In This Issue:
Minnesota Court of Appeals Upholds Contract Principles and Notice Requirements in Multi-Party Settlement
Jacobs v. Cable Constructors, Inc., 704 N.W.2d 205 (Minn.Ct.App. 2005).
The Minnesota Court of Appeals recently held that during multi-party settlement negotiations, a settlement offer is not considered accepted unless the acceptance corresponds exactly with the terms of the offer. The Court also held that an insurer must provide notice of its intent to recoup funds through a contribution action before its offer is accepted. This case involves several insurers who were engaged in a dispute regarding contribution to multiple lawsuits arising from a gas explosion at a construction site. During the settlement negotiations, one of the insurers made an offer of settlement which was not accepted. When settlement negotiations recommenced, the offer, which contained an additional provision, was accepted. The Court held that the second offer containing the additional provision was the offer accepted based on contract principles, regardless of the existence of the first offer. The Court also held that as part of an offer of settlement, an insurer making a settlement offer to the plaintiff must provide the other insurer with notice of its intent to recoup those funds via a contribution claim prior to the plaintiff's acceptance of the offer.
Georgia Court of Appeals Declares Exclusion Pertaining to Commingling of Client Funds Unambiguous and Applicable to Insureds Who Deny Knowledge of the Misappropriation
Fidelity National Title Insurance Company of New York v. OHIC Insurance Company, 619 S.E.2d 704 (Ga.Ct.App. 2005).
The Georgia Court of Appeals recently held that a provision within a professional liability policy excluding coverage for conversion, misappropriation or commingling of client funds was unambiguous and would apply regardless of whether the attorney actually commingled the funds herself. In this case, an approved attorney with a title insurance carrier issued title insurance on behalf of the carrier and performed closings for lenders. At the attorney's request, the title insurance carrier issued two insured closing service protection letters to two lenders. Subsequently, both lenders wired funds into the attorney's trust fund account for two closings. Neither of the closings occurred, however, and the funds were later found to be missing from the trust account. The attorney claimed to have no knowledge of what happened to the funds. Both lenders made claims against the title insurer for their losses. The title insurer then filed suit against the attorney, claiming that her professional liability carrier should provide coverage for the claim since the attorney denied having any knowledge or personal involvement with the alleged conversion of funds. The Court disagreed, finding that the exclusion in its policy regarding claims arising out of the misappropriation of client funds was an unambiguous, absolute exclusion with no exceptions.
Contact for more information: Jennifer K. Gust
UPDATE: Illinois Supreme Court Denies Appeal in Western States v. O'Hara
Western States Insurance Co. v. O'Hara, 357 Ill.App.3d 509, 828 N.E.2d 842 (4th Dist. 2005).
The Illinois Supreme Court recently denied the Petition for Leave to Appeal in Western States Ins. Co. v. O’Hara, a case that calls into question an insurance company’s right to hire coverage counsel to represent their interests and to assert the attorney-client and work product privileges regarding the work of that counsel.
For more information regarding this decision and the recent seminar hosted by the Insurance Services Group on this topic, please contact Carol Proctor.
This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. |