Inspection of corporate records, insurance coverage under homeowner’s policy for negligent failure to prevent sex abuse

by Stephen on June 26, 2010

Ok, the idea here is that I am going to blog about the new Court of Appeals cases that are relevant to my practice.  I read the new cases pretty much every day to make sure I am up to date with my legal knowledge, and to help with my issue spotting.  I will be catching up on some reports that I have been saving while we (my crack webmasters, my daughter and her boyfriend) were getting this blog set up.

6/18/10

Wolf v. CDS Devco:  Wolf, a director of a subsidiary corporation, frequently demanded to inspect the corporation’s financial records.  Wolf was also a shareholder of the corporation’s parent corporation.  A meeting of the subsidiary’s shareholders (the parent) was held to remove Wolf as a director of the subsidiary.  Prior to the meeting, Wolf sued for a declaration that he be allowed to continue inspecting the subsidiary’s financial records.  Held:  After he was removed as a director, Wolf lacked standing to inspect the subsidiary’s financial records.

Minkler v. Safeco Insurance Co.:  Minkler sued David Schwartz and Minkler’s mother, Betty Schwartz, alleging that David had sexually molested him and that Betty was negligent in her supervision of David.  Betty tendered defense to her homeowners insurance provider, Safeco.  Safeco’s policies over the years, on the one hand excluded coverage for intentional acts of “an insured”, and acts of “an insured” from which injury was “expected or intended.” On the other hand, Safeco’s policy had a severability-of-interests or “separate insurance” clause stating that “this insurance applies separately to each insured.”  Safeco denied coverage on the ground that David was “an insured”  and that therefore his intentional acts were excluded.  In the insurance coverage lawsuit which followed, the court held that the “separate insurance” clause creates an ambiguity, applied the familiar rule that ambiguities in an insurance policy are to be construed in favor of the insured, and thus held that the homeowners’ policies provided liability coverage and a duty to defend Betty from Minkler’s lawsuit.

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