Coverage, Regulatory & Bad Faith
Sulloway & Hollis attorneys provide strategic guidance and advocacy to insurers and third-party administrators across New England, in areas that include insurance coverage, extracontractual and bad faith liability, regulatory compliance and related matters. Our attorneys are licensed in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut, as well as New York and New Jersey. We help our clients fulfill their business objectives and maintain regulatory compliance by providing efficient, creative and timely legal solutions and informed advice. Given our proven track record of thinking outside the box and staying abreast of important developments in all facets of insurance law, we help our clients achieve their goals and lessen their legal exposures in the most cost-effective manner possible.
Sulloway & Hollis Insurance attorneys are leaders in the legal profession. Many have achieved professional distinction such as:
- Leadership in national and international insurance and corporate counsel bar associations such as the American College of Coverage and Extracontractual Counsel, DRI-The Voice of the Defense Bar, the Association of Defense Trial Attorneys, the Federation of Defense and Corporate Counsel, and the International Association of Defense Counsel
- Recognition in Who’s Who in Insurance, Best’s Directories of Recommended Insurance Attorneys and Adjusters, The Best Lawyers in America©,Super Lawyers®
- Frequent appearances as authors and speakers on insurance issues
- Contributing authors to the DRI Claims Settlement Practices and Reservation of Rights Compendiums
Our services include proactive counseling, coverage analysis and litigation on behalf of insurers, third-party administrators and related entities under a wide array of insurance policies, including first-party, general liability, D&O, and professional liability policies of all types. We bring in-depth knowledge of insurance issues, coupled with substantial trial and appellate experience in federal and state courts throughout New England. With offices in Massachusetts, New Hampshire, Maine and Rhode Island, we work with clients throughout New England, including insurance companies, insurance agents and brokers, employee benefit plans, third-party administrators, health maintenance organizations and self-insured entities.
We represent insurance companies in a wide range of coverage and extracontractual liability disputes. We understand the importance of consistent and principled policy interpretation, timely claims handling, and the need for cost-effective resolution of coverage issues. Our services include:
- Coverage analysis
- Reservation of rights and other communications with insureds on coverage issues
- Litigating coverage disputes in declaratory judgment actions in state and federal courts and arbitration forums throughout New England
- Litigating insurance fraud, misrepresentation and rescission claims in state and federal courts and arbitration forums throughout New England
- Defending bad faith, unfair insurance trade practices and breach of contract claims on behalf of insurers in state and federal courts and arbitral proceedings throughout New England
- Handling appellate matters regarding coverage and other issues for insurers in federal and state courts throughout New England
- Policy drafting and review
- Customized training programs for claims professionals concerning significant trends and developments and ways to minimize extra contractual exposures
In addition, our attorneys counsel clients on risk management, coverage analysis, minimizing extracontractual liability exposures, regulatory requirements and other facets of the insurance business. The firm provides legal guidance to clients with respect to the application of federal and state regulations to insurance and reinsurance companies. We advise clients with respect to responses to requests for information from regulatory agencies, external auditors and others concerning regulatory requirements. We appear before regulatory agencies to help clients resolve any regulatory and compliance issues and to facilitate regulatory approvals. We also advise senior executive management on legal and regulatory matters related to all company operations and products, which includes the preparation of legal memoranda concerning significant legal, compliance and regulatory matters. Drawing on Sulloway & Hollis’s strong corporate and administrative law experience, we also offer:
- Guidance on corporate and regulatory matters, including formation, organization, qualification, domestication, licensing, registration, rehabilitation, mergers and acquisitions, and reorganizations
- Representation before insurance regulators and other state agencies
- Guidance on significant legal decisions as well as legislative and regulatory changes at the state and federal level
- Preparation of amicus curiae briefs on matters of industry to the insurance industry
Representative Matters Include:
- Negotiating a favorable resolution to claims against an excess-layer liability insurer arising out of its insured’s international investment-management services, in a proceeding that involved complex questions about the interplay of Australian and United States law
- Arbitrating a property reinsurer’s position to conclusion in a matter that involved ex gratia payments on the part of the ceding carrier
- Representing insurers in numerous coverage disputes, at both the trial and appellate levels, concerning defective construction and faulty workmanship claims at condominium developments and commercial properties throughout the Northeast. The disputes have included limitations on AI coverage, application of competing other-insurance provisions, insured contract obligations, defense cost contribution claims, triggers of coverage and applicability of business risk exclusions
- Advising insurers regarding obligations and exposures when multiple claims exceed available policy limits, including availability of interpleader to resolve competing claims to policy limits
- Counseling insurers regarding effective ways to frame coverage issues in underlying litigation, including by intervening for the limited purpose of submitting special jury interrogatories (special verdict form) to apportion liability, if any, between covered and non-covered claims and damages
- Representing a D&O insurer in coverage litigation concerning the availability of coverage for multiple underlying actions brought against a religious institution and certain officers and directors alleging breaches of fiduciary obligations and accounting improprieties, including claims brought by the Massachusetts Attorney General’s Office for the alleged misuse of charitable assets
- Representing a health care organization and D&O liability insurer in an action filed in the Rhode Island U.S.D.C. for declaratory judgment regarding the ability to deny coverage for amounts paid to settle claims under the False Claims Act on the grounds that the settlement constituted non-covered restitutionary relief, fines and penalties. The matter was resolved through mediation on favorable terms for the insurer
- Representing a D&O insurer in coverage litigation concerning the enforceability of a sublimit in a regulatory claim endorsement and the policy’s related claims provisions in a coverage dispute arising out of the criminal indictment of a health care organization’s CFO for alleging conspiracy to evade federal and state certificate of need regulations and HIPAA
Representative Reported Decisions Include:
- Clarendon National Insurance Company v. Philadelphia Indemnity Insurance Company, No. 19-1212 (1st Cir. Apr. 1, 2020). The Appeals Court affirmed the entry of summary judgment in favor of our client, dismissing the plaintiff’s claims for equitable subrogation, contribution, and statutory violations under Chapters 93A and 176D of the Massachusetts General Laws. The district court upheld our client’s coverage disclaimer because the allegations of property damage predated the inception of the applicable CGL policy and did not give rise to a covered claim. In affirming the district court’s decision, the First Circuit, applying Massachusetts law, also ruled that a liability carrier does not have duty to investigate a claim contained in a pleading which does not trigger the duty to defend.
- Lee Kennedy Co. v. Arch Insurance Company, 357 F. Supp. 3d 81 (D. Mass. 2019). Obtained summary judgment upholding insurer’s denial of coverage for insured’s pre-suit effort to resolve a dispute over the allegedly faulty construction of a school gymnasium.
- Donald Dwarska, et al. v. United Services Automobile Association, et al., 1679CV0149 (Mass. Super. Apr. 9, 2019). On November 27, 2013, a group of teenagers were riding in a 2005 Cadillac when the driver lost control and crashed. A back-seat passenger died as a result of injuries she sustained. Our client insured the vehicle owner and his daughter under a Standard Massachusetts Automobile Insurance Policy (Seventh Edition). Before suit was filed, plaintiffs’ counsel demanded, and our client offered, the policy limits to settle the case. Plaintiffs’ counsel, viewing the available insurance as inadequate, refused to release the operator, arguing that the operator was not a household member or a listed operator under the policy, and therefore the carrier could not properly condition settlement upon receiving a release on their behalf. In the ensuing litigation in Massachusetts Superior Court, plaintiffs’ counsel claimed that our client’s refusal to pay the policy limits without a release violated Chapters 93A and 176D of the Massachusetts General Laws, and sought extra-contractual damages, multiple damages and attorneys’ fees. In April 2019, the Superior Court dismissed the plaintiffs’ case, holding that a Massachusetts liability insurer can properly condition settlement of plaintiffs’ claims upon the receipt of a release of its named insured as well as others who may be entitled to coverage under the policy.
- The Hanover Insurance Company v. Retrofitness, LLC, No. 16-1751-BRM, 2017 U.S. Dist. LEXIS 163912 (D.N.J. Sept. 29, 2017). Obtained judgment on the pleadings for professional liability insurer upholding its denial of coverage for consumer-protection claims under an unambiguous policy exclusion, notwithstanding the insured’s reasonable expectation of coverage argument.
Representative Cases Include:
- First Specialty Insurance Corporation v. Pilgrim Insurance Company, Massachusetts Appeals Court No. 2012-P-1281. Obtained Appeals Court decision upholding CGL insurer’s right to deny coverage based upon application of auto use exclusion to negligent hiring and supervision claims brought against company that employed at fault driver in motor vehicle accident.
- Republic Franklin Ins. Co. v. United Educators, Massachusetts Appeals Court No. 2004-P-1730. Successfully defended educators liability insurer against action brought by general liability insurer seeking contribution toward settlement and defense costs paid on behalf of private educational institution in action brought by student alleging wrongful discharge, breach of contract and hazing.
- Berkshire-Cranwell Limited Partnership v. Tokio Marine & Nichido Fire Ins. Co., 2012 U.S. Dist. LEXIS 93635 (D. Mass. July 6, 2012). Obtained Judgment on the pleadings upholding insurer’s right to deny coverage under employee benefit liability policy for statutory wage and hour claims asserted against the insured in class action lawsuits resolved via a consent judgment. In addition to upholding the insurer’s substantive coverage defenses based upon the applicable policy provisions, the court also sustained the insurer’s late notice defense.
For more information about our Coverage, Regulatory & Bad Faith practice, visit our contact page, or call one of our Coverage, Regulatory & Bad Faith Practice Group Co-Chairs, Barbara O’Donnell at 401-421-3659 or Alexander Henlin at 603-223-2800.