Tampa Judge: Business Liability Insurers Not Responsible For Claim Made Prior To Policy Period
Tampa Judge: Business Liability Insurers Not Responsible For Claim Made Prior To Policy Period Oct 14, 2021 Insurance disputes often involve complex questions of law and contract interpretation. Yet many cases boil down to a single question: Does the insurance policy actually cover the claim at issue? Sometimes this question proves relatively easy to answer. For example, there is this recent decision from a federal judge in Tampa, Ditech Financial LLC v. AIG Specialty Insurance Company. The plaintiff in this case was a mortgage loan servicing company. The plaintiff ran into trouble with regulators in 2014 over purported “deficiencies” in its business practices. As relevant to this case, the plaintiff had failed to conduct annual escrow analysis for borrowers involved in Chapter 13 bankruptcy cases. Basically, Ditech was supposed to analyze any changes to a borrowers’ property tax and insurance payments while they were in bankruptcy. The failure to conduct this analysis meant that there were shortages in the borrowers’ escrow accounts, which they remained liable for under their mortgages. Ditech made up for these shortfalls and then tried to get its money back from the borrowers after they exited bankruptcy. The Executive Office of the United States Trustee (EOUST), which oversees bankruptcy estates, raised concerns about this practice with the plaintiff in 2014. In October 2015, an EOUST lawyer sent an email notifying the plaintiff’s attorney that the Trustee Program would “move forward” with settlement discussions over this and other deficiencies with respect to the plaintiff’s business practices. The final settlement included approximately $24 million related to the escrow accounts. The plaintiff then tried to recover these losses under two of its business liability insurance policies. The insurers refused to provide coverage, prompting the plaintiff to file its federal lawsuit. The judge overseeing the case decided to grant summary judgment to the defendant insurance companies. The judge’s reasoning was straightforward: Coverage under both insurance policies here were “triggered only if a claim is first made against the insured during the policy period.” In this case, the applicable policy period began on September 1, 2016, and ended on September 1, 2017. But as noted above, the EOUST initially notified the plaintiff of its claim–i.e., its intent to seek a settlement related to the escrow accounts–in October 2015, nearly a year before the policy period. The judge noted this email “not a simple request for more information or a mere inquiry into some untoward event.” It was, in fact, a “specific demand for [the plaintiff] to rectify the legally cognizable damage created by its escrow analysis deficiencies.” As such, the clear language of the insurance policies barred the plaintiff from seeking coverage of its losses. Contact a Tampa Insurance Lawyer Today In any insurance dispute, both sides have certain rights and responsibilities. That is why it is important to work with an experienced Tampa insurance bad faith attorney who can sit down and review the specific language of a policy with you and offer advice regarding the applicability and scope of its coverage. If you need to speak with someone today, contact HD Law Partners to schedule an initial consultation. Source: scholar.google.com/scholar_case?case=813-253-5333302785689 Posted in Insurance Bad Faith, Insurance Defense | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us