New York Court of Appeals Upholds 'No Prejudice' Rule
May 26, 2005
On April 5, 2005, the New York Court of Appeals upheld long-standing New York law that a policyholder's late notice defeats coverage under a commercial liability policy without any specific requirement that an insurer demonstrate prejudice. The court disagreed with any assessment that the "no prejudice" rule was a doctrine whose time had come. It rejected a policyholder's request to apply a prejudice rule to "notice of a suit in commercial policies where the notice was admittedly late." <i>See Argo Corporation, et al. v. Greater New York Mutual Insurance Co.,</i> (N.Y. April 5, 2005). In a separate opinion issued on the same day as <i>Argo,</i> the court did apply a "prejudice" standard in the limited context of supplemental underinsured motorist ("SUM") coverage where late notice of a SUM claim followed timely notice of the underlying accident. <i>Rekemeyer v. State Farm Mutual Automobile Insurance Co.,</i> (N.Y. April 5, 2005).
Getting the Most Out of Insurance Dividend Plans
May 26, 2005
My insurance pays dividends. Sounds like a good idea. Some insurance companies offer "dividend plans" that allow a policyholder to obtain dividends from the insurance company, often based on the loss experience under the policyholder's insurance program. If losses are low, the insurance company promises to pay the policyholder dividends. Dividend plans do have their pitfalls, however, as a number of Kemper policyholders have discovered. In an undated letter to policyholders, Michael A. Coutu, the acting president and chief executive officer of the Kemper Insurance Companies, stated that as a result of Kemper's financial condition, Kemper "will not declare any dividends in the foreseeable future" meaning that "a payment due Kemper may be larger than anticipated or that a return or credit may be less than expected, despite underlying losses." As a result, these "loss-sensitive" dividend plans have not always performed as expected.
Case Briefs
May 26, 2005
Highlights of the latest insurance cases from around the country.
The Leasing Hotline
May 26, 2005
Highlights of the latest commercial leasing cases from around the country.
The Sales Volume Termination Clause: Protecting the Landlord's Interests
May 26, 2005
As the popularity of lifestyle center developments continues to grow, the national and regional small-shop tenants forming the leasing backbone of these projects persist in their efforts to negotiate lease rights traditionally granted only to anchor tenants just a few years ago. One such right is the sales volume termination right. Generally, the sales volume termination clause allows a tenant to terminate its lease in the event sales from the tenant's premises do not exceed a predetermined sales volume during a specific period of time. The primary purpose of this clause is to provide a tenant with an exit strategy for an underperforming store. Although the cause of such underperformance may be attributable to a struggling shopping center, alternate causes include poor store management and misguided merchandising decisions, among others. Certainly, landlords would prefer to avoid granting tenants any termination rights; however, the relative bargaining position of the parties may require that the landlord concede to the tenant's insistence for a sales volume termination right. If a landlord finds itself providing a sales volume termination right, then the sales volume termination clause should be structured to address the tenant's specific concerns rather than serve as an open-ended
What's in a Vanilla Box?
May 26, 2005
When negotiating a long-term lease, the landlord and the tenant should specifically agree upon the condition that the premises will be in at the time of delivery by the landlord to the tenant. Too often phrases such as "vanilla box," "warm vanilla box" and "as-is condition" are utilized by leasing representatives to describe generically the condition that the premises will be in at the time of delivery. However, the differences between what each party means by those terms can be dramatic. By specifically addressing the condition of the premises, landlords and tenants may avoid costly disputes once the lease has been executed and the landlord delivers the premises. This article addresses the terminology and the common pitfalls associated with the terms "vanilla box," "warm vanilla box" and "as-is condition."
In the Spotlight: Lien Waivers ' What Do They Really Mean?
May 26, 2005
Lien waivers are a staple of construction projects. Everybody knows the importance of obtaining a lien waiver, although many owners and contractors never bother to collect them. However, do they know where the waiver forms themselves come from or what the waivers really mean? Unfortunately, many owners, contractors and subcontractors cannot answer these questions, and the consequences are often devastating.
Let's Get Relevant
May 26, 2005
Tremendous volumes and increasing varieties of electronic information create onerous burdens for corporations dealing with discovery requests, internal investigations and response to regulatory agencies. <br>To help combat this technology burden, corporations are employing document-analysis technology to accelerate the identification of relevant information. An emerging best practice, this approach yields considerable cost and time benefits that help law firms reduce discovery risk and expense for their clients.
