{"id":900980,"date":"2023-03-22T11:05:58","date_gmt":"2023-03-22T17:05:58","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900980"},"modified":"2023-03-22T11:06:04","modified_gmt":"2023-03-22T17:06:04","slug":"choice-of-law-insurance-dispute","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/choice-of-law-insurance-dispute\/","title":{"rendered":"Supreme Court Takes on Insurance Dispute"},"content":{"rendered":"\n<p>Lara Degenhart Cassidy and Adriana Perez | <a href=\"https:\/\/www.huntoninsurancerecoveryblog.com\/2023\/03\/articles\/bad-faith\/supreme-court-takes-on-insurance-dispute\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Hunton Andrews Kurth<\/a><\/p>\n\n\n\n<p>On Monday, March 6, the US Supreme Court agreed to hear an insurance coverage dispute,\u00a0<em>Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC<\/em>.\u00a0 Insurance cases are few and far between in the high court, so both policyholders and their insurers will be watching the\u00a0<em>Great Lakes<\/em>\u00a0case with great interest.\u00a0 Notably, while the case involves the specialized area of maritime law, how the Supreme Court chooses to address the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/conflict-between-choice-of-law-provision-and-fundamental-public-policy\/\" target=\"_blank\" rel=\"noreferrer noopener\">choice-of-law issue<\/a> it presents could have much broader implications.<\/p>\n\n\n\n<p>The&nbsp;<em>Great Lakes<\/em>&nbsp;case calls upon the Supreme Court to consider whether the \u201cstrong public policy\u201d of a state where a case is filed can override the presumptive validity of a choice-of-law provision in a maritime insurance contract.&nbsp; That staid legal issue does not tell the whole story, however.&nbsp; In&nbsp;<em>Great Lakes<\/em>, the parties are arguing about whether the choice-of-law provision in a shipowner\u2019s insurance policy governs the state law that applies to the shipowner\u2019s extra-contractual \u201cbad faith\u201d claims against its insurer, which refused to pay damages after a ship ran aground.&nbsp; Different states apply vastly different legal standards to determine whether an insurer denied coverage in bad faith,&nbsp;and deciding which state\u2019s law applies can be outcome determinative.&nbsp; Here, the insurer says that the choice-of-law provision in the policy (which favors New York law) is inviolable under federal maritime law and voids the bad faith claims the policyholder pleaded under Pennsylvania law.&nbsp; The shipowner disagrees, arguing that Pennsylvania, the state where the insurance coverage case is filed, has a \u201cstrong public policy\u201d of holding insurers liable for their bad-faith conduct, making the New York choice-of-law provision unenforceable. &nbsp;Both sides rely on different long-standing Supreme Court maritime-law precedent for their respective positions.<\/p>\n\n\n\n<p>The insurer asked the Supreme Court to take the&nbsp;<em>Great Lakes<\/em>&nbsp;case on appeal from the Third Circuit, which sided with the shipowner that the maritime choice-of-law provision would have to give way if the forum state of \u201cPennsylvania has a strong public policy that would be thwarted by applying New York law.\u201d&nbsp; In its decision, the Third Circuit also alluded to the \u201cmore intriguing argument\u201d that the choice-of-law provision in the maritime insurance policy, even if valid, did not unambiguously dictate that New York law applied to the shipowner\u2019s extra contractual bad-faith claims.&nbsp; The Third Circuit declined to reach the ambiguity issue, however, because the policyholder had not raised it in the district court case.<\/p>\n\n\n\n<p>How the Supreme Court addresses the choice-of-law issue here could have significant ramifications not only for maritime cases going forward, but also for other disputes over choice-of-law provisions.\u00a0 On one hand, the Court could narrowly conclude that federal maritime law upholds choice-of-law provisions as to both contractual and extra contractual claims, irrespective of any potential conflicts with forum state law.\u00a0 That ruling might be confined to the maritime-law space.\u00a0 Alternatively, however, the Court could decide, as did the Third Circuit, that a choice-of-law provision cannot be used to thwart the public policy of the forum state, particularly in the context of state-law-dependent insurance claims.\u00a0 This latter approach, even if couched in the maritime law framework in\u00a0<em>Great Lakes<\/em>, would no doubt embolden parties to challenge the application of choice-of-law provisions that conflict with forum state law in a wide variety of insurance disputes.\u00a0 As a result, court watchers anticipate that policyholder and insurance groups alike will seek permission to submit amicus arguments to the Court supporting their respective views.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lara Degenhart Cassidy and Adriana Perez | Hunton Andrews Kurth On Monday, March 6, the US Supreme Court agreed to hear an insurance coverage dispute,\u00a0Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC.\u00a0 Insurance cases are few and far between in the high court, so both policyholders and their insurers will be watching the\u00a0Great&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/choice-of-law-insurance-dispute\/\">Continue reading <span class=\"screen-reader-text\">Supreme Court Takes on Insurance Dispute<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10721],"tags":[9895,10971,330],"class_list":["post-900980","post","type-post","status-publish","format-standard","hentry","category-insurance","tag-advise-consult","tag-choice-of-law-provisions","tag-insurance-dispute","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Supreme Court Takes on Insurance Dispute - Advise &amp; 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