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Mealey's Emerging Insurance Disputes

  • November 16, 2018

    Excess Insurer Disputes It Owes Coverage For $73.2M Medical Malpractice Verdict

    WILMINGTON, Del. — An excess health care excess liability insurer on Nov. 14 filed suit in the Delaware Superior Court seeking a declaration that it has no duty to indemnify its insureds for any part of a $73.21 million verdict recently rendered against its insured’s affiliate in an underlying medical malpractice lawsuit (Steadfast Insurance Company v. Community Health Systems, Inc., et al., No.  No.  N18C-11-127, Del. Super.).

  • November 14, 2018

    Directors, Officers Amend Complaint To Argue Policy Exclusion Does Not Bar Coverage

    TAMPA, Fla. — Directors and officers of an insured beef company on Nov. 12 amended their declaratory judgment complaint against an insurer after a Florida federal judge ruled that a policy exclusion excluded coverage for an underlying lawsuit arising from the purchase of company shares (Colorado Boxed Beef Co., Inc., et al. v. Evanston Insurance Co., No. 18-01237, M.D. Fla., 2018 U.S. Dist. LEXIS 183852).

  • November 14, 2018

    Insurer Had Duty To Continue To Defend Adult Care Facility Against Underlying Suit

    BROOKLYN, N.Y. — A New York federal judge on Nov. 7 found that an insurer has a duty to continue to defend its adult care facility operator insured against an underlying lawsuit alleging that it subjected its residents to "dangerous and uninhabitable living conditions" that resulted in "pervasive bed bug and scabies infestations, filth and neglect, and a constellation of repeated and ongoing health and building code violations" (Gissim Inc. v. Scottsdale Insurance Company, No. 16-03306, E.D. N.Y., 2018 U.S. Dist. LEXIS 190712).

  • November 13, 2018

    New York Justice Tosses Suit Against Insurer Seeking Coverage For Alleged Vandalism

    NEW YORK — A New York justice on Oct. 16 granted an insurer’s motion for summary judgment and dismissed an insured’s breach of contract complaint seeking $60,479.74 for a vandalism claim, finding that the evidence prima facie establishes that the complaint is barred by the policy’s two-year limitation clause and that the insured’s 34-day delay in providing notice of its alleged loss was both “unreasonable and unjustified” (Ian Brenner v - Hermitage Insurance Company, No. 153615/2016, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 4792).

  • November 13, 2018

    High Court Refuses To Review Investor’s RICO Suit Against Title Insurers

    WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 13 denied a real estate investor’s petition of a writ of certiorari seeking review of the dismissal of his Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, lawsuit against two title insurance companies (Joseph J. Germinaro, et al. v. Fidelity National Title Insurance Company, et al., No. 18-429, U.S. Sup.).

  • November 12, 2018

    Judge Dismisses Insurers’ Defend Trade Secrets Act Dispute Per Parties’ Request

    TRENTON, N.J. — A New Jersey federal judge on Nov. 9 dismissed insurers' federal claims under the Defend Trade Secrets Act of 2016 (DTSA) and the Computer Fraud and Abuse Act (CFAA) in their lawsuit alleging that the defendant competitors "willfully and maliciously" targeted and solicited at least 15 of their employees for employment after the parties filed a stipulation and proposed order of dismissal with prejudice (Chubb INA Holdings Inc. [f/k/a The Chubb Corporation], et al. v. Michael Chang, et al., No. 16-2354, D. N.J.).

  • November 12, 2018

    Question Certified In Coverage Dispute Over Claim Cell Phone Tower Damaged Building

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on Nov. 9 certified a “critical question of state law” to the Washington Supreme Court, “namely, whether, under Washington law, the rule that an insurer is bound by representations made by its authorized agents overrides the rule that certificates of insurance cannot affect insurance coverage, when the latter rule is echoed by disclaimer language in the certificate at issue” (T-Mobile USA Inc. v. Selective Insurance Company of America, No. 17-35932, 9th Cir., 2018 U.S. App. LEXIS 31863).

  • November 12, 2018

    Accident Location Does Not Qualify As ‘Residence Premises,’ Or ‘Insured Location’

    NEW YORK — A New York justice on Oct. 30 found that an accident location where a police officer injured her finger does not qualify as either a "residence premises" or an "insured location" under a homeowners insurance policy, finding that the insurer has no duty to defend or indemnify its insured against the police officer’s underlying lawsuit (Mountain Valley Indemnity Company v. Alfonso Tornabene, et al., No. 150580/2017, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 5021).

  • November 9, 2018

    CGL Policy’s Employer’s Liability Exclusion Bars Coverage, 7th Circuit Affirms

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on Nov. 6 affirmed a lower federal court’s ruling that a commercial general liability insurance policy’s employer’s liability exclusion precludes coverage for Live Nation’s third-party complaint seeking indemnity from the insured for an underlying injury suffered by the insured’s employee (Acuity v. Kessor Enterprises, Ltd., No. 17-2950, 7th Cir., 2018 U.S. App. LEXIS 31360).

  • November 9, 2018

    Judge: Nursing Home’s Negligence Is Wholly Independent Of Third Party’s Activities

    CHICAGO — An Illinois federal judge on Nov. 6 held that a nursing home is not entitled to coverage under the "Blanket Additional Protected Persons" provision of a health care professional liability insurance policy that was issued to an ambulance service company because the nursing home’s alleged negligence is wholly independent of the insured’s activities (Alden Estates of Shorewood, Inc. v. Arch Specialty Insurance Company, No. 18-3826, N.D. Ill., 2018 U.S. Dist. LEXIS 189509).

  • November 9, 2018

    New York Justice Rules In Homeowners Insurer’s Favor In Suit Over Drowning Death

    NEW YORK — A New York justice on Oct. 30 found that a homeowners insurer has no duty to defend or indemnify its insured against an underlying negligence lawsuit arising from a drowning death, finding that the insurer demonstrated that the insured did not reside at the premises at the time of the incident as required under the policy (Tower Insurance Company of New York v. Laura E. Kreft, et al., No. 158967/2016, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS

  • November 8, 2018

    Fact Issues Exist As To Whether Policy Covers Credit Union’s Alleged $1.3M Loss

    GRETNA, La. — A Louisiana appeals panel on Nov. 7 held that there are genuine issues of material fact regarding whether an armored car cargo liability insurance policy provides or precludes coverage for a credit union’s alleged $1,348,000 loss, reversing and remanding a lower court in part (ASI Federal Credit Union v. Certain Underwriters at Lloyd's of London, No. 18-CA-164 c/w 18-CA-306, La. App., 5th Cir.).

  • November 8, 2018

    Claims Arising From 2 Bridge Collapses Are Related Claims, Appeals Panel Affirms

    RICHMOND, Va. — Coverage for underlying claims filed against an insured as a result of two bridge collapses is subject to a policy’s $3 million liability limit, rather than the policy’s $5 million aggregate limit, because the claims are related claims that arose from the same design failure by the insured, the Fourth Circuit U.S. Court of Appeal said Nov. 7 in affirming a district court’s opinion (Stewart Engineering Inc. v. Continental Casualty Co., et al., No. 18-1386, 4th Cir., 2018 U.S. App. LEXIS 31521).

  • November 7, 2018

    Insurer Challenges Finding That $10M Judgment Was Reasonable In Montana High Court

    HELENA, Mont. — A professional liability insurer recently asked the Montana Supreme Court to reverse a lower court’s ruling that held that a $10 million stipulated judgment against its insured was reasonable, contending that the lower court “applied an improper legal framework” to decide the reasonableness of the stipulated judgment (Draggin' Y Cattle Company, Inc., et al. v. Larry Addink, et al., No. 17-0731, Mon. Sup.).

  • November 5, 2018

    Judge Dismisses UCL, FAL Claims Over Insurance Scheme, Allows Amendment

    LOS ANGELES — A California federal judge on Nov. 2 granted motions to dismiss claims for violation of California’s unfair competition law (UCL), false advertising law (FAL) and financial elder abuse asserted by a putative class of purchasers of insurance who allege that insurers engaged in an unlawful scheme that involved one insurer profiting from the sale of its policies on behalf of two other insurers, holding that the insureds could amend their UCL and FAL claims to properly plead reliance (Simon Levay, et al. v. AARP Inc., et al., No. 17-09041, C.D. Calif., 2018 U.S. Dist. LEXIS 116585).

  • November 5, 2018

    No Coverage For $1.7M IPhone Theft From Warehouse, 6th Circuit Affirms

    CINCINNATI —The Sixth Circuit U.S. Court of Appeals on Nov. 2 affirmed a lower federal court’s dismissal of an insured’s breach of contract and bad faith lawsuit against its insurer seeking coverage for $1,654,860 in iPhones stolen from a warehouse (Berrylane Trading, Inc. v. Transportation Insurance Company, No. 18-3144, 6th Cir., 2018 U.S. App. LEXIS 31094).

  • November 5, 2018

    High Court Refuses To Review Lawsuit Seeking $172.8M For Insurers’ Alleged Scheme

    WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 5 denied an insured’s petition for writ of certiorari seeking review of the Third Circuit U.S. Court of Appeals’ dismissal of his lawsuit seeking $172.8 million in damages for claims that his insurers conspired to cause him harm by intentionally and deceitfully decreasing his policy limits (Alfred DeGennaro v. American Bankers Insurance Company of Florida, et al., No. 18-289, U.S. Sup.).

  • November 5, 2018

    Judge Addresses Motions To Dismiss Deceptive Acts, Illegal Kickback Lawsuit

    HONOLULU — Addressing motions to dismiss, a Hawaii federal judge on Nov. 2 dismissed in part claims in a homeowner’s second amended complaint alleging unfair or deceptive acts or practices in the placement of insurance, “with unreasonable and inflated premiums” that included “improper compensation through illegal kickback or captive reinsurance arrangements” (Julia Wieck v. CIT Bank, N.A., et al., No. 16-00596, D. Hawaii, 2018 U.S. Dist. LEXIS 188022).

  • October 31, 2018

    South Carolina Appeals Panel Reverses Ruling On Insured’s Bad Faith Claim

    COLUMBIA, S.C. — A trial court erred in granting an insured’s motion for summary judgment on a bad faith claim because the facts do not show that the insurer unreasonably breached the contract of insurance when it denied coverage for an underlying personal injury claim filed against the insured, the South Carolina Court of Appeals said Oct. 31 (Three Blind Mice LLC, d/b/a The Blind Horse Saloon v. Colony Insurance Co., No. 2018-UP-402, S.C. App., 2018 S.C. App. Unpub. LEXIS 399).

  • October 30, 2018

    Abuse, Molestation Endorsement Does Not Bar Coverage For Human Trafficking Claims

    BALTIMORE — A Maryland federal judge on Oct. 25 held that a commercial general liability insurance policy’s “Abuse or Molestation Endorsement” does not bar coverage for underlying lawsuits brought by alleged victims of a human trafficking and prostitution ring, finding that