Mealey's Emerging Insurance Disputes
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May 30, 2023
Florida Panel Reverses, Remands For Dismissal Of Travel Insurer, Underwriter
LAKELAND, Fla. — A Florida appeals panel held that a lower court erred in denying a travel insurer and an underwriter’s motions to dismiss a hospital’s lawsuit seeking reimbursement of unpaid or underpaid claims for emergency medical services rendered to foreign patients, finding that personal jurisdiction does not exist.
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May 30, 2023
Michigan Panel Affirms Ruling In Favor Of Insurance Agency, Owner
DETROIT — A Michigan appeals panel affirmed a lower court’s summary judgment ruling in favor of an insurance agency and its owner in a lawsuit alleging breach of contract and negligence, rejecting the appellants’ contention that they established a genuine issue of material fact as to whether the appellees breached their duty as insurance agents to procure the requested insurance policy.
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May 30, 2023
Delaware Judge Enters Final Judgment In Favor Of Excess Employers Liability Insurer
WILMINGTON, Del. — A Delaware judge entered a final judgment in favor of an umbrella insurer in an insured’s lawsuit seeking employers liability coverage for the losses it incurred in litigating and settling an underlying workplace injury.
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May 26, 2023
Texas Panel: No Coverage Owed For Insured’s $16M Loss Over Fraudulent Invoices
HOUSTON — A Texas appeals court on May 25 affirmed a lower court’s summary judgment ruling in favor of primary and excess commercial crime insurers in a coverage dispute arising from $16,423,941.78 in fraudulent invoices, finding that coverage was not triggered because the insured’s underlying loss was a result of a dishonest act by the insured’s authorized representative.
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May 25, 2023
En Banc Review Of D&O Coverage Dispute Is Warranted, Insured Tells 4th Circuit
RICHMOND, Va. — An insured filed a petition in the Fourth Circuit U.S. Court of Appeals seeking en banc review of the panel’s opinion earlier in May that vacated and remanded a lower federal court’s ruling that a “bump-up” exclusion does not unambiguously preclude directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger, challenging the panel’s holding that the lower court “adopted an unduly narrow reading” of the exclusion.
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May 25, 2023
Panel: Insured Fails To Show That Insurer’s Phone Recording Was Surreptitious
CHICAGO — An Illinois appeals court concluded May 24 that a bakery and catering company insured failed to allege facts to support its argument that a commercial general liability insurer’s recording of a phone conversation between a claim representative and the insured’s attorney was surreptitious, affirming a lower court’s dismissal of the insured’s lawsuit alleging that the insurer violated Illinois Eavesdropping Statute.
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May 25, 2023
CGL Insurer Has Duty To Defend Negligence Suit, 5th Circuit Rules In Reversal
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals held that a commercial general liability insurer has a duty to defend its insured against an underlying negligence lawsuit seeking $20 million in wrongful death, survival and punitive damages, reversing a lower court’s summary judgment ruling in favor of the insurer in an excess insurer’s lawsuit seeking a declaration as to coverage duties for their mutual insured.
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May 24, 2023
Insured Failed To Timely Report Claim Under Professional Liability Insurance Policy
COLUMBUS, Ohio — An Ohio appeals panel affirmed a lower court’s summary judgment ruling in favor of a professional liability insurer in an insured’s breach of contract and declaratory judgment lawsuit seeking coverage for its losses arising from a fraudulent wire transfer, finding that the insured failed to satisfy the policy’s reporting requirement.
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May 23, 2023
Bankruptcy Judge Approves Trustee’s Settlement Request In Debtor Insurer Case
WILMINGTON, Del. — A Delaware federal bankruptcy judge issued an order granting a trustee’s motion to approve specified settlements in an insolvent insurer’s Chapter 7 bankruptcy proceeding, finding that the settlements were “fair and equitable” and in the best interests of the estates and creditors.
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May 22, 2023
Panel Affirms Dismissal Of Consolidated Class Actions Seeking Coronavirus Coverage
SEATTLE — In three rulings, the Ninth Circuit U.S. Court of Appeals on May 19 affirmed a Washington federal judge’s ruling that granted insurers’ motion to dismiss consolidated class actions brought by western Washington businesses seeking coverage for lost income stemming from the coronavirus pandemic, agreeing that COVID-19 does not cause the physical loss or damage to the insureds’ property that is required to trigger coverage.
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May 22, 2023
Connecticut Judge Orders Production Of Discrete Class Of Undisclosed Communications
HARTFORD, Conn. — After conducting an in camera review of disclosed documents, a Connecticut judge concluded that directors and officers insureds waived their attorney-client privilege and ordered production of a discrete class of undisclosed communications that are covered by the waiver.
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May 22, 2023
Judge Dismisses Quest’s Third-Party Claims Against Agent In Opioid Coverage Dispute
CINCINNATI — A federal judge in Kentucky issued an agreed order of dismissal of Quest Pharmaceuticals Inc.’s third-party complaint alleging negligence and breach of contract against an insurance agent in a coverage dispute over lawsuits alleging that Quest improperly distributed opioids.
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May 22, 2023
Delaware Judge Dismisses Coverage Suit Arising From Patient’s Injury, Death
NEW CASTLE, Del. — A Delaware judge dismissed with prejudice a coverage dispute arising from the injury and subsequent death of a patient of a home health care agency insured, one day after the parties filed a stipulation of dismissal.
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May 22, 2023
Magistrate: Suit Against HOA Insured Fails To Allege ‘Loss’ To Trigger Coverage
SACRAMENTO, Calif. — A federal magistrate judge in California on May 18 granted a professional liability insurer’s motion to dismiss a homeowners’ association insured’s breach of contract and bad faith lawsuit, finding that an underlying lawsuit against the HOA did not seek a “loss” to trigger coverage under the policy.
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May 19, 2023
N.Y. Court: Name Of Insured Is Not Dispositive If Intent To Insure Risk Is Clear
NEW YORK — A New York appeals court held that a commercial general liability insurance policy “always extended” additional insured coverage to a New York building and its owner and that it is “of no moment” that the tenant never updated the endorsement to reflect a change in ownership, affirming a lower court’s summary judgment ruling in favor of the building owner and another insurer.
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May 19, 2023
4th Circuit: Federal Search Warrant Not A Claim Under Professional Liability Policy
RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on May 18 affirmed a lower federal court’s grant of a professional liability insurer’s motion to dismiss a law firm insured’s breach of contract lawsuit, finding that a search warrant by the U.S. government is not a “claim” under the policy and the costs incurred by the insureds related to conflict of interest letters sent by the U.S. government are also not covered losses under the policy.
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May 18, 2023
California Panel Affirms JNOV For Auto Parts Retailer In Indemnification Dispute
RIVERSIDE, Calif. — A California appeals panel on May 17 affirmed a lower court’s ruling granting an auto parts retailer’s judgment notwithstanding the verdict in an indemnification dispute over an underlying $29.9 million negligence and product liability settlement, finding that neither a cross-complainant nor its insurer was entitled to recover half of the underlying settlement.
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May 18, 2023
Insurer Says District Court Erred In Finding Bacteria Exclusion Is Ambiguous
RICHMOND, Va. — A district court erred in finding that a primary insurer owes a duty to defend its insured against an underlying suit arising out of exposure to Legionella bacteria at an insured hotel because the phrase “good or product intended for bodily consumption” as used in the policy’s bacteria exclusion is not ambiguous, the primary insurer contends in its appellant brief filed in the Fourth Circuit U.S. Court of Appeals.
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May 16, 2023
Judge: Insurer Fails To Demonstrate Animal Liability Exclusion Is Applicable
WATERBURY, Conn. — A Connecticut judge denied an insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for a negligence lawsuit arising from an alleged dog attack, finding that the insurer has not shown that the policy’s animal liability exclusion bars coverage.
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May 16, 2023
CGL Insurer Says Hotel Insureds Not Owed Coverage For Sex-Trafficking Claims
HOUSTON — A commercial general liability insurer filed suit in a federal court in Texas seeking a declaration that it has no duty to defend and indemnify its hotel insureds for a lawsuit in which the plaintiff alleges that she was abused and molested as a minor while in the insureds’ “care, custody or control.”