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Mealey's Emerging Insurance Disputes

  • July 17, 2019

    9th Circuit:  Insurer Breached Contract When It Denied Coverage Under War Exclusions

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 12 reversed a lower federal court’s finding that war exclusions in a motion picture/television producers portfolio insurance policy bar coverage for the expenses a production company incurred in postponing and subsequently relocating the production of the television show "Dig" from Israel because of conflict in summer 2014, finding that the insurer breached the policy when it denied coverage by defining the conflict as “war” and “warlike action by a military force” (Universal Cable Productions LLC, et al. v. Atlantic Specialty Insurance Co., No. 17-56672, 9th Cir., 2019 U.S. App. LEXIS 20704).

  • July 17, 2019

    School District Coverage Suit Arising From Harassment, Retaliation Claims Dismissed

    PINE BLUFF, Ark. — A federal judge in Arkansas on July 12 held that a math teacher’s Equal Employment Opportunity Commission charge and subsequent lawsuit alleging sexual harassment and retaliation constitute a single claim that was “first made” against a school district insured  during a 2015 policy period, finding that there is no coverage because the insured did not timely report the claim to the insurer (Pine Bluff School District v. ACE American Insurance Company, No. 18-00185, E.D. Ark., 2019 U.S. Dist. LEXIS 116167).

  • July 17, 2019

    Assault And Battery Exclusion Bars Coverage For Shooting, Federal Judge Says

    BIRMINGHAM, Ala. — A federal judge in Alabama on July 9 found that a restaurant insured breach an insurance policy’s notice provisions by failing to timely report a claim arising from an underlying shooting, further finding that the policy’s assault and battery exclusion further bars coverage (Evanston Insurance Company v. The Break I, Inc., et al., No. 18-01197, N.D. Ala., 2019 U.S. Dist. LEXIS 113109).

  • July 17, 2019

    Prior Acts/Prior Notice Exclusion Does Not Bar Coverage, Delaware Judge Rules

    WILMINGTON, Del. — In an opinion filed under seal, a Delaware judge on July 9 held that a health care facility’s concurrent excess liability insurance policy’s prior acts or prior notice exclusion does not preclude coverage for an underlying class action challenging the constitutionality of an insured’s subsidiary's private probationary services because the class action is significantly different from one filed five years before (Providence Service Corporation v. Illinois Union Insurance Company, No. 18C-06-114, Del. Super.).

  • July 17, 2019

    Assignee Appeals Ruling That TCPA Violations Arise Out Of ‘Invasion Of Privacy’

    WEST PALM BEACH, Fla. — An insured’s assignee on July 2 filed a notice of appeal to the 11th Circuit U.S. Court of Appeals challenging a federal district court’s finding that coverage for an underlying $60,413,112 consent judgment entered against the insured in a Telephone Consumer Protection Act (TCPA) violation dispute is barred by the insurance policy's "invasion of privacy" exclusion (Jacob Horn, et al. v. Liberty Insurance Underwriters, Inc., No.18-80762, S.D. Fla.).

  • July 17, 2019

    Judge: Failure To Provide Suitable Prosthetic Leg Does Not Qualify As ‘Occurrence’

    LOUISVILLE, Ky. — A federal judge in Kentucky on July 11 held that an insured’s alleged failure to provide a customer with a suitable prosthetic leg does not qualify as an “occurrence” under a commercial general liability insurance policy and dismissed the insured’s lawsuit seeking coverage for the underlying claims (Matthew Hayden, et al. v. Benchmark Insurance Company, et al., No. 19-00154, W.D. Ky., 2019 U.S. Dist. LEXIS 115948).

  • July 8, 2019

    COMMENTARY: The Surety Company’s Guide To Mitigating False Claims Act Risks

    By David B. Robbins and Jason M. Crawford

  • July 16, 2019

    No Excess Coverage For Insurer’s Receiver’s Clawback Claim, Judge Finds

    TAMPA, Fla. — Because an illegal advantage exclusion applies and a clawback claim filed by an insurer’s receiver was not a claim for a “wrongful act,” a Florida federal judge ruled July 12 that an excess insurer has no duty to defend or indemnify its insured (Akshay M. Desai v. Navigators Insurance Co., No. 18-1843, M.D. Fla., 2019 U.S. Dist. LEXIS 115897).

  • July 16, 2019

    ‘Violation Of Any Statute’ Exclusion Bars Coverage, Kentucky Majority Affirms

    FRANKFORT, Ky. — A majority of the Kentucky Court of Appeals on July 12 affirmed a lower court’s ruling that an insurance policy’s “violation of any statute” exclusion bars coverage for an underlying negligence lawsuit brought against a preschool and its owner (Brianna Robinson v. Monroe Guarantee Insurance Company, et al., Nos. 2016-CA-001667 and 2016-CA-001668, Ky. App., 2019 Ky. App. Unpub. LEXIS 500).

  • July 15, 2019

    Federal Judge:  Lack Of Coverage Compels Dismissal Of All Claims Against Insurer

    DENVER — A Colorado federal judge on July 10 granted a homeowners insurer’s motion to dismiss a lawsuit brought by an assignee of its insureds, finding that the lack of coverage that is apparent from the underlying allegations compels dismissal of all of the assignee’s claims as a matter of law (Paul Dreyer, et al. v. American National Property & Casualty Co., No. 18-03334, D. Colo., 2019 U.S. Dist. LEXIS 114772).

  • July 15, 2019

    Pennsylvania Court:  Business Pursuits Exclusion Inapplicable; Coverage Triggered

    HARRISBURG, Pa. — A Pennsylvania appellate panel on July 11 held that an insurer has failed to establish that a personal umbrella liability insurance policy’s “business pursuits” exclusion applies to bar coverage, affirming a lower court’s finding that the insurer has a duty to defend its insured but reversing the lower court’s order to the extent it imposes an absolute duty on the insurer to indemnify its insured (Nationwide Mutual Insurance Company v. August W. Arnold, et al., No. 1207 WDA 2018 and 1208 WDA 2018, Pa. Super., 2019 Pa. Super. LEXIS 692).

  • July 12, 2019

    Insurer Did Not Engage In Unfair Settlement Practices, Maryland Panel Affirms

    ANNAPOLIS, Md. — A Maryland appeals panel on July 9 affirmed the Maryland Insurance Administration (MIA)’s finding that appellants failed to prove by a preponderance of evidence that an insurer engaged in unfair settlement practices based on the insurer’s “careful consideration (and reconsideration) of the claim and explanation of its denial,” as well as the MIA's concluding that the insurer’s position is "sound and supported by the evidence” (Samuel J. McCollum, et ux. v. Maryland Insurance Administration, et al., No. 290, September Term, 2018, Md. App., 2019 Md. App. LEXIS 567).

  • July 12, 2019

    Judge: Advertising Injury Exclusion Bars Coverage For Trademark Infringement Suit

    CHARLOTTESVILLE, Va. — A senior federal judge in Virginia on July 8 held that businessowners insurance policies unambiguously exclude coverage for personal and advertising injury and, as result, the insurer has no duty to defend or indemnify its gaming company insured against an underlying trademark and trade dress infringement lawsuit brought by a competitor (Hanover Insurance Co. v. Castle Hill Studios, LLC, et al., No. 18-00072, W.D. Va., 2019 U.S. Dist. LEXIS 112150).

  • July 12, 2019

    Panel: No Coverage Owed For Defamation, Negligence Claims Arising From Sexual Abuse

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on July 10 affirmed a lower federal court’s ruling that a homeowners insurer has no duty to defend or indemnify underlying negligence and defamation claims because the policy's exclusion for damages “arising out of” sexual abuse covered all claims regardless of the theory of liability or relevant actor (United Property & Casualty Insurance v. Mary Roe, No. 18-2049, 4th Cir., 2019 U.S. App. LEXIS 20415).

  • July 11, 2019

    Third-Party Claimant Not Entitled To Bad Faith Damages Under Policy

    NEW ORLEANS — In an unpublished per curiam opinion, a Fifth Circuit U.S. Court of Appeals panel on July 9 ruled that a federal district court did not err in dismissing a third-party claimant’s insurance bad faith lawsuit against an insurer because the claimant was not an insured under a professional liability policy (Team Contractors LLC v. Waypoint Nola LLC v. Catlin Insurance Co. Inc., No. 18-30419, 5th Cir., 2019 U.S. App. LEXIS 20317).

  • July 11, 2019

    Insured Fails To Show Claims Constitute Disparagement, Defamation, 3rd Circuit Says

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on July 10 affirmed a lower federal court’s finding that an insurer has no duty to defend its insured against an underlying lawsuit alleging false advertising and unfair competition because the insured failed to establish that the underlying claims constitute disparagement or defamation to trigger coverage (Albion Engineering Company v. Hartford Fire Insurance Company, No. 18-1756, 3rd Cir., 2019 U.S. App. LEXIS 20488).

  • July 9, 2019

    School Leaders Errors And Omission Liability Coverage Barred, 6th Circuit Affirms

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on July 3 affirmed a lower federal court’s ruling that primary and umbrella insurers do not owe “School Leaders Errors & Omission Liability Coverage" for an underlying $4,199,812 judgment in favor of a school district in its negligence lawsuit against its former superintendent (Cuyahoga Heights Local School District v. Netherlands Insurance Company, et al., No. 18-4037, 6th Cir., 2019 U.S. App. LEXIS 19900).

  • July 9, 2019

    Specific Litigation Exclusion Bars Coverage For Brokers’ Claims, 1st Circuit Affirms

    BOSTON — The First Circuit U.S. Court of Appeals on July 3 affirmed a lower federal court’s ruling that an insurance policy’s specific litigation exclusion barred all coverage claims brought by two broker-dealers because the claims overlapped with previous cases filed against them (UBS Financial Services, Inc. of Puerto Rico, et al. v. XL Specialty Insurance Co., et al., No. 18-1148, 1st Cir., 2019 U.S. App. LEXIS 19946).

  • July 8, 2019

    Panel Certifies Question On Insurer’s Right To Reimbursement To Nevada High Court

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on July 2 affirmed a lower federal court’s ruling that an insurer has no duty to defend its insureds but reserved its judgment as to whether the insurer is entitled to reimbursement of the funds it already spent on its insureds' defense, certifying this question to the Nevada Supreme Court (Nautilus Insurance Co. v. Access Medical LLC, et al., Nos. 17-16265, 17-16272 and 17-16273, 9th Cir., 2019 U.S. App. LEXIS 19777).

  • July 3, 2019

    Outside Business Exclusion Does Not Bar Coverage, Law Firm Insured Tells 3rd Circuit

    PHILADELPHIA — A law firm insured recently asked the Third Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that a professional liability insurance policy's outside business exclusion precludes coverage for underlying claims against a law firm insured and one of its attorneys (Westport Insurance Corporation v. Hippo Fleming & Pertile Law Offices, et al., No. 18-3551, 3rd Cir.).