing to sue the insurers and that the Trust's lawsuit against the insurers was not ripe. The trial court denied the motion to dismiss but certified the ruling for interlocutory appeal to the Delaware Supreme Court, which accepted the appeal.

On May 15, 2014, the Superior Court for the District of Columbia granted a motion to dismiss filed by several D&O and E&O insurers, holding that a professional services exclusion relating to one of the insured's affiliated companies barred coverage entirely for the various underlying matters. Carlyle Inv. Mgmt., L.L.C. v. ACE Am. Ins. Co., Case No. 2013 CA 003190 B (D.C....