Insurance Law Commons^™

Technologically Improving Textualism, Jeffrey W. Stempel, Erik S. Knutsen

Nevada Law Journal Forum

The textualist approach to construing statutes, regulations, contracts, and other documents remains dominant but has drawbacks, most significantly its tendency to disregard probative evidence of textual meaning in favor of isolated judicial impressions and dictionary definitions. Although a broader, contextual, “integrative” approach to interpretation is preferable, the hegemony of textualism, even extreme textualism, is unlikely to recede soon. Textualism can be substantially improved, however, through effective use of a form of big data—the corpus linguistics approach to discerning word meaning. By enlarging the universe of sources about how words are actually used, corpus linguistics represents a significant improvement over imperial …

What Is The Meaning Of "Plain Meaning", Jeffrey W. Stempel

Scholarly Works

The American approach to construing texts (statutes, regulations, contracts and documents generally) stresses decision through determining the “plain meaning” of the document based on the court’s reading of the text. Where the court finds plain meaning on the face of text, it generally refuses to consider additional contextual information or extrinsic evidence of meaning.

Notwithstanding its status as the dominant approach to interpretation, the plain meaning concept has not been well defined or operationalized. Despite judicial confidence in the plain meaning approach, courts have wisely been willing to sidestep it and eschew the rather clear facial meaning of text when …

Rejecting Word Worship: An Integrative Approach To Judicial Construction Of Insurance Policies, Jeffrey W. Stempel, Erik S. Knutsen

Scholarly Works

Litigation over insurance coverage is really a quest for meaning: Does the insurance policy cover the loss at issue? Construing the insurance policy, courts are attempting to give legal effect to what the document purports to command. But what were the intentions and expectations of insurer and insured? Do those intentions even matter? Or is only the written text of the policy relevant to the coverage result? Courts approaching these questions typically frame the interpretative choice as one of strict textualism versus a more contextual, functionalist approach.

In many, perhaps even most situations, text and context align to create an …

Notes From A Quiet Corner: User Concerns About Reinsurance Arbitration – And Attendant Lessons For Selection Of Dispute Resolution Forums And Methods, Jeffrey W. Stempel

Scholarly Works

Arbitration between insurers and reinsurers – those who insure insurance companies – should logically run as smoothly as any arbitration process. Like the traditional commercial arbitration that drove enactment of the Federal Arbitration Act, reinsurance arbitration involves experienced actors in a confined industry in which the parties should be constructively aware of the rules, norms, customs and practices of the industry. But in spite of this, reinsurance arbitration experiences consistent problems of which the participants complain. This article reviews the complaints and exams possible solutions – including the possibility of arbitrating less and litigating more. Although these possible solutions would …

The Right To Reimbursement: Nevada Courts Should Follow The Trend And Forbid Insurers From Seeking Recoupment Of Defense Costs, Kristen Matteoni

Nevada Law Journal

No abstract provided.

Enhancing The Socially Instrumental Role Of Insurance: The Opportunity And Challenge Presented By The Ali Restatement Position On Breach Of The Duty To Defend, Jeffrey W. Stempel

Scholarly Works

The American Law Institute (ALI), in its current draft of the Restatement of the Law of Liability Insurance , has adopted the position that a liability insurer in breach of its duty to defend, but not acting in bad faith, forfeits the right to dispute coverage of the resulting judgment or reasonable, noncollusive settlement in a lawsuit. The ALI view is the minority rule in the courts in that most make bad faith a prerequisite for loss of a coverage defense but presumably will spur re-examination of the issue in many states. Unsurprisingly, insurers have opposed the ALI position with …

Summary Of Century Sur. Co. V. Casino W., Inc., 130 Adv. Nev. Op. 42, Michael Paretti

Nevada Supreme Court Summaries

The court determined whether two distinct provisions of an insurance policy regarding air pollution were subject to multiple reasonable interpretations.

Rediscovering The Sawyer Solution: Bundling Risk For Protection And Profit, Jeffrey W. Stempel

Scholarly Works

No abstract provided.

Stoney Road Out Of Eden: The Struggle To Recover Insurance For Armenian Genocide Deaths And Its Implications For The Future Of State Authority, Contract Rights, And Human Rights, Jeffrey W. Stempel, Sarig Armenian, David Mcclure

Scholarly Works

The Armenian Genocide during the waning days of the Ottoman Empire continues to represent one of history’s underappreciated atrocities. Comparatively few people even know about the 1.5 million deaths or the government-sponsored extermination attempt that provided Hitler with a blueprint for the Nazi Holocaust. Unlike the Holocaust, however, there was never any accounting demanded of those responsible for the Armenian Genocide. In the aftermath of both tragedies, insurers seized upon the resulting disarray and victimization to deny life insurance benefits owed as a result of the killings. American-based litigation to vindicate rights under the Armenian polices faced substantial legal and …

Misclassifying The Insurance Policy: The Unforced Errors Of Unilateral Contract Characterization, Hazel G. Beh, Jeffrey W. Stempel

Scholarly Works

Insurance policies are traditionally classified as unilateral or “reverse-unilateral” contracts, a characterization we find largely incorrect, with problematic consequences for adjudication of insurance coverage disputes. In addition to the general difficulties attending the unilateral classification, the concept as applied to insurance policies is not only unhelpful but incorrect. Insurance policies are more accurately viewed as bilateral contracts. In addition, the unilateral characterization of insurance policies introduces error and inconsistency into the litigation of insurance controversies. In particular, the unilateral view tends toward excessive formalism and focus on so-called “conditions” precedent to coverage, eschewing material breach analysis and encouraging needless forfeitures …

The Insurance Policy As Social Instrument And Social Institution, Jeffrey W. Stempel

Scholarly Works

Insurance policies are classified as a species of contract. Although this characterization is correct, it is unduly narrow if used as the exclusive lens for assessing insurance policies, which are not merely contracts but also are designed to perform particular risk management, deterrence, and compensation functions important to economic and social ordering. Recognizing this has significant implications regarding the manner in which insurance policies are construed in coverage disputes and suggests that policy construction can be improved by not only performing traditional contract analysis of disputed policies but also by appreciating the particular function of the insurance policy in question …

The Insurance Policy As Statute, Jeffrey W. Stempel

Scholarly Works

Insurance policies are classified as a subspecies of contract. Although the taxonomy is correct, rigid adherence to this classification system limits the legal system's ability to deal with some of the most problematic and frequently litigated questions of insurance coverage. Restricting conception of insurance policies to the contract model unduly limits analysis of the meaning and function of the policies. In addition, restricting characterization of insurance as a matter of “contract” does not necessarily produce swift, inexpensive, efficient, or uniform decisions (to say nothing about accuracy, justice, or fairness). Within contract law, scholars, and courts differ over the respective primacy …

The Insurance Policy As Thing, Jeffrey W. Stempel

Scholarly Works

Insurance policies are a type of contract. But characterizing them only as contracts misses much of the richness of the insurance arrangement, policyholder-insurer relations, and the degree to which insurance policies, which are heavily standardized, are designed to perform a particular function. Because of their mass standardization and deployment to address particular risk management issues, insurance policies are in many respects like products or chattels. Insurers and the insurance trade press in fact frequently speak of a line of insurance "products" or a new "product" being introduced to address an emerging risk. Appreciating this aspect of the insurance policy can …

The Relationship Between Defense Counsel, Policyholders, And Insurers: Nevada Rides Yellow Cab Toward "Two-Client" Model Of Tripartite Relationship. Are Cumis Counsel And Malpractice Claims By Insurers Next?, Jeffrey W. Stempel

Scholarly Works

It happens constantly in civil litigation. An insurance company hires a lawyer to defend its policyholder from a third party’s claim of injury. But just who is the lawyer’s “client?” Is it the policyholder who is the named defendant in the case and is “represented” in court proceedings? Or is it the insurer who, in most cases, selected the attorney, pays the attorney, supervises the litigation, and has (by the terms of the liability insurance policy) the right to settle the case, even over the objections of the policyholder? Ordinarily, the liability insurer has both the duty to defend a …

Crisci V. Security Insurance Co.: The Dawn Of The Modern Era Of Insurance: Bad Faith And Emotional Distress Damages, Jeffrey E. Thomas

Nevada Law Journal

No abstract provided.

Judicial Broken-Field Running Perl V. St. Paul Fire & Marine Ins. Co., John F. Dobbyn

Nevada Law Journal

No abstract provided.

Insurer Or Policyholder Control Of The Defense And The Duty To Fund Settlements, James M. Fischer

Nevada Law Journal

No abstract provided.

Introduction: Favorite Insurance Cases Symposium, Jeffrey W. Stempel

Scholarly Works

Insurance law scholars and teachers sometimes feel, with a mixture of paranoia and justification, that insurance law simply does not receive its proper respect in the hierarchy of legal education and law generally.

Consider the law school curriculum. In none of America’s nearly 200 ABA-approved law schools in insurance law a required course. Nor is it considered a course that, although not required, prudent students “must” be sure to take before they graduate (e.g. Evidence, Corporations). Enrollments may be respectable but the class is seldom oversubscribed, even where the law school is located in an insurance hub city. Although other …

Timeless And Ahead Of Its Time: Lach's V. Fidelity & Casualty Of New York, Jeffrey W. Stempel

Scholarly Works

The publication of Judge Keeton's important article “inventing” the reasonable expectations doctrine in 1971 is notable for infusing a good deal of intellectual energy into the study of insurance law, particularly judicial decisions about insurance coverage. Keeton's article, which deduced from cases the principle that courts tended to interpret policies to vindicate the objectively reasonable expectations of the insured, has rightly been viewed as a milestone. It clarified an area of law long seen as inconsistent or result-oriented. It spurred additional important scholarship in the area and elevated insurance caselaw from something of a backwater to at least a respectable …

The Insurance Aftermath Of September 11: Myriad Claims, Multiple Lines, Arguments Over Ocurrence Counting, War Risk Exclusions, The Future Of Terrorism Coverage, And New Issues Of Government Role, Jeffrey W. Stempel

Scholarly Works

September 11, 2001, is an unforgettable date for many reasons. In addition to its political, social, and historical importance, it may mark a watershed of insurance history as well. The value of the insurance losses due to the collapse of the World Trade Center (WTC) towers is estimated to total at least $35 billion and perhaps $75 billion. In addition, most of the people killed by terrorism were covered by life insurance. Many business operations were affected, invoking possible business interruption coverage. The airplanes that became weapons of destruction carried passengers whose estates are likely to press claims against the …

Recent Case Developments, Jeffrey W. Stempel

Scholarly Works

Recent case developments in Insurance Law in the years 2000 and 2001.

Recent Case Developments, Jeffrey W. Stempel

Scholarly Works

Recent case developments in Insurance Law in the years 2000 and 2001.

Doctors, Hmos, Erisa, And The Public Interest After Pegram V. Herdrich, Jeffrey W. Stempel, Nadia Von Magdenko

Scholarly Works

The Employee Retirement Income Security Act of 1974 was enacted in the wake of highly publicized pension disasters in order to protect employee pension rights. Born as a piece of pro-worker legislation, it initially was criticized by business groups as a cause of bureaucratic arteriosclerosis that was worse than the disease of pension failures. Even worse, it prompted many employers to consider dispensing with pension plans altogether rather than struggle with the administrative and financial obligations of ERISA. Business, labor, and the public all complained about the law's complexity. It even became something of a national joke as regulators took …

An Inconsistently Sensitive Mind: Richard Posner's Celebration Of Insurance Law And Continuing Blind Spots Of Econominalism, Jeffrey W. Stempel

Scholarly Works

Seventh Circuit Judge Richard Posner is well known for bringing economic analysis to bear on a host of issues, including infamously controversial notions such the market for baby sale. Not surprisingly, Posner's insurance law opinions reflect economics, but perhaps not to the degree one would expect. A review of Posner's 20 years of opinions relating to insurance issues reviews his pragmatic jurisprudence as well. Decisions frequently reflect not only economics but also situational context and considerations of business reality as well as a sophisticated grasp of basic insurance doctrine and contract law. As a general matter, Posner also displays considerably …

Recent Case Developments, Jeffrey W. Stempel

Scholarly Works

Recent case developments in Insurance Law in the years 1999 and 2000.

Recent Case Developments, Jeffrey W. Stempel

Scholarly Works

Recent case developments in Insurance Law in the years 1999 and 2000.

Unreason In Action: A Case Study In The Wrong Approach To Construing The Liability Insurance Pollution Exclusion, Jeffrey W. Stempel

Scholarly Works

For more than twenty-five years, a significant component of the scholarly commentary on insurance law has focused on the so-called “reasonable expectations doctrine” enunciated by then-Professor (now Judge) Robert Keeton in his justly celebrated 1970 article. The reasonable expectations principle made a seemingly sudden emergence with the appearance of Keeton's article and has held particular attraction to academics while simultaneously prompting resistance from elements of the bench and bar, and particularly from the insurance industry. The doctrine's life to date can be described as one of early growth followed by subsequent retreat and dilution, with continuing controversy.

However, despite the …

Unmet Expectations: Undue Restriction Of The Reasonable Expectations Approach And The Misleading Mythology Of Judicial Role, Jeffrey W. Stempel

Scholarly Works

A complete and open embrace of the pure version of the doctrine as enunciated in Judge Keeton's famous article--which expressly provides for finding coverage consistent with the objectively reasonable expectations of the policyholder even where those expectations are contradicted by apparently clear policy language --is viewed by much of the legal and political mainstream as too inconsistent with the prevailing American paradigm of judicial restraint, strict construction of disputed texts, and minimal government involvement in market activity. Some of this resistance to reasonable expectations is the product of an unrealistic reification of the prevailing American politico-legal philosophy of judicial restraint. …

Recent Case Developments, Jeffrey W. Stempel

Scholarly Works

Recent case developments in Insurance law in the year 1998.

Interpreting Insurance Policies, Jeffrey W. Stempel

Scholarly Works

Like any other contract, an insurance policy may become the subject of a legal dispute. When disputes arise over insurance coverage, lawyers must combine their skill in contract interpretation with their knowledge of insurance law, bringing both to bear on the special problems related to this type of contract. Each dispute has unique traits, but a few basic ground rules of contract law and insurance law can help you interpret insurance policies and resolve disputes over insurance coverage.