Mealey's Emerging Insurance Disputes : Mealey's : Legal News & Analysis

Mealey's Emerging Insurance Disputes

December 14, 2023
Question Certified To Florida High Court In Coverage Suit Over Hate Mail

WEST PALM BEACH, Fla. — A Florida appeals court panel majority on Dec. 13 certified a question to the Florida Supreme Court regarding the state’s pleading requirement for punitive damages claims and reiterated in its substituted opinion that a trial court improperly granted residential community residents’ motions to amend their counterclaims to seek punitive damages against a fellow resident, his insurer and the insurer’s in-house counsel.
December 13, 2023
Duke Sues Insurers In N.C. Court, Seeks D&O Coverage For Antitrust Settlement

RALEIGH, N.C. — Duke University filed suit in a North Carolina court seeking directors and officers liability coverage for its settlement of an underlying antitrust lawsuit, arguing that the primary insurer’s no-coverage position cannot be squared with its insurance “policy’s express antitrust coverage grant” and the absence of any exclusions for restitution or disgorgement.
December 13, 2023
Panel: Insured’s Argument In COVID-19 Dispute ‘Runs Into A Wall Of Precedent’

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of an insurer’s motion to dismiss an insured’s lawsuit seeking coverage for its losses arising from the shutdown of its event venue in response to the coronavirus pandemic, finding that the insured has failed to plausibly assert any “direct physical loss of or damage to” its property.
December 12, 2023
Minnesota Panel: Insured Failed To Allege Coronavirus Was Present At Its Properties

ST. PAUL, Minn. — A Minnesota appeals panel on Dec. 11 affirmed a lower court’s ruling dismissing an insured’s breach of contract lawsuit against its insurers, finding that the insured failed to assert that the coronavirus was present at and contaminated its insured casino and golf course properties and, therefore, it did not cause direct physical loss or damage.
December 12, 2023
Court Lacked Authority To Coordinate Not-Yet-Filed COVID-19 Coverage Suits

PITTSBURGH — A majority of the Pennsylvania Supreme Court held that Pennsylvania Rule of Civil Procedure 213.1 does not allow the coordination of actions that have not been filed at the time of the motion for coordination and that an insurer waived its argument that insureds were not entitled to seek coordination in the first place, affirming a Superior Court’s partial reversal of a lower court’s order coordinating coronavirus coverage lawsuits against Erie Insurance Exchange in the Allegheny County Court of Common Pleas.
December 12, 2023
Dental Practice Incurred No Direct Physical Loss, Insurers Argue To Pa. High Court

PITTSBURGH — Insurers filed a reply brief in the Pennsylvania Supreme Court defending their appeal of a Pennsylvania Superior Court majority’s ruling that at the very least, it is reasonable to interpret the phrase “direct physical loss of . . . property” to encompass the loss of use of a dental practice’s property due to the spread of the coronavirus “absent any actual damage to property.”
December 12, 2023
Insured Failed To Show Coronavirus Is A Pollution Condition, Panel Says

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeal on Dec. 11 affirmed a district court’s ruling that no coverage is owed to an insured for business interruption losses sustained as a result of the COVID-19 pandemic because the insured failed to show that the coronavirus qualifies as a pollution condition as required by the policy at issue.
December 12, 2023
California Judge Sustains Insurer’s Demurrer To Nonprofit’s COVID-19 Coverage Suit

LOS ANGELES — A California judge sustained an insurer’s demurrer to its nonprofit insured’s breach of contract, bad faith, negligent misrepresentation and declaratory relief complaint seeking coverage for its losses arising from the coronavirus pandemic, holding that the coronavirus and the subsequent governmental orders “are inextricably intertwined.”
December 12, 2023
Panel: Professional Services Exclusion Bars CGL Coverage For Defamation Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of a commercial general liability insurer in an errors and omissions insurer’s lawsuit seeking a declaration that the CGL insurer has a duty to defend their mutual insured against an underlying defamation lawsuit, finding that the CGL policy’s financial professional services exclusion bars coverage.
December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
December 11, 2023
2nd Circuit Dismisses Appeals In D&O Coverage Dispute For Want Of Jurisdiction

NEW YORK — The Second Circuit U.S. Court of Appeals on Dec. 11 dismissed an insurer’s appeal and an insured’s cross-appeal in a directors and officers liability coverage dispute arising from underlying proceedings brought by a bankruptcy trustee, finding that a lower federal court’s “Stipulated Conditional Final Judgment Subject to Reservation of Rights of Appeal” is not a “final decision” because it fails to resolve all claims of all of the parties to the lawsuit.
December 08, 2023
8th Circuit Reverses Ruling In Coverage Dispute Over Construction Site Accident

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals reversed a lower court’s grant of partial summary judgment in favor of an engineer insured in an insurer’s lawsuit disputing coverage for an underlying $2.5 million construction worker injury settlement arising from a bridge deck collapse, finding that summary judgment is unavailable because coverage hangs on the resolution of a factual dispute over the insured’s role on the construction project.
December 08, 2023
2nd Circuit: Insurer Not Obligated To Defend Lawyer In Underlying Elder Abuse Suit

NEW YORK — The Second Circuit U.S. Court of Appeals on Dec. 7 affirmed a district court’s grant of judgment on the pleadings to an insurer seeking a declaration that it is not obligated to defend or indemnify a law firm and former partner accused of malpractice, breach of fiduciary duty, elder abuse and fraud in an underlying suit related to a land sale to the former partner’s company, finding that the lower court correctly determined that the policy exclusion related to activities of another business applied.
December 07, 2023
Majority: Insurance Code Does Not Bar Indemnification For Retaliation Settlement

LOS ANGELES — Addressing an “important” question of first impression “whose answer will influence enforcement of our employment laws,” a majority of a California appeals court held Dec. 6 that not all California Labor Code Section 1102.5 claims involve necessarily willful conduct and, therefore, a lower court erred in finding that California Insurance Code Section 533 barred indemnification for a $3 million underlying settlement of police officers’ retaliation lawsuit against a California city.
December 06, 2023
Federal Judges Tosses D&O Coverage Suit After Parties Move For Dismissal

WILMINGTON, Del. — A federal judge in Delaware dismissed a directors and offices coverage dispute arising from an underlying investigation by the Securities and Exchange Commission after the insured and the insurer stipulated to dismissal of the entire action.
December 06, 2023
COMMENTARY: The Seventh Circuit Affirms Landmark BIPA Decision In Illinois

By J. Andrew Moss and Jalen Brown
December 05, 2023
Insurer Seeks Reimbursement From Government For Losses Caused By Contaminated Water

HONOLULU — In a complaint filed in Hawaii federal court, an insurer claims that the U.S. government must reimburse it for more than $500,000 paid to its insured for business losses after a fuel spill at a jet fuel storage facility operated by the U.S, Navy contaminated local drinking water and forced the insured to close its fast food restaurants for approximately four months.
December 04, 2023
Wisconsin Panel Says Counterclaims Against Insured Arose Out Of An Occurrence

MADISON, Wis. — The Fourth District Wisconsin Court of Appeals reversed a trial court’s finding that counterclaims alleged against an insured do not state an occurrence because the factual bases for the counterclaims arose out of an occurrence for which coverage is afforded under the insured’s commercial general liability insurance policy.
December 04, 2023
Insured Failed To Timely Report Employee’s Claims, California Panel Affirms

RIVERSIDE, Calif. — A California appeals panel concluded that a lower court properly sustained an insurer’s demurrer in an insured’s breach of contract and bad faith lawsuit seeking coverage for underlying claims brought by a former employee, determining that the insured failed to timely report any of the employee’s claims to trigger coverage.
December 01, 2023
Delaware Judge Denies Assignees’ Motion To Compel In Wrongful Death Coverage Suit

NEW CASTLE, Del. — A Delaware judge refused to compel a homeowners insurer to produce the claim file of a convicted murderer’s parents in a breach of contract and bad faith lawsuit seeking coverage for an underlying wrongful death lawsuit that resulted in a $15,816,580 arbitration award, finding that the murderer’s assignees failed to demonstrate that the parents’ claim file is relevant to the coverage lawsuit.
December 01, 2023
Federal Judge Denies Insurer’s Motion To Certify Orders For Interlocutory Appeal

BOSTON — A federal judge in Massachusetts in a Nov. 30 electronic order denied a private company management liability insurer’s motion to certify orders for interlocutory appeal and to stay proceedings after ruling Nov. 9 that the insurer has a duty to defend against certain claims that fall under the “Former Directors and Officers” exception to the policy’s “Insured v. Insured” exclusion but other claims are barred by not falling within the “Shareholder Derivative” exception to the same exclusion.
December 01, 2023
No Coverage Owed For Unauthorized Timbering Suit, West Virginia Panel Affirms

CHARLESTON, W.Va. — A West Viriginia appeals panel affirmed a lower court’s ruling in favor of a homeowners insurer in an insured’s lawsuit seeking coverage for underlying claims for timber theft and property damage brought by her neighbors, finding that the policy’s business exclusion barred coverage.
November 30, 2023
Panel Refuses To Rehear Rulings In Favor Of Professional Liability Insurer, Engineer

BATON ROUGE, La. — A Louisiana appeals panel refused to reconsider its affirmation of a lower court’s summary judgment rulings in favor of the insurer and engineer in a lawsuit arising from a contractor’s claims that plans, specifications and bidding documents were inadequate and insufficient to properly construct a road in Terrebonne Parish, standing by its conclusion that because an engineer insured has no liability to Terrebonne Parish Consolidated Government (TPCG) as a matter of law, the engineer’s professional liability insurer also cannot be held liable to TPCG.
November 30, 2023
Judge Refuses To Reconsider Ruling Allowing Law Firm To Intervene In D&O Dispute

SAN JOSE, Calif. — A federal judge in California refused to reconsider its Nov. 3 ruling that granted a law firm’s motion to intervene in an insurer’s lawsuit seeking a declaration that a directors and officers employment practices liability and fiduciary liability policy is rescinded because of the insureds’ material misrepresentations, standing by its decision to permit the firm to enforce a charging lien against the proceeds of the policy.
November 30, 2023
No Coverage Owed For Breach Of Franchise Agreement, Trademark Infringement Claims

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of insurers in an insured’s breach of contract and bad faith lawsuit seeking coverage for an underlying action alleging that it breached a franchise agreement and infringed on trademarks, finding that some of the underlying claims “clearly fell outside the policy's coverage” and that the policy’s intellectual property (IP) exclusion also barred coverage.