Mealey's Emerging Insurance Disputes
-
May 24, 2019
Kentucky Panel Finds Bad Faith Claim Against Insurer Was Timely, Reverses
FRANKFORT, Ky. — A Kentucky appeals panel on May 24 reversed and remanded a lower court’s dismissal of a bad faith claim against an insurer arising from an underlying dram shop action against the insured, finding that the bad faith claim was timely (William Gerald Watson v. United States Liability Insurance Company, No. 2018-ca-000475, 2019 Ky. App. LEXIS 94).
-
May 24, 2019
Insurer Has No Duty To Defend Pharmaceutical Company Against SEC Suit, Panel Affirms
BOSTON — The First Circuit U.S. Court of Appeals on May 23 affirmed a lower federal court’s ruling in favor of an insurer in a pharmaceutical company insured’s breach of contract and breach of fiduciary lawsuit, finding that the insurer has no duty to defend the insured against an underlying action brought by the Securities Exchange Commission (Biochemics, Inc., et al. v. Axis Reinsurance Company, et al., No. 17-2059, 1st Cir., 2019 U.S. App. LEXIS 15326).
-
May 24, 2019
9th Circuit: Alleged Landscaping Conduct ‘Was Entirely Intentional’; No Coverage
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 22 held that because an insured’s alleged conduct was entirely intentional in an underlying lawsuit alleging that its landscaping activities violated a conservation easement, a lower federal court properly held that the insurer has a no duty to defend the insured (Henstooth Ranch, LLC v. The Burlington Insurance Company, No. 18-15167, 9th Cir., 2019 U.S. App. LEXIS 15157).
-
May 22, 2019
11th Circuit: Alleged Conduct Falls Outside Of Policy’s ‘Professional Services’
ATLANTA — The 11th Circuit U.S. Court of Appeals on May 21 held that underlying claims against an insured “falls clearly outside” of a professional liability insurance policy's definition of “professional services,” affirming a lower court’s ruling in favor of the insurer (Mark Chapman, et al. v. ACE American Insurance Co., No. 18-12972, 11th Cir., 2019 U.S. App. LEXIS 15013).
-
May 22, 2019
Judge Denies Insurer’s Motion As To Yahoo!’s Bad Faith, Bad Faith Damages Claims
SAN JOSE, Calif. — A California federal judge on May 17 denied a commercial general liability insurer’s motion for judgment as a matter of law on Yahoo! Inc.’s bad faith and bad faith damages claims, finding that there is a “legally sufficient evidentiary basis” for a jury to determine that the insurer acted in bad faith in its handling of underlying class actions filed against Yahoo over its practice of scanning the content of emails (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 17-00489, N.D. Calif., 2019 U.S. Dist. LEXIS 83811).
-
May 21, 2019
Insureds Seek Reversal Of No Coverage Ruling In Dispute Over False Medicaid Claims
RICHMOND, Va. — Insureds recently asked the Fourth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that an excess insurer has no duty to defend or indemnify them against an underlying lawsuit seeking recovery for the government's alleged injuries for false claims for Medicaid reimbursements, contending that the lower court applied the wrong precedent in reaching its decision (Affinity Living Group, LLC, et al. v. StarStone Specialty Insurance Company, et al., No. 18-2376, 4th Cir.).
-
May 20, 2019
Insureds Failed To Give Insurer Timely Notice Of Arbitration With Former Employee
HOUSTON — A Texas federal chief judge on May 15 granted an employment practices liability insurer’s motion for summary judgment in a lawsuit alleging that it wrongfully denied coverage for an underlying arbitration award entered against its insureds in an employment dispute, finding that the policy unambiguously required the insureds to give timely notice of the arbitration (Stadium Motorcars, LLC, et al. v. Federal Insurance Company, No. 18-1920, S.D. Texas, 2019 U.S. Dist. LEXIS 82251).
-
May 17, 2019
Ohio Panel Majority Affirms Assault And Battery Exclusion Bars Coverage
DAYTON, Ohio — A majority of an Ohio appellate panel on May 17 affirmed a lower federal court’s ruling in favor of an insurer in a coverage dispute brought by a bar owner insured, finding that the policy term "assault" unambiguously includes the common-law tort of assault and the crime of assault pursuant to Ohio’s Revised Code (Jerome Badders, et al. v. Century Insurance Co., No. 28170, Ohio App., 2nd Dist., Montgomery Co., 2019 Ohio App. LEXIS 1975).
-
May 17, 2019
Federal Judge Remands Employment Practices Coverage Suit To Indiana Court
INDIANAPOLIS — An Indiana federal judge on May 14 remanded insureds’ lawsuit seeking employment practices liability insurance coverage for an underlying matter, finding that the insurer has failed to establish that the insureds’ negligent misrepresentation claim against a claims administrator has “no reasonable possibility of success under Indiana law” (Technicolor USA, Inc., et al. v. National Union Fire Insurance Company of Pittsburgh, Pa., et al., No. 19-00174, S.D. Ind., 2019 U.S. Dist. LEXIS 80966).
-
May 15, 2019
Judge: Settlement Payments To Stockholders Constitute ‘Loss’ Under D&O Policies
WILMINGTON, Del. — Granting in part and denying in part motions for summary judgment in a coverage dispute arising from underlying stockholders’ claims against Dole Food Co. and its directors and officers, a Delaware judge on May 7 held that underlying settlement payments constitute “loss” under excess directors and officers liability insurance policies and that there are genuine issues of material fact regarding the policies’ written consent provisions and cooperation clauses (Arch Insurance Company, et al. v. David H. Murdock, et al., No. N16C-01-104-EMD, Del. Super., New Castle Co., 2019 Del. Super. LEXIS 227).
-
May 15, 2019
Judge Refuses To Dismiss D&O Insurers From Suit Over Government Investigation
NEW CASTLE, Del. — A Delaware judge on April 25 denied directors and officers liability insurers’ motion to dismiss their insureds’ lawsuit seeking coverage for an underlying government investigation involving a real estate investment trust but found that the court lacks jurisdiction over another set of insurer defendants that issued Difference in Conditions policies (AR Capital LLC, et al. v. XL Specialty Insurance Company, et al., No. N19C-01-024, Del. Super., New Castle Co., 2019 Del. Super. LEXIS 216).
-
May 15, 2019
Judge Enters Judgment In Insurer’s Favor After Finding Exclusion Bars Coverage
MIAMI — A Florida federal judge on May 6 entered final judgment in favor of an insurer in its lawsuit disputing coverage for underlying claims that the insured violated Florida's Dram Shop Law after finding that the policy's liquor liability exclusion bars coverage (AIX Specialty Insurance Company v. Members Only Management, LLC, et al., No. 18-60471, S.D. Fla.).
-
May 14, 2019
Depositions Ordered In Coverage Dispute Over Online Personal Material Postings
SAN JOSE, Calif. — A company that was responsible for the online postings of a client’s personal material was ordered May 10 to mostly comply with deposition subpoenas by an insurance company involved in a coverage dispute over the matter, with a California federal magistrate judge declining to quash the subpoenas and finding most of the insurer’s requests to be relevant and proportional to the needs of the case (Pegatron Technology Service Inc. v. American Guarantee & Liability Insurance Co., No. 5:18-cv--01477, N.D. Calif., 2019 U.S. Dist. LEXIS 79693).
-
May 13, 2019
Federal Judge Refuses To Compel Arbitration, Finds Bad Faith Claim Premature
MIAMI — A Florida federal judge on May 10 denied an insurer’s motion to compel arbitration and dismiss a third-party bad faith complaint against it in a lawsuit arising from an underlying injury that occurred during a cruise ship excursion, finding that the bad faith claim is premature and that the plaintiffs cannot be compelled to arbitration because there is no agreement that was signed by both the plaintiffs and the insurer (Lynn McCullough v. Royal Caribbean Cruises, Ltd., et al., No. 16-20194, S.D. Fla, 2019 U.S. Dist. LEXIS 79338).
-
May 13, 2019
Judge Refuses To Dismiss Allstate’s Suit Disputing Coverage For Alleged Suicide
ANCHORAGE, Alaska — An Alaska federal judge on May 7 refused to dismiss Allstate Insurance Co.’s lawsuit seeking a declaration that it has no duty to indemnify against an underlying lawsuit over the alleged suicide death of the insured’s daughter, rejecting the defendants’ argument that the federal court lacks subject matter jurisdiction (Allstate Insurance Company v. Estate of Maia Grace Elizabeth Walker, et al., No. 19-0063, D. Alaska, 2019 U.S. Dist. LEXIS 76904).
-
May 10, 2019
Panel: Coverage Owed For Default Judgment Against Physician Who Fled Country
RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on May 7 affirmed a lower federal court’s finding that a medical malpractice insurer owes coverage for a default judgment entered against a physician insured who fled the country and refused to participate in the defense of the underlying malpractice lawsuit (Claudia M. Mora, et al. v. Lancet Indemnity Risk Retention Group Inc., No. 18-1566, 4th Cir., 2019 U.S. App. LEXIS 13610).
-
May 10, 2019
Judge: 4 Claims Relate To Facebook Posts Occurring After Insurer Canceled Policy
CENTRAL ISLIP, N.Y. — A New York federal judge on May 8 granted in part and denied in part an insurer’s motion for summary judgment in a coverage dispute arising from underlying claims that the insured used five people’s images as part of its promotions on social media without their consent or payment, finding that coverage is barred for the claims of all but one of the underlying plaintiffs (Bullseye Restaurant, Inc., et al. v. James River Insurance Company, No. 17-2996, E.D. N.Y., 2019 U.S. Dist. LEXIS 77701).
-
May 9, 2019
California High Court Accepts Certified Question In Yahoo’s TCPA Coverage Suit
SAN FRANCISCO — The California Supreme Court filed an order on April 10 indicating that on March 27 it agreed to answer a certified question from the Ninth Circuit U.S. Court of Appeals in a coverage dispute between Yahoo! Inc. and its commercial general liability insurer arising from claims brought under the Telephone Consumer Protection Act (TCPA) (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. S253593, Calif. Sup., 2019 Cal. LEXIS 3004).
-
May 9, 2019
Panel Affirms Dismissal Of Suit Alleging Insurers Violated Stored Communications Act
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 26 affirmed a lower federal court’s dismissal of complaints alleging that insurers violated the Stored Communications Act (SCA) when they gained unauthorized access to the plaintiff’s personal information from a website, finding that the plaintiffs failed to state a claim that the website, database or server functioned as an electronic communication service (ECS) provider under the SCA (Hector Casillas v. Cypress Insurance Company, et al., Nos. 17-56065 and 17-56071, 9th Cir., 2019 U.S. App. LEXIS 12583).
-
May 7, 2019
Federal Judge: Insurer Has Duty To Defend Creamery Against Infringement Suit
HARRISBURG, Pa. — A Pennsylvania federal judge on May 6 held that a commercial general liability insurer has a duty to defend Hershey Creamery Co. against an underlying lawsuit alleging that the ice cream manufacturer unlawfully copied a competitor’s self-serve milkshake machine and its related marketing designs, display and verbiage (Hershey Creamery Company v. Liberty Mutual Fire Insurance Co., et al., No. 18-694, M.D. Pa., 2019 U.S. Dist. LEXIS 75760).