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

Mealey's Emerging Insurance Disputes

November 08, 2023
Judge Modifies Class In Driver’s Suit Against GEICO For Unfair COVID Premiums

SAN FRANCISCO — A California federal judge on Nov. 7 granted an insured’s motion to modify a previously certified class of automotive policy holders in the insured’s suit claiming that GEICO violated California’s unfair competition law (UCL) by profiting from a premium giveback program initiated during the COVID-19 pandemic, with the judge agreeing based on evidence produced to change the class time period.
November 08, 2023
Louisiana Panel: Professional Liability Insurer Of Engineer Cannot Be Held Liable

BATON ROUGE, La. — A Louisiana appeals court panel concluded 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, affirming 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.
November 08, 2023
Settlement Reached In Coverage Row With Care Home, Insurer, Ancillary Care Company

ASHEVILLE, N.C. — A nursing home and an ancillary care company and its insurer on Nov. 7 filed a stipulation of dismissal in North Carolina federal court advising that they settled the nursing home’s breach of contract suit against the company and insurer seeking to have them indemnify and defend the nursing home in an underlying arbitration proceeding related to the death of a former resident.
November 08, 2023
California Panel Affirms Ruling In Equitable Contribution Suit Between Insurers

FRESNO, Calif. — A California appeals panel held that the undisputed evidence establishes that insureds knew that “bodily injury” and “property damage” asserted in an underlying complaint occurred before the inception of a defendant commercial general liability insurer’s policy period, affirming a lower court’s judgment in favor of the defendant CGL insurer in an equitable contribution lawsuit brought by another CGL insurer.
November 07, 2023
Judge Allows Law Firm To Intervene To Enforce Lien Against D&O Policy Proceeds

SAN JOSE, Calif. — A federal judge in California 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, permitting the firm to enforce a charging lien against the proceeds of the policy.
November 07, 2023
Prompted By Insurer’s Notice, Magistrate Dismisses CGL Coverage Dispute

BALTIMORE — Three days after a commercial general liability insurer filed a notice to dismiss, a federal magistrate judge in Maryland on Nov. 6 signed an order dismissing the insurer’s complaint disputing coverage for a lawsuit alleging that a city employee who was working as a security guard at the Baltimore Convention Center observed and filmed minors while they were undressing in a dressing area during a dance competition at the center.
November 06, 2023
4th Circuit Tosses Appeal In COVID-19 Coverage Suit After Parties Agree To Dismiss

RICHMOND, Va. — One day after an insured and its insurer filed a stipulation of voluntary dismissal, the Fourth Circuit U.S. Court of Appeals dismissed the insured’s appeal of a Maryland federal court’s denial of its motion for leave to file a second amended complaint to address the standard for physical loss that was provided by the Maryland Supreme Court in answer to a certified question in a COVID-19 coverage dispute.
November 06, 2023
Judge Dismisses Counterclaims Against Insurers, Subcontractor In Worker Injury Suit

NEW YORK — A New York federal judge granted a subcontractor and excess insurers’ motion to dismiss counterclaims and cross-claims brought against them by a contractor and a construction manager in the subcontractor’s lawsuit seeking coverage for claims brought by two of its workers.
November 03, 2023
3rd Circuit Denies Insurers’ Motion To Stay In Dispute Over Boy Scouts’ Plan

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Nov. 3 denied certain insurers’ and two sets of abuse claimants’ motions to stay further implementation of the Boy Scouts of America’s third modified, fifth amended Chapter 11 reorganization plan, which contemplates the creation of a settlement trust to “assume liability for all Abuse Claims,” rejecting the insurers’ argument that the U.S. Supreme’s Court’s forthcoming ruling in Harrington v. Purdue Pharma, L.P. on the permissibility of nonconsensual releases to nondebtors may overturn Third Circuit precedent and decide whether the bankruptcy plan can move forward.
November 02, 2023
9th Circuit Affirms Dismissal Of Vizio’s 4th Amended Complaint On Other Grounds

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of Vizio Inc.’s fourth amended complaint seeking coverage for an underlying $17 million settlement and defense costs arising from class claims alleging unauthorized collections of consumers’ television viewing data, finding that Vizio breached the insurance policy by not soliciting the excess insurer’s consent before settling the underlying lawsuit.
November 02, 2023
Panel Refuses To Reconsider Remand Of Class Action Challenging Insurer’s Practice

CHICAGO — The Seventh Circuit U.S. Court of Appeals denied an insurer and its directors and officers’ petitions for rehearing en banc seeking review of its holding that a class action challenging the insurer’s practices fits within the internal affairs and home state controversy exceptions to the Class Action Fairness Act (CAFA), standing by its reversal of a lower federal court’s denial of the insured’s motion to remand.
November 01, 2023
Employer Seeks Coverage For Class Action Suit Alleging BIPA Violations

CHICAGO — An employer sued its insurer in an Illinois federal court seeking commercial general liability and umbrella insurance coverage for an underlying putative class action alleging that it violated the Illinois Biometric Information Privacy Act (BIPA) by disseminating electronic information derived from the scanning of its employees’ biometric identifiers to third parties without their consent.
October 30, 2023
Federal Judge Dismisses Coverage Suit Over Tenants’ Claims Against Mutual Insured

OAKLAND, Calif. — Three days after a plaintiff insurer and a defendant commercial general liability insurer filed a stipulation for dismissal of a declaratory judgment lawsuit arising from an underlying action alleging that their mutual insured attempted to drive tenants out of their units, a federal judge in California dismissed the lawsuit with prejudice.
October 30, 2023
Maritime Insurer Seeks Rehearing In Suit Seeking Recoupment Of Benefits Paid

NEW ORLEANS — An insurer seeks a panel rehearing challenging the Fifth Circuit U.S. Court of Appeals’ ruling that it has a duty to pay the maintenance and cure under a maritime protection and indemnity (P&I) insurance policy for a seaman’s injuries that he incurred while employed on a lift boat, arguing that the court’s ruling “draws a line” in P&I coverage and that this line “will create significant challenges in the marine insurance industry for both underwriters and assureds.”
October 30, 2023
Harvard Sues Broker For Failing To Notify Excess E&O Insurers Of ‘Major’ Claim

BOSTON — President and Fellows of Harvard College sued its insurance broker in a Massachusetts court for malpractice, breach of contract and declaratory relief, seeking damages for the broker’s alleged failure to provide notice to Harvard’s excess errors and omissions insurers of an underlying action alleging that its consideration of a student’s race in its college admissions process violated Title VI of the Civil Rights Act.
October 27, 2023
Contractor Did Not Timely Report Claim; No Professional Liability Coverage Owed

LOS ANGELES — A California appeals panel affirmed a lower court’s summary judgment ruling in favor of a professional liability insurer in a contractor insured’s breach of contract and bad faith lawsuit, finding that the insured failed to timely report underlying counterclaims for negligence, delay, breach of contract, construction defects and failure to complete construction.
October 26, 2023
Panel Affirms Ruling For Insurer In Coverage Dispute Arising From Battery Fire

SAN DIEGO — A California appeals panel concluded that insureds failed to present a triable issue of material fact as to their breach of contract claim against their insurer, affirming a lower court’s grant of summary judgment in favor of the insurer in a coverage dispute arising from damage caused by a lithium battery that caught on fire.
October 25, 2023
8th Circuit Refuses To Reconsider Remand Of Coronavirus Coverage Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Oct. 24 denied an insurer’s petition seeking rehearing or rehearing en banc of its Sept. 11 ruling that reversed and remanded a coronavirus coverage ruling for an Iowa federal court to determine whether federal diversity jurisdiction exists.
October 24, 2023
Judgment Granted For Lessee In $2.5M Insurance Fraud Row Involving Chris Brown

MEMPHIS, Tenn. — A Tennessee federal judge on Oct. 23 granted summary judgment to the lessee of a recording studio owned by musician Chris Brown, who was previously found liable for submitting a fraudulent insurance claim for burglary and fire at his studio, finding that claim preclusion prevents the insurer from asserting claims against the lessee, who had received a $2.5 million jury award.
October 24, 2023
Court Erred In Finding Exclusion Barred D&O Coverage, Panel Says In Reversal

CHICAGO — An Illinois appeals panel reversed a lower court’s finding that an insurance policy’s exclusion for insureds’ failure to “establish or maintain adequate reserves” barred directors and officers liability coverage for an underlying breach of fiduciary lawsuit that condominium unit owners brought against a condominium association and its directors.
October 23, 2023
Lawyer Insured: Panel’s Ruling Guts Professional Liability Insurer’s Duty To Defend

NEW YORK — A lawyer insured on Oct. 21 filed a petition for rehearing en banc seeking to reverse the Second Circuit U.S. Court of Appeals’ ruling that a professional liability insurer has no duty to defend its construction management company against a lawsuit arising from a home renovation project because the underlying complaint fails to allege professional services that the insured provided as a lawyer to trigger coverage, arguing that the panel’s decision “abrogates decades of black-letter New York insurance law that favors insureds, effectively gutting an insurer’s duty to defend.”
October 23, 2023
Insurer Says Coverage Suit Over Legionnaire’s Disease Should Stay In Federal Court

LOUISVILLE, Ky. — A Kentucky federal court should exercise its discretion and permit an insurer’s declaratory judgment suit to proceed because litigating the issue of coverage in federal court is more judicially efficient than transferring the suit to a state court where the underlying bodily injury suit arising out of an apartment tenant’s contraction of Legionnaire’s disease is pending, the insurer says in its response to a motion to dismiss.
October 23, 2023
5th Circuit Affirms Refusal To Remand And Dismissal Of Coronavirus Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower federal court’s denial of insureds’ motion to remand a coronavirus coverage dispute and its grant of the commercial property insurer’s motion to dismiss a breach of contract lawsuit seeking coverage for losses arising from the coronavirus pandemic, finding that the insureds failed to plausibly plead that the coronavirus caused direct physical damage to their insured property.
October 23, 2023
Insurer And Its Officers Challenge 7th Circuit’s Remand Of Class Action

CHICAGO — An insurer and its directors and officers filed petitions for rehearing en banc seeking review of the Seventh Circuit U.S. Court of Appeals’ holding that a class action challenging the insurer’s practices fits within the internal affairs and home state controversy exceptions to the Class Action Fairness Act (CAFA), challenging the panel’s reversal of a lower federal court’s denial of the insured’s motion to remand.
October 23, 2023
7-Eleven Seeks Coverage For Bodily Injury Lawsuit Involving Store Employee

MIAMI — A 7-Eleven sued its insurers for declaratory relief in a federal court in Florida, seeking general liability and liquor liability coverage for a customer’s underlying bodily injury lawsuit alleging that a 7-Eleven employee physically struck him numerous times.