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Mealey's Emerging Insurance Disputes

  • September 25, 2018

    Insured Seeks Reversal Of No Coverage Ruling In Suit Over DOJ Investigation

    ATLANTA — An insured recently asked the 11th Circuit U.S. Court of Appeals to reverse a lower federal court’s finding in favor of an executive and organization liability insurer in its lawsuit seeking coverage for an underlying criminal investigation conducted by the Antitrust Division of the U.S. Department of Justice (DOJ) (Crowley Maritime Corp. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 18-10953, 11th Cir.).

  • September 25, 2018

    Insurers Appeal $62.7M Judgment In Coverage Dispute Over Contaminated Heparin

    RICHMOND, Va. — Insurers recently asked the Fourth Circuit U.S. Court of Appeals to reverse a lower federal’s court $62.7 million judgment in favor of insureds in a dispute over coverage for underlying product liability lawsuits involving contaminated heparin (Charter Oak Fire Insurance v. American Capital, 17-2015 and 17-2068, 4th Cir.).

  • September 25, 2018

    General Contractor’s Insurer Owes No Reimbursement To Subcontractor’s Insurer

    NEW YORK — The Second Circuit U.S. Court of Appeals on Sept. 21 affirmed a federal court’s finding that a general contractor’s insurer has no duty to reimburse a subcontractor’s insurer for its past and accruing costs in defending an underlying negligence lawsuit arising from an injury sustained by the subcontractor’s employee (SPARTA Insurance Company v. Technology Insurance Company, Inc., No. 17-3441, 2nd Cir., 2018 U.S. App. LEXIS 27165).

  • September 25, 2018

    Filed-Rate Doctrine Bars Claims Alleging Kickback Scheme, Majority Affirms

    ATLANTA — A majority of an 11th Circuit U.S. Court of Appeals panel on Sept. 24 affirmed a lower federal court’s finding that the filed-rate doctrine bars all class action claims alleging that two mortgage servicers and an insurer overcharged force-placed insurance (FPI) premiums as part of a kickback scheme (Pankaj Patel, et al. v. Specialized Loan Servicing LLC, et al., Nos. 16-12100 and 16-16585, 11th Cir., 2018 U.S. App. LEXIS 27221).

  • September 24, 2018

    No Valid Exception To No-Voluntary Payments Provision Applies To Coverage Dispute

    PASADENA, Calif.— The Ninth Circuit U.S. Court of Appeals on Sept. 20 affirmed a lower court’s ruling that insureds breached an insurance policy’s  “no-voluntary payments” provision by executing an underlying settlement with a former employee without the insurer’s knowledge or consent and that no exception to the provision applies (AMCO Insurance Company v. Jennifer Morfe, No. 17-55383 9th Cir., 2018 U.S. App. LEXIS 26923).

  • September 24, 2018

    Panel Reverses Order Enjoining Insurance Commissioner From Enforcing 3 Regulations

    SANTA ANA, Calif. — A California appeals panel on Sept. 20 reversed a lower court’s order that imposed a preliminary injunction that prohibited the Insurance commissioner’s enforcement of California Code of Regulations, Titles 2695.1(a), 2695.2(l) and 2695.2(y), remanding for the lower court to also reverse its order granting the insurer’s motion for judgment on the pleadings as to its claim for declaratory relief (PacifiCare Life And Health Insurance Company v. Dave Jones, as Insurance Commissioner, etc., No. G053914, Calif. App., 4th Dist., Div. 3, 2018 Cal. App. LEXIS 836).

  • September 21, 2018

    Panel Stands By Ruling In Dispute Over Legal Fees Arising From Sexual Abuse Claim

    SAN DIEGO — On a motion for rehearing, a California appeals panel on Sept. 20 reaffirmed a lower court's ruling that an insurer has no duty to pay $106,102.63 in legal fees that were purportedly incurred by the insured's general counsel in defending a lawsuit arising from the sexual abuse of a foreign exchange student (Pacific Intercultural Exchange v. Scottsdale Insurance Company, No. D071478, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 6432).

  • September 21, 2018

    Panel Partly Vacates Rulings In Dispute Over Ownership Of Life Insurance Policies

    ATLANTA — The 11th Circuit U.S. Court of Appeals on Sept. 18 vacated and remanded in part a lower federal court’s ruling in a dispute in which a insurer asserts that a financing company secured its life insurance policies through an unlawful and tortious conspiratorial scheme and the financing company counters that the insurer committed breach of contract when it attempted to interfere with the company’s ownership of and rights under the policies (Sun Life Assurance Company of Canada v. Imperial Premium Finance, LLC, Nos. 17-10189 and 17-10415, 11th Cir., 2018 U.S. App. LEXIS 26461).

  • September 20, 2018

    New York Justice: Excess Insurer Fails To Establish Exclusion Applies

    NEW YORK — A New York justice on Sept. 10 held that an excess insurer has failed to satisfy its burden of showing as a matter of law that its policy’s Prior or Pending Demand or Litigation (PPLI) Exclusion bars coverage, denying the insurer’s motion for summary judgment and refusing to vacate an earlier order that directed it to advance attorney fees and costs to defend against underlying lawsuits (Freedom Specialty Insurance Company, et al. v. Platinum Management [NY], LLC, No. 652505/2017, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 3891).

  • September 20, 2018

    Panel Affirms Judgment In Diocese’s Favor In Sexual Misconduct Coverage Dispute

    NEW YORK — The Second Circuit U.S. Court of Appeals on Sept. 19 affirmed a lower federal court’s $945,265.11 breach of contract judgment against an insurer in a coverage dispute stemming from underlying sexual misconduct cases brought against its diocese insured (The Hartford Roman Catholic Diocesan Corp. v. Interstate Fire & Casualty Company, Nos. 16-2999 and 17-2484, 2nd Cir., 2018 U.S. App. LEXIS 26698).

  • September 19, 2018

    Georgia Panel Affirms Claim Untimely; No Bad Faith On Insurer’s Part

    ATLANTA — A Georgia appeals panel on Sept. 18 affirmed a lower court’s grant of summary judgment in favor of a business liability insurer, finding that the plaintiff failed to provide timely notice of a coverage claim and that the insurer had reasonable grounds for denying the claim (Taylor, et al. v. State Farm Fire & Casualty Co., No. A18A1398, Ga. App., 3rd Div., 2018 Ga. App. LEXIS 513).

  • September 19, 2018

    Insured Accuses Insurer Of ‘Profit Driven Scheme’ In Hurricane Irma Dispute

    FORT LAUDERDALE, Fla. — A Florida insured on Sept. 5 sued his homeowners insurer in a Florida court, alleging that the insurer charged Floridians for hurricane insurance and then intentionally undervalued or denied legitimate insurance claims by using unlicensed adjusters and engineers (Lawrence Malysa v. Tower Hill Prime Insurance Co., et al., No. N/A., Fla. Cir., 17th Jud. Cir., Broward Co.).

  • September 18, 2018

    Insured Objects To Magistrate’s Report Suggesting Dismissal Of Superstorm Sandy Suit

    CENTRAL ISLIP, N.Y. — An insured on Sept. 14 filed objections to a magistrate’s report that recommended dismissal of his lawsuit alleging that he was wrongfully denied $141,274.50 in insurance proceeds for Superstorm Sandy damage to his Long Beach, N.Y., home, asserting the “legal impact” of the errors in the magistrate’s report and recommendation “go far beyond this case” (David Clutter v. William B. Long, et al., No. 17-4833, E.D. N.Y.).

  • September 14, 2018

    All Expert Testimony Survives Vetting In Ponzi Scheme Insurance Case

    MIAMI — In two orders, a Florida federal magistrate judge on Sept. 12 denied bids by both sides to exclude expert testimony in an insurance coverage dispute created by the billion-dollar Ponzi scheme of South Florida lawyer Scott Rothstein (Michael I. Goldberg, et al. v. Aon Risk Services, Northeast, Inc., No. 13-21653, S.D. Fla., 2018 U.S. Dist. LEXIS 155362, 2018 U.S. Dist. LEXIS 155363).

  • September 13, 2018

    Insurer Can’t File Cross-Claim Against Broker Of Contaminated Products Policy

    SEATTLE — An insurer involved in a contaminated products coverage dispute cannot file a cross-claim against the broker that handled the sale of the policy because the insurer failed to demonstrate good cause for allowing the cross-claim to be filed after the court’s deadline to submit amended pleadings, a Washington federal judge said Sept. 12 (National Frozen Foods Corp. v. Berkley Assurance Co., No. 17-339, W.D. Wash., 2018 U.S. Dist. LEXIS 155621).

  • September 12, 2018

    Panel: Evidence Tampering Does Not Fall Under Malicious Prosecution Exception

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Sept. 11 held that a law enforcement liability insurance policy expressly bars indemnification of intentional criminal acts and that a police commander’s act of evidence tampering in a murder investigation does not fall under the policy’s malicious prosecution exception to the exclusion for criminal, dishonest and fraudulent acts, reversing a lower court’s ruling against the insurer (Nicholas Sampson v. Investigator William Lambert, et al. v. St. Paul Fire and Marine Insurance Company, et al., No. 17-1104, No. 17-1106, Nos. 17-1114 and 17-1117, 8th Cir., 2018 U.S. App. LEXIS 25666).

  • September 12, 2018

    Massachusetts High Court: Use Of Runner’s Name Is Advertising Idea Under Policy

    BOSTON — The Massachusetts Supreme Judicial Court on Sept. 12 found that a lower court erred in concluding that the family of deceased 1960 Olympic marathon gold medalist Abebe Bikila did not actually use the name Bikila as an advertising idea, reversing the lower court’s ruling in favor of insurers in a coverage dispute over a lawsuit challenging the propriety of a shoe company's use of the runner's name (Holyoke Mutual Insurance Co. in Salem, et al. v. Vibram USA Inc., et al., No. SJC-12401, Mass. Sup., 2018 Mass. LEXIS 568).

  • September 12, 2018

    Insurer Owes No Coverage For Faulty Laminate Suit, 7th Circuit Affirms

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on Sept. 10 affirmed a lower federal court’s finding that an insurer has no duty to provide coverage for an underlying lawsuit alleging that its plastics company insured manufactured a faulty laminate (Berry Plastics Corp. v. Illinois National Insurance Co., No. 17-1815, 7th Cir., 2018 U.S. App. LEXIS 25576).

  • September 11, 2018

    Federal Judge: Notice Of Claim Was Untimely, Insured’s Delay Was Unjustified

    AUGUSTA, Ga. — A federal judge in Georgia on Sept. 6 found that an insured failed to overcome his unreasonable delay in notifying his liability insurers of an underlying occurrence for which he sought coverage, granting the insurers’ motion for summary judgment in their declaratory judgment lawsuit (Zurich American Insurance Company, et al. v. Dr. James Y. Jones, No. 15-081, S.D. Ga., 2018 U.S. Dist. LEXIS 152009).

  • September 6, 2018

    Justice: Insurer Has Duty To Defend Landlord Entities As Additional Insureds

    NEW YORK — A New York justice on Aug. 15 found that a commercial tenant’s insurer has a duty to defend landlord entities as additional insureds against an underlying negligence lawsuit, further concluding that the issue of whether the insurer has a duty to indemnify them is premature (Zurich American Insurance Company, et al. v. Liberty Mutual Fire Insurance Company, et al., No. 160188/2014, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 3611).