Mealey's Emerging Insurance Disputes

  • November 22, 2017

    No Coverage Owed For Underlying Suits Alleging Statutory Violations

    CHARLOTTE, N.C. — An insurer has no duty to defend its insured in two underlying class actions alleging violations of the federal Driver’s Privacy Protection Act (DPPA) because the business liability policy’s statutory violation exclusion clearly bars coverage, a North Carolina federal judge said Nov. 17 in granting the insurer’s motion for judgment on the pleadings (Hartford Casualty Insurance Co. v. Ted A. Greve & Associates, P.A., et al., No. 17-183, W.D. N.C., 2017 U.S. Dist. LEXIS 190603).

  • November 21, 2017

    Companies: Fracking Plaintiffs ‘Take Liberty With The Facts’ In Disposal Lawsuit

    LITTLE ROCK, Ark. — Hydraulic fracturing companies on Nov. 16 filed a brief in Arkansas federal court contending that residents who have sued them alleging property damage as a result of the companies’ disposal of fracking waste “consistently take liberty with the facts to add more baseless sanctions noise to this case” (Bobbie Hill, et al. v. Southwestern Energy Co., No. 12-500, E.D. Ark.).

  • November 21, 2017

    Insurer’s Duty To Defend Church, Elders Is Ongoing, Federal Judge Rules

    WICHITA, Kan. — A Kansas federal judge on Nov. 13 held that an insurer has not paid its limit as a result of a judgment or settlement of an underlying litigation arising from sexual abuse claims against the pastor of a church and, therefore, the insurer is still obligated to provide a defense to the church and its elders against two underlying lawsuits (Brotherhood Mutual Insurance Company v. M.M., a minor by and through his natural mother, et al., No. 16-1362, D. Kan., 2017 U.S. Dist. LEXIS 187525).

  • November 17, 2017

    1st Circuit: Insured Not Entitled To Separate Counsel To Defend Against Suit

    BOSTON — The First Circuit U.S. Court of Appeals on Nov. 15 found that the presence of an embezzlement counterclaim in a dispute between an employer insured and its former employee fails to generate a conflict of interest that entitles the insured to separate counsel to defend against an underlying wrongful termination lawsuit at its employment practices liability insurer’s expense (Mount Vernon Fire Insurance Co. v. VisionAid Inc., 15-1351, 1st Cir., 2017 U.S. App. LEXIS 22906).

  • November 16, 2017

    Court Affirms No Coverage For Student’s Sexual Assault Lawsuit Against Teacher

    HARRISBURG, Pa. — The Pennsylvania Superior Court on Nov. 14 affirmed a lower court’s ruling that an insurer has no duty to defend or indemnify a music teacher against a student’s lawsuit alleging sexual assault (Old Republic Insurance Company v. Matthew Stevens, et al., No. 1903 MDA 2016, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 4188).

  • November 15, 2017

    Objections To Insurer’s Discovery Requests Overruled In Dispute Over Employee Theft

    PHILADELPHIA — A Pennsylvania federal magistrate on Nov. 14 granted an insurer’s motion to overrule objections to its request for the production of documents in a coverage dispute arising from the alleged theft of an insured’s employee stock ownership plan assets by a former employee (Barbie Spear, in her capacity as trustee of the Alliance Holdings, Inc. Employee Stock Ownership Plan and Alliance Holdings, Inc. Employee Stock Ownership Plan, Plaintiffs v. Westfield Insurance Company, No. 15-00582, E.D. Pa., 2017 U.S. Dist. LEXIS 188193).

  • November 15, 2017

    Federal Judge: No Employment Practices Coverage Owed For Age Discrimination Claims

    DENVER — A Colorado federal judge on Nov. 14 granted an insurer’s motion for summary judgment in a coverage dispute over underlying age discrimination and retaliation claims against its insured, finding that the insured failed to give timely notice of the claim (Scottsdale Indemnity Co. v. Convercent Inc., et al., No 17-01236, D. Colo., 2017 U.S. Dist. LEXIS 187939).

  • November 14, 2017

    Parties Submit Arguments To 7th Circuit On Duty To Defend In Class Action

    SAN FRANCISCO — An insurer and a real estate broker recently submitted their arguments in the Seventh Circuit U.S. Court of Appeals, disputing whether an exclusion in the policy precludes coverage in relation to an underlying lawsuit in which class members allege that the broker and individual agents received secret profits while acting as their real estate agents (Hanover Insurance Co. v. Paul M. Zagaris Inc. et al., 17-15477, 9th Cir.).

  • November 14, 2017

    Insurer’s Conduct Belies Fact That It Was Prejudiced By Doctor’s Lack Of Cooperation

    GREENBELT, Md. — A Maryland federal judge held Oct. 16 that a professional liability insurer is liable for the money damages incurred by its insureds in a medical malpractice dispute, rejecting the insurer’s argument that a doctor insured’s failure to cooperate was a sufficient basis to deny coverage and finding instead that the insurer was prejudiced by its own choice not to defend the malpractice lawsuit from the beginning (Claudia M. Mora, et al. v. Lancet Indemnity Risk Retention Group, Inc., No. 16-960, D. Md., 2017 U.S. Dist. LEXIS 171122).

  • November 14, 2017

    Suit Over Loan Closing Programs Administratively Closed After Settlement Announced

    MILWAUKEE — A Wisconsin federal judge on Nov. 1 administratively closed a coverage dispute arising from the insured’s mortgage loan closing services after the remaining parties announced that they have reached a settlement (Fiserv Solutions Inc. v. Endurance American Specialty Insurance Co., et al., No. 11-0603, E.D. Wis.).

  • November 14, 2017

    Judge Dismisses Breach Of Contract Claim In Coverage Dispute Over Mortgage Fraud

    SEATTLE — A Washington federal judge on Nov. 13 dismissed a breach of contract claim brought by the Federal Deposit Insurance Corp. against fourth-level excess insurers in a coverage dispute arising from fraudulent mortgage loans, finding that third-level excess insurance has not been exhausted (Federal Deposit Insurance Corp. v. Arch Insurance Company, et al., No.14-0545, W.D. Wash., 2017 U.S. Dist. LEXIS 187224).

  • November 13, 2017

    Wine Collector Asks Panel To Reverse No Coverage Ruling For Alleged $18M Wine Fraud

    SANTA ANA, Calif. — A high-end wine collector has asked a California appeals court to reverse a lower court’s judgment in favor of an insurer in his lawsuit seeking coverage for an alleged multimillion-dollar loss to his wine collection due to fraud (David Doyle v. Fireman's Fund Insurance Company, No. G054197, Calif. App., 4th Dist., Div. 3).

  • November 10, 2017

    S.D. High Court: Professional Services Exclusion Bars Coverage For Surveying Error

    PIERRE, S.D. — A designated professional services endorsement excludes all potential insurance coverage for any property damage caused by a land-surveying error, the South Dakota Supreme Court ruled Nov. 8, finding that a trial judge erred in granting summary judgment to a project architect (Western National Mutual Insurance Co. v. TSP Inc., No. 27798, S.D. Sup.).

  • November 10, 2017

    Judge: 3 Policy Exclusions Bar Coverage For Damage Caused By Marijuana Operations

    DETROIT — Finding that tenants' use of an insured’s commercial property units to grow marijuana was illegal or at the very least dishonest, a Michigan federal judge on Nov. 8 held that coverage for the insured’s losses arising from this activity is barred by an insurance policy’s illegal/dishonest acts provision, as well as two other policy exclusions (K.V.G. Properties Inc. v. Westfield Insurance Co., No. 16-11561, E.D. Mich., 2017 U.S. Dist. LEXIS 185005).

  • November 9, 2017

    Judge: Sexual Misconduct Suit Against Psychiatrist Potentially Triggers Coverage

    CHICAGO — An Illinois federal judge on Nov. 8 found that an underlying lawsuit alleging sexual misconduct against a psychiatrist insured suggests an error in the insured’s professional treatment and, therefore, potentially triggers coverage under a professional liability insurance policy (Professional Solution Insurance Co. v. Dale Giolas, M.D, et al., No. 16-9868, N.D. Ill., Eastern Div., 2017 U.S. Dist. LEXIS 184995).

  • November 9, 2017

    California Panel: No Coverage Owed For Suits Alleging Liability For Opioid Epidemic

    SANTA ANA, Calif. — A California appeals panel on Nov. 6 affirmed a lower court’s finding that commercial general liability insurers have no duty to defend pharmaceutical manufacturers and distributors against two underling lawsuits alleging that they engaged in a fraudulent scheme to promote the use of opioids for long-term pain to increase corporate profits, finding that the underlying actions can be read only as being based on the insureds’ deliberate and intentional conduct that produced injuries that were neither unexpected nor unforeseen (The Traveler's Property Casualty Company of America, et al. v. Actavis Inc., et al., No. G053749, Calif. App., 4th Dist., Div. 3, 2017 Cal. App. LEXIS 976).

  • November 8, 2017

    No Professional Liability Coverage Owed For Claims Arising From Foreclosure Suit

    GREENBELT, Md. — A Maryland federal judge on Nov. 6 found that a lawyers professional liability insurer has no duty to defend or indemnify its insured against underlying claims arising from the insured’s handling of the closing of the short sale of an estate’s property (James River Insurance Co. v. Brick House Title, LLC, No. 16-3464, D. Md., 2017 U.S. Dist. LEXIS 183225).

  • November 6, 2017

    Federal Judge: No Evidence Insured’s Race Prompted Insurer’s Coverage Decisions

    LITTLE ROCK, Ark. — An Arkansas federal judge on Oct. 27 dismissed with prejudice an insured’s 42 U.S. Code Section 1981 claim against his insurer, finding that there was no evidence that the insured’s race prompted the insurer’s coverage decisions regarding damage caused by two storms (Kasib Tauheed Bilal v. IDS Property & Casualty Insurance Co., No. 16-675, E.D. Ark., 2017 U.S. Dist. LEXIS 178317).

  • November 3, 2017

    Court Erred In Applying 2-Year Statute Of Limitations To Claim Against Broker

    LAKELAND, Fla. — A Florida appeals panel on Nov. 3 found that a lower court improperly granted summary judgment in favor of an insurance broker on a intentional misrepresentation claim, concluding that the court should have applied a six-year statute of limitations instead of a two-year statute of limitations in determining whether the claim was valid (Haji Tehrani v. 1st Source Insurance Inc., et al., No. 2D16-1020, Fla. App., 2nd Dist., 2017 Fla. App. LEXIS 15883).

  • November 2, 2017

    Florida Panel Affirms Stay Of Equine Mortality Coverage Suit Pending Arbitration

    MIAMI — A Florida appeals panel on Nov. 1 affirmed a lower court’s ruling granting an insurer’s motion to stay an insured’s lawsuit seeking equine mortality coverage for a loss arising from the death of a horse and compelling arbitration (Lucky Star Horses, Inc., et al. v. Diamond State Insurance Co., No. 3D17-725, Fla. App., 3rd Dist., 2017 Fla. App. LEXIS 15718).