Partner Todd Wallace led a recent effort at all appellate levels to successfully defeat a major insurance company's efforts to avoid coverage in a case involving an overturned construction vehicle. In the past year alone, the insurance company filed four writ applications with the Louisiana Fourth Circuit, two writ applications with the Louisiana Supreme Court, and two separate formal suspensive appeals. The team succeeded in defeating each of these appellate challenges by the insurance company resulting in a significant settlement of behalf of the injured victim.
As part of this appellate work, Wallace Meyaski successfully held the insurance company liable under the relevant policy applying unique theories of detrimental reliance, wavier of coverage, bad faith, and conflicts of interest based, in part, on the insurer’s failure to timely issue a reservation of rights letter while, at the same time, advising the insured as to steps to take. A reservation of rights letter is provided by an insurance company to an insured indicating that a claim may not be covered under the policy. Reservation of rights letter do not deny a claim. However, the later indicates that the insurer is investigating the claim and reserves the right to deny the claim after it completes its investigation.
This case should serve as a critical reminder that an insurance company has special obligations that it owes to its insureds including, when necessary, the duty to promptly issue reservation of rights letters to alert the insured of its rights. Failure to do so can have significant implications on the insurer’s right to deny coverage at some later date.
For more information on Wallace Meyaski’s civil litigation and appellate practice, please contact us here.