Mealey's Emerging Insurance Disputes
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January 16, 2019
Coverage Owed For Malicious Prosecution Claim, Illinois Majority Says In Reversal
ELGIN, Ill. — A majority of an Illinois appeals court on Jan. 15 held that a lower court erred in finding that coverage for an underlying malicious prosecution claim was triggered by the initiation of a wrongfully convicted man’s prosecution and not by his subsequent exoneration, reversing and remanding the dismissal of a breach of contract and improper claims practices lawsuit against two insurers (Rodell Sanders, et al. v. Illinois Union Insurance Company, et al., No. 1-18-0158, Ill. App., 1st Dist., Second Div., 2019 Ill. App. LEXIS 16).
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January 16, 2019
Alabama Court: No Fact Issue As To Advice Agent Gave On Business Income Coverage
MONTGOMERY, Ala. — The Alabama Supreme Court on Dec. 21 held that a mattress manufacturer insured failed to present substantial evidence that created a genuine issue of material fact regarding the advice an insurance agent gave in 2012 with respect to the insured obtaining business income coverage, further finding that the insured did not establish that the agent voluntarily assumed a duty to advise it as to the adequacy of its insurance coverage (Somnus Mattress Corporation v. Stephen Hilson and Crutchfield & Graves Insurance Agency, LLC, No. 1170250, Ala. Sup., 2018 Ala. LEXIS 139).
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January 16, 2019
4th Circuit Considers Malpractice Insurer’s Duty When Insured Flees
RICHMOND, Va. — A federal appeals court is set to decide whether a medical malpractice insurer should have defended against liability when the insured left the country, or whether its insured’s failure to communicate prevented it from mounting a defense in his shoes (Claudia M. Mora, et al. v. Lancet Indemnity Risk Retention Group Inc., No. 18-1566, 4th Cir.).
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January 15, 2019
Insured Appeals Take-Nothing Judgment In Superstorm Sandy Dispute In 2nd Circuit
NEW YORK — An insured on Nov. 26 appealed to the Second Circuit U.S. Court of Appeals a lower federal court’s Sept. 28 ruling that entered a take-nothing judgment after adopting in its entirety 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 (David Clutter v. William B. Long, et al., No. 18-3520, 2nd Cir.).
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January 14, 2019
Panel: Employer’s Liability, Texas Abuse Or Molestation Exclusions Bar Coverage
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Jan. 11 affirmed a lower federal court’s finding that employer’s liability and Texas abuse or molestation exclusions in commercial general liability and commercial liability umbrella insurance policies excuse the insurer from defending its insured against an underlying negligence lawsuit arising from the alleged attack and sexual assault of one of its employees by another employee (United Fire and Casualty Company v. Kent Distributors, Inc., No. 18-50134, 5th Cir., 2019 U.S. App. LEXIS 1025).
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January 10, 2019
Disney Insurer Asks 9th Circuit To Reverse Arbitration Ruling In ‘Pink Slime’ Suit
SAN FRANCISCO — A Walt Disney Co. insurer recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that granted the insured’s motion to compel arbitration in a coverage dispute stemming from "pink slime" defamation claims against Disney’s subsidiary (The Walt Disney Co. v. AIG Specialty Insurance Co., No. 17-56840, 9th Cir.).
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January 10, 2019
Judge: Insurer Owes Defense To Battery Manufacturer In Product Recall Dispute
CHICAGO — An Illinois federal judge on Dec. 20 found that an insurer has a duty to defend its battery manufacturer insured against underlying counterclaims arising from a product recall of battery-operated window shades (Great American E&S Insurance Co. v. Power Cell LLC, No. 17-6658, N.D. Ill., 2018 U.S. Dist. LEXIS 215828).
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January 10, 2019
Federal Judge Dismisses Coverage Suit Arising From Fatal Shooting At Hunting Club
MONTGOMERY, Ala. — An Alabama federal judge on Dec. 26 dismissed a commercial general liability insurer’s declaratory judgment lawsuit disputing coverage for an underlying lawsuit arising from a fatal shooting that occurred at a hunting club (Scottsdale Insurance Company v. Calhoun Hunting Club and Lounge, et al., No. 18-475, M.D. Ala., 2018 U.S. Dist. LEXIS 215968).
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January 10, 2019
N.Y. Justice: Insurers Have Duty To Defend Hulk Hogan’s Suit Against Talent Agency
NEW YORK — A New York justice on Dec. 21 held that primary and excess commercial general liability insurers have a duty to defend their talent agency insured and its employee against an underlying lawsuit brought by professional wrestler Hulk Hogan, further finding that the insureds are entitled to monetary damages resulting from the insurers’ breach of contract as well as legal fees and costs (Zurich American Insurance Company, et al. v. Don Buchwald & Associates, Inc., et al., No. 655533/16, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 6402).
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January 10, 2019
Insurers Say PG&E ‘Places Profits Over Public Safety’ In California Camp Fire Suit
SACRAMENTO, Calif. — Four insurers standing in the shoes of their Butte County, Calif., insureds filed one of four lawsuits in a California Superior Court on Dec. 21, alleging that PG&E Corp. and/or Pacific Gas & Electric Co.’s “well-documented disregard for safety regulations and risk management practices” and “blind eye towards the use of effective maintenance and inspection practices for their facilities and equipment” triggered various factors that caused and/or contributed to causing the “most destructive and deadly wildfire California has ever experienced” (United Services Automobile Association, et al. v. Pacific Gas and Electric Co., No. 34-2018-00247013, Calif. Super., Sacramento Co.).
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January 9, 2019
Federal Judge Again Dismisses Suit Seeking Directors, Officers Liability Coverage
TAMPA, Fla. — After allowing directors and officers of an insured beef company to amend their declaratory judgment complaint against their insurer, a Florida federal judge on Jan. 3 entered judgment in favor of the insurer after finding that the policy 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 217936).
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January 9, 2019
Judge Allows Insured To Amend Complaint In Professional Liability Coverage Dispute
NEW ORLEANS — A Louisiana federal judge on Jan. 7 partly granted a professional liability insurer and a claims investigator’s motion to dismiss an insured’s complaint, denied the motion without prejudice in part and granted the insured leave to amend its complaint in a coverage dispute arising from an administrative services contract the insured entered into with the state of New Jersey (Hammerman & Gainer, LLC v. Lexington Insurance Co., No. 18-6729, E.D. La., 2019 U.S. Dist. LEXIS 2807).
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January 8, 2019
8th Circuit Affirms No Coverage Ruling For Claim Insured Violated TCPA
ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Jan. 3 affirmed a lower federal court’s ruling in favor of an insurer in a coverage dispute arising from a lawsuit alleging that its insured violated the Telephone Consumer Protection Act, finding that the appellant has failed to show that the insured did not receive adequate notice of the policy exclusion for “distribution of material in violation of statutes” (American Family Mutual Insurance Company v. Vein Centers for Excellence, Inc., et al., No. 17-3266, 8th Cir., 2019 U.S. App. LEXIS 98).
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January 4, 2019
Pennsylvania Elected Leaders Appeal Federal Judge’s Constitutional Rights Ruling
HARRISBURG, Pa. — Elected leaders of the Pennsylvania General Assembly on Jan. 3 appealed a Pennsylvania federal judge’s ruling in favor of the Pennsylvania Professional Liability Joint Underwriting Association (JUA) that certain sections of Pennsylvania Act 41 are unconstitutional in violation of the U.S. Constitution’s Fifth and 14th Amendments (Pennsylvania Professional Liability Joint Underwriting Association v. Tom Wolf, et al., No. 18-1308, M.D. Pa.).
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January 3, 2019
Panel Affirms $914,390 Award Against Insurance Agency, Errors & Omissions Insurer
NEW ORLEANS — A Louisiana appeals panel on Dec. 12 affirmed a lower court’s $914,390.51 judgment against an insurance agency, its employee and its errors and omissions insurer for negligently failing to procure commercial general liability insurance that was requested by an oyster harvester and seller (Breton Sound Oyster Company, LLC v. Stiel Insurance Co. of New Orleans Inc., et al., No. 2017-CA-0955, La. App., 4th Cir., 2018 La. App. LEXIS 2497).
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January 2, 2019
Panel Affirms Decision Declining Jurisdiction Over Suit Involving Improper Burials
CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Dec. 26 affirmed a lower federal court’s ruling that dismissed an insurer’s declaratory judgment lawsuit disputing coverage for underlying claims that its funeral home insured failed to discover or prevent a cemetery from improperly disposing of bodies (Massachusetts Bay Insurance Company v. Christian Funeral Directors, Inc., et al., No. 18-5267, 6th Cir., 2018 U.S. App. LEXIS 36497).
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January 2, 2019
Louisiana Majority Reverses Ruling In Coverage Dispute Involving Day Care Injury
LAKE CHARLES, La. — A majority of a Louisiana appeals court on Dec. 28 reversed and remanded a lower court’s ruling that denied a homeowners insurer’s motion for summary judgment in a lawsuit seeking damages for bruises and bite marks incurred by a 15-month-old daughter while she was in the insured’s care, finding that it is “beyond dispute” that if the insured was not operating a day care from her house, the child would not have been bitten (Kerri A. Latour, et al. v. Allstate Ins. Co., et al., No. 18-395, La. App., 3rd Cir., 2018 La. App. LEXIS 2664).
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December 19, 2018
Pennsylvania Law Violates Insurance Association’s Constitutional Rights, Judge Says
HARRISBURG, Pa. — A Pennsylvania federal judge on Dec. 18 entered judgment in favor of the Pennsylvania Professional Liability Joint Underwriting Association (JUA), declaring that Sections 3, 4 and 5 of Pennsylvania Act 41 are unconstitutional in violation of the Fifth and 14th Amendments to the U.S. Constitution (Pennsylvania Professional Liability Joint Underwriting Association v. Tom Wolf, No. 18-1308, M.D. Pa., 2018 U.S. Dist. LEXIS 212542).
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December 10, 2018
High Court Denies Insurers’ Petition To Review Dispute Over Federal Maritime Law
WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 10 denied two insurers’ petition to determine whether a contract to provide services to oil wells that are located on fixed platforms in navigable waters in Louisiana is a “maritime” contract when a vessel played a substantial role in the contract performance (Liberty Mutual Insurance Company, et al. v. Carrizo Oil & Gas, Inc., No. 18-436, U.S. Sup.).
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December 10, 2018
Contract Exclusion Bars Coverage Of Suit Over Noncompete, 8th Circuit Affirms
ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Dec. 6 affirmed a lower federal court’s ruling in favor of an insurer in a breach of contract and bad faith lawsuit seeking coverage for an underlying lawsuit alleging violation of a noncompetition covenant (Robert Mau, et al. v. Twin City Fire Insurance Co., No. 17-3392, 8th Cir., 2018 U.S. App. LEXIS 34358).