• INSURANCE LAWS

California Court of Appeals

Garbell Vs. Conejo Hardwoods, Inc. (Decided on 05.04.2011)

Negligent destruction of property - Plaintiff filed appeal against order of Trial Court, which undermined damaged caused to Plaintiff - Plaintiffs property damaged by smoke from fire - Workers of Defendant were working at Plaintiffs home - Contention of plaintiffs was that fire broke-out due to negligent action by workers - Plaintiffs claimed uninsured amount from Defendant - Trial Court held Defendant 55 percent liable for damaged - Plaintiff was not satisfied with verdict of Trial Court - Hence this Appeal - Whether Trial Court rightly calculated liability and damage caused -

HELD - Expert could not conclude that a carelessly discarded cigarette caused fire and that belonged to one of workers - Court drew reasonable inferences based upon timing and proximity - It was clear from evidence that workers had been working there before fire and left job site shortly before fire started - No one else was at home at that time - When two reasonable but conflicting inferences might be drawn, court would inclined to the one that supported the judgment - Negligence was also on part of plaintiff as he did not insured his whole property - Court affirmed judgment of Trial Court - But remanded modification relating to determination of costs

Court of Appeals of New York 

American Standard Inc., et al. v. Swiss Reinsurance America Corporation, et al. (Decided on 05.04.2011)

Choice of law - Article 74 of New York Insurance Law - Appeal against judgment of Appellate Division that New York Insurance Law would apply to all claims arosed from liquidation of Insurance Company - Insurance Company was adjudged insolvent and Liquidator was appointed to dispose of assets of Company - Liquidator disallowed claims of major policyholders as he exclusively applied New York Law to all policyholders - In appeal Supreme Court reversed above order by holding that under New York Law Liquidator could not legitimately disallow claims without first engaging in a choice-of-law - Such decision was reversed by Appellate Division with reason that New York had a paramount state interest and if different laws applied it would amount to discrimination - Hence this appeal - Whether New York Insurance Law would apply to all claimants unanimously -

HELD - In contract cases 'center of gravity' or 'grouping of contracts' was the appropriate approach - Purpose of 'grouping of contracts' was to establish that which state had 'the most significant relationship to the transaction and the parties' - Jurisdiction in insurance contracts with the most significant relationship would generally be jurisdiction which parties understood was to be principal location of insured risk - 'Choice of law' principles continue to apply even after an insurer had been adjudged insolvent - Blanket application of New York law to Company's policies would frustrate the statutory mandate - Rejected argument that an individual choice-of-law analysis on each of Company's policy would create "subclasses" among the Major Policyholders - Article 74 of the Insurance Law recognized that allowance of claims and distribution of liquidated assets were two separate functions - If the Legislature intended for substantive New York law to apply to every claim submitted by policyholders at the allowance phase, it would have said so - Conclude that Major Policyholders were entitled to an evaluation of their claims by Liquidator under same common law choice-of-law principles that clearly applied to their claims prior to Company's insolvency - Order of Appellate Division reversed

• ENVIRONMENTAL LAWS

In the Court of Appeal of The State of California

CYNTHIA A. NEWTON-ENLOE et al., Plaintiffs and Appellants, Vs. MARK HORTON, as Director, etc., et al., Defendants and Respondents (Decided on 05.04.2011)

Safe drinking water plan - Section 116355 of Health and Safety Code and Section 1085 of Code of Civil Procedure - Plaintiffs petitioned trial court for an order compelling the California Department of Public Health and its director to prepare and submit to the Legislature a safe drinking water plan - Plaintiffs alleged that Health and Safety Code section 116355 required that Department submit to Legislature a plan every five years and that no such plan had been completed - Plaintiffs contended that communities resided or worked there had drinking water that contains contaminants referred to in section 116355 - Petition seeked a writ of mandate commanding the Department to prepare and submit to the Legislature a plan and also to submit to the court a detailed proposal for the completion of the plan, including parameters and a timeline - Defence of Department was that any mandate to prepare and submit a plan was suspended by the Legislature's decision to discontinue funding its preparation - Plaintiffs contended that lack of resources was not a defense to failing to perform a ministerial duty - Trial Court denied petition with observation that Plaintiffs failed to carry their burden of proof - Hence this petition -

HELD - Declarations filed by the Department were from three current and former division chiefs who stated that funding for the plan was discontinued by the Legislature - Their understanding was any mandate to prepare the [plan] was suspended - Declarations did not address any other issues - Division chiefs did not say anything about the possibility of speedy alternative remedies - Court concluded that the statutory mandate was not suspended - Court's task in interpreting a statute was to "'ascertain and effectuate legislative intent'" - In doing so court began by considering the statute's words because they were generally the most reliable indicator of legislative intent - Department did not offer evidence of any Budget Acts in which funding for the preparation of the safe drinking water plan expressly was discontinued - Department declarations from three current and former division chiefs of the Department offering their opinion that the statutory mandate to prepare a plan was suspended, were of little value because they merely state legal conclusions - Consequently, Department was not entitled to judgment on the ground that Government Code section 11098 suspended the statutory mandate to prepare a plan - Judgment of Trial Court was reversed - matter was remanded to enable Trial Court to decide whether the requirements of Code of Civil Procedure section 1085 have been met.