Mealey's Emerging Insurance Disputes

  • September 20, 2019

    Federal Judge Reserves Ruling On Insurer’s Coverage Duties For Trademark Claims

    SEATTLE — A federal judge in Washington on Sept. 17 held that an insurer has no duty to defend or indemnify its plumbing company insured under an insurance policy’s businessowners liability coverage, reserving his ruling on whether an underlying trademark infringement suit triggers the policy’s cyber liability and data breach response coverage (Mid-Century Insurance Company v. Hunt's Plumbing & Mechanical LLC, et al., No. 19-0285, W.D. Wash., 2019 U.S. Dist. LEXIS 160098).

  • September 19, 2019

    Husband Intended To Kill Wife; No Coverage Owed, Michigan Panel Says In Reversal

    DETROIT — A Michigan appeals panel on Sept. 17 held that “there is no other conclusion but that” a husband intended to take a knife and kill his wife, despite the fact that he was delusional, reversing and remanding a lower court’s ruling that a homeowners insurer owes coverage for the underlying wrongful death lawsuit (State Farm Fire & Casualty Insurance Company v Noah Ravenscroft, et al., No. 345377, Mich. App., 2019 Mich. App. LEXIS 5538).

  • September 18, 2019

    Judge Enters Default Judgment Against Insured In Coverage Suit Over Alleged Suicide

    ANCHORAGE, Alaska — A federal judge in Alaska on Sept. 13 granted Allstate Insurance Co.’s motion for a default judgment against its insured in its lawsuit seeking a declaration that it has no duty to indemnify him against an underlying lawsuit over the alleged suicide death of his daughter (Allstate Insurance Company v. Estate of Maia Grace Elizabeth Walker, et al., No. 19-0063, D. Alaska).

  • September 18, 2019

    Judge Refuses To Dismiss $1M Professional Liability Coverage Suit Over Facility Fire

    BALTIMORE — A federal judge in Maryland on Sept. 11 denied an insurer’s motion to dismiss a lawsuit seeking a declaration that a professional liability insurance policy provides up to $1 million in coverage for underlying claims for injuries and damages arising from a March 2017 fire that occurred at an assisted living facility, finding that the declaratory judgment lawsuit is appropriately beforethe federal court (Tarhonika Vaughn, et al, v. Certain Underwriters at Lloyd's, London, No. 18-3375, D. Md., 2019 U.S. Dist. LEXIS 155723).

  • September 17, 2019

    Magistrate:  Claims Arose Out Of Professional Services; Exclusion Limits Coverage

    PROVIDENCE, R.I. — A federal magistrate judge in Rhode Island on Sept. 12 held that an emergency room nurse’s underlying negligence lawsuit brought against a doctor arose out of the doctor’s rendering of professional services that triggered coverage under health care professional liability insurance coverage, further finding that coverage is limited by the policy’s workers’ compensation exclusion (ProAssurance Specialty Insurance Company, Inc. v. Ricky W. McCullough, M.D., et al., No. 18-343, D. R.I., 2019 U.S. Dist. LEXIS 155865).

  • September 17, 2019

    Texas High Court Accepts Certified Question In Suit Over Fatal ATV Accident

    AUSTIN, Texas — According to its Sept. 13 orders pronounced, the Texas Supreme Court accepted a certified question from the Fifth Circuit U.S. Court of Appeals to determine whether there’s a policy language exception to Texas’ eight-corners rule in a dispute over homeowners coverage for underlying claims that insureds were negligent in failing to supervise and instruct their 10-year-old grandson, who died while in their care (State Farm Lloyds v. Janet Richards, et al., No. 19-0802, Texas Sup.).

  • September 16, 2019

    Judge: Insured Fails To Show Potential For Employment Practices Liability Coverage

    LOS ANGELES — A federal judge in California on Sept. 4 found that a courier company insured’s arguments are “too speculative” to establish a potential for employment practices liability coverage for underlying putative class claims brought by its delivery drivers, finding that the insurer has no duty to defend (Unity Courier Services, Inc. v. Hudson Insurance Co., No. 18-08143, C.D. Calif., 2019 U.S. Dist. LEXIS 151566).

  • September 16, 2019

    Majority: Insured Did Not Follow Professional Liability Policy’s Notice Requirements

    ST. LOUIS — A majority of a Missouri appellate panel on Sept. 3 found that because an “objectively reasonable attorney” would have understood that legal malpractice claims survived a client’s death, an attorney insured had a duty to notify its professional liability insurer of a potential malpractice claim when he applied to renew his policy (Elizabeth A. Ruiz v. The Bar Plan Mutual Insurance Company, No. ED106926, Mo. App., 2019 Mo. App. LEXIS 1381).

  • September 16, 2019

    No Coverage For Suit Alleging Insured Charged Hidden Fees On Vending-Machine Charges

    CHICAGO — A federal judge in Illinois on Sept. 4 held that an underlying putative class action alleging financial loss based on the insured’s practice of charging hidden fees to vending-machine credit or debit card customers fails to trigger coverage under commercial general liability and commercial umbrella insurance policies that were issued to the insured, granting the insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage (AMCO Insurance Company v. Avcoa, Inc., et al., No. 19-480, N.D. Ill., 2019 U.S. Dist. LEXIS 150272).

  • September 16, 2019

    D&O Insurer Has No Duty To Defend, Indemnify Attorney General’s UCL, FAL Suit

    LOS ANGELES —A federal judge in California on Sept. 10 held that under California Insurance Code Section 533.5, a directors and officers liability insurer has no duty to defend or indemnify its insured against an underlying unfair competition and false advertising lawsuit brought against its insured by the California attorney general (Adir International, LLC, et al. v. Starr Indemnity and Liability Company, et al., No. 19-04352, C.D. Calif., 2019 U.S. Dist. LEXIS 155321).

  • September 13, 2019

    Panel Affirms Dismissal Of Suit Against Taiwanese Insurers For Lack Of Jurisdiction

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on Sept. 12 affirmed a lower federal court’s dismissal of an insurer’s lawsuit seeking indemnification for two Taiwanese insurers for a products-liability settlement paid on behalf of a bicycle manufacturer insured, finding that the plaintiff did not establish that the defendants have sufficient minimum contacts with Wisconsin and, therefore, exercising jurisdiction over the defendants would violate due process (Lexington Insurance Company v. Hotai Insurance Company, Ltd., et al., No. 18-1141, 7th Cir., 2019 U.S. App. LEXIS 27483).

  • September 12, 2019

    PLHIGA Act Preempted As To Authority To Assess Premiums Collected By Health Insurers

    HARRISBURG, Pa. — The Pennsylvania Life and Health Insurance Guaranty Association Act (PLHIGA Act) is preempted by federal law to the extent that it authorizes PLHIGA to assess Medicare Part C and D premiums collected by its member insurers, the Pennsylvania Commonwealth Court ruled Sept. 9, finding no error in an order by the state’s insurance commissioner sustaining health insurers’ appeals and reversing challenged assessments (Pennsylvania Life and Health Insurance Guaranty Association v. Pennsylvania Insurance Department, Nos. 940 - 947 C.D. 2018, Pa. Cmwlth., 2019 Pa. Commw. LEXIS 840).

  • September 11, 2019

    Excess Insurers’ Motions To Dismiss Denied In Formaldehyde Laminate Flooring Suit

    MADISON, Wis. — In two separate opinions issued Sept. 9, a Wisconsin state judge denied motions to dismiss filed by excess insurers in a suit regarding coverage for underlying claims arising out of toxic levels of formaldehyde in Lumber Liquidators Inc.’s laminate flooring after determining that a ruling on the applicability of the pollution exclusion in one of the excess insurer’s policies cannot be made at this stage of the litigation and after finding that the insured sufficiently alleged that a primary policy was exhausted by an underlying settlement (Lumber Liquidators Inc. v. American Guarantee & Liability Insurance Co., et al., No. 15-1089, Wis. Cir., Dane Co.).

  • September 10, 2019

    Panel Certifies Question To Texas High Court In Coverage Suit Over ATV Accident

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Sept. 9 certified a question to the Texas Supreme Court to determine whether there’s a policy language exception to Texas’ eight-corners rule after insureds’ appealed a lower federal court’s ruling that their homeowners insurer has no duty to defend or indemnify them against an underlying lawsuit alleging that they were negligent in failing to supervise and instruct their 10-year-old grandson who died while in their care (State Farm Lloyds v. Janet Richards, et al., No. 18-10721, 5th Cir.).

  • September 09, 2019

    Insurer Seeks $734,500 In Equitable Subrogation For Settlement Of Suit Against Law Firm

    LOS ANGELES — A primary and first-excess layer legal malpractice insurer on Sept. 6 sued another excess insurer in the U.S. District Court for the Central District of California, seeking recovery of a portion of the $2.5 million it paid to settle an underlying lawsuit brought against their mutual law firm insured (Certain Underwriters At Lloyd’s, London, et al. v. Scottsdale Insurance Company, No. 19-07730, C.D. Calif.).

  • September 06, 2019

    Insurer Did Not Unreasonably Deny Coverage For Modular Homes Claim, Panel Affirms

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on Aug. 28 affirmed a lower federal court’s ruling that an insurer did not act unreasonably when it denied an insured’s claim, concluding that the insurer “relied on several sources of evidence” in determining that the insured’s loss of five modular homes was caused by a business dispute and not a theft (Clear Creek Retirement Plan II LLC v. Foremost Insurance Company Grand Rapids Michigan, No. 18-35725, 9th Cir., 2019 U.S. App. LEXIS 26451).

  • August 30, 2019

    Panel: Wrongful Employment Practices Exception Negates Insured Vs. Insured Exclusion

    DALLAS — A Texas appeals panel held Aug. 19 that an insured satisfied its burden of establishing that an insurance policy’s wrongful employment practices exception negates the “insured versus insured” exclusion relied on by the insurer to deny coverage, partly reversing and remanding a lower court and rendering a $4,123,382.61 judgment in favor of the insured in a dispute arising from an employee termination (Prophet Equity LP, et al. v. Twin City Fire Insurance Company, No. 05-17-00927-CV, Texas App., 5th Dist., 2019 Tex. App. LEXIS 7302).

  • August 30, 2019

    Criminal Acts Exclusion Bars Coverage For Shooting Death, 6th Circuit Affirms

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Aug. 23 affirmed a lower federal court’s ruling that an insurance policy's criminal acts exclusion excuses an insurer from its duty to defend or indemnify its insured, in his individual or official capacities as a constable, against an underlying shooting death, rejecting the appellant’s contention that the exclusion is ambiguous (Atlantic Specialty Insurance Co. v. Bill Stanley, et al., No. 17-308, 6th Cir., 2019 U.S. App. LEXIS 25501).

  • August 29, 2019

    Wisconsin Panel: Location Endorsement Bars Coverage For Medical Negligence Claim

    WAUSAU, Wis. — On remand from the Wisconsin Supreme Court, a Wisconsin appeals panel on Aug. 27 found that a medical malpractice insurer owes no coverage for a medical negligence claim under the policy’s location endorsement because the doctor insured’s liability is “connected with” professional services that he performed in Michigan (David W. Paynter, et al. v. ProAssurance Wisconsin Insurance Company, et al., No. 2017AP739, Wis. App., Dist. 3, 2019 Wisc. App. LEXIS 479).

  • August 29, 2019

    Coverage Barred For Aerial Spraying Of Herbicide, Texas Panel Determines

    HOUSTON — The First District Texas Court of Appeals on Aug. 27 reversed a trial court's ruling that an insurer owes a duty to defend an insured against underlying allegations arising out of the insured’s aerial spraying of a herbicide because an endorsement to the policy’s pollution exclusion clearly precludes coverage (StarNet Insurance Co. v. RiceTec Inc., No. 01-18-00536-CV, Texas App., 1st Dist., 2019 Tex. App. LEXIS 7758).