Unraveling Plain Meaning, Extrinsic Evidence And the Doctrine of Contra Proferentem

Gordon & Rees insurance attorneys Regen O’Malley and Greil Roberts published an article in the Insurance Coverage Law Bulletin discussing the slow but steady trend of judges willing to consider extrinsic evidence to assist in the interpretation of insurance policies.  This is a positive development for insurers, who frequently come up against the courts’ strict application of the contra proferentem rule whenever policy language is determined to be ambiguous.

To read the full article, click here.

Gordon & Rees Partner Matt Foy Appointed Vice Chair of DRI Insurance Law Committee

DRI – The Voice of the Defense Bar, the leading organization of defense attorneys and in-house counsel, has appointed Gordon & Rees San Francisco partner Matthew S. Foy as vice chair of DRI’s Insurance Law Committee.

In a Sept. 11 letter to Foy announcing his vice chair appointment, DRI president-elect John Parker Sweeney noted the appointment is for a one-year term, effective at the conclusion of DRI’s Oct. 22-26 Annual Meeting, held at the San Francisco Marriott Marquis.  The appointment paves the way for Foy’s selection as chair of the Insurance Law Committee in 2016.  In addition to the Insurance Law Committee, Foy is a member of DRI’s Commercial Litigation, Intellectual Property Litigation and Steering Committees.

Foy is the co-national practice group leader for the firm’s property and casualty insurance practice as well as the practice group leader of the San Francisco insurance group. He has more than 15 years of experience representing national insurers at the claims stage, in trial and on appeal. Foy’s practice focuses on insurance coverage and bad-faith litigation and advice involving primary and excess liability policies with an emphasis on complex personal and advertising injury, cyber-liability, environmental, asbestos, other mass torts, and construction defect matters. He also handles all aspects of insurance cases involving professional liability insurance, inland marine, first-party property, and life, health, and disability matters. He assists clients with drafting policy language and claims manuals and provides in-house client seminars on coverage and claims handling issues, as well as litigation planning. In addition to his insurance practice, Foy represents corporate clients in connection with contract negotiation, dispute resolute, and related litigation.

Foy is a frequent speaker on issues confronting the insurance industry and he recently contributed a chapter in DRI’s 2014 “Coverage B: Personal and Advertising Injury Compendium.”

Triable Issues Exist About Insured’s Right to Lost Rents Even Though No Actual Tenant Was on Premises at Time of Loss

The California Court of Appeal, Second Appellate District, recently reversed a trial court order granting summary judgment to a commercial property insurer.  The trial court held the insurer properly denied its insured’s lost rents claim in connection with vandalism damage where there was not an existing tenant when the damage took place.  The Court of Appeal disagreed, holding in Ventura Kester, LLC v. Folksamerica Reinsurance Co. that the policy did not clearly require the insured to have a tenant in place as a condition of coverage for lost rents.  Whether the insured would have been able to rent the property, but for the vandalism, raised triable issues of fact.  Therefore, the court concluded summary judgment in favor of the insurer was improper.

Folksamerica Reinsurance issued a commercial building owner’s policy to Ventura Kester as owner of a property in Sherman Oaks.  The policy, in effect from September 2006 to September 2007, covered the structure and promised to pay the insured’s “net loss of rental income” due to damage to covered property.  A tenant was in place when the policy was issued, but it subsequently vacated the premises.  Ventura began discussions with potential tenants, including entering into a letter of intent with OfficeMax. But no agreement was in place at the time of the loss.

On Sept. 11, the court held an ambiguity existed in the policy as to whether an actual tenancy was required for coverage to exist.  The court also held triable issues existed about whether the insured had actually sustained damages from the vandalism.