We use cookies on this site to enable your digital experience. By continuing to use this site, you are agreeing to our cookie policy. close

Mealey's Emerging Insurance Disputes

  • July 13, 2018

    Coverage Suit Over Claims Club Misappropriated Images On Social Media Terminated

    TRENTON, N.J. — A New Jersey federal judge issued an order on July 10 administratively terminating a commercial general liability insurer’s declaratory judgment lawsuit challenging coverage for underlying claims that its club owner insured misappropriated images and likenesses of alleged models and actresses without their consent for use in its advertising materials on social media after the insurer announced the underlying parties reached a settlement in principle (Capitol Specialty Insurance Corporation v. 35 Club, LLC, et al., No. 18-03399, D. N.J.).

  • July 13, 2018

    Judge Finds It Is Conceivable That Negligence Claim Is Covered Under CGL Policy

    SPOKANE, Wash.— A Washington federal judge on July 11 held that whether an underlying negligence claim arises solely from an insured’s professional services is a question of fact, finding a commercial general liability insurer has a duty to defend its insured (Evanston Insurance Company v. Rells Fire Protection Inc., et al., No. 17-00249, E.D. Wash., 2018 U.S. Dist. LEXIS 115779).

  • July 13, 2018

    Federal Judge: Breach Of Contract Exclusion Bars Errors And Omissions Coverage

    GREEN BAY, Wis. — A Wisconsin federal judge on July 5 granted an insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing errors and omissions coverage for an underlying breach of contract against its anaerobic digester engineer insured, finding that the policy is not illusory and any coverage provided is barred by the breach of contract exclusion (Crum & Forster Specialty Insurance Company v. GHD Inc. n/k/a DVO Inc., No. 16-1619, E.D. Wis., 2018 U.S. Dist. LEXIS 111827).

  • July 12, 2018

    Panel: Insured Failed To Comply With Errors, Omissions Policy’s Notice Requirement

    ATLANTA — The 11th Circuit U.S. Court of Appeals on July 11 found that an insurance brokerage company failed to comply with the notice requirement of its errors and omissions insurance policy, affirming a lower court’s dismissal of the company’s breach of contract, negligence and bad faith lawsuit against its insurer (Johnson & Bryan, Inc. v. Utica Mutual Insurance Company, et al., No. 17-15337, 11th Cir., 2018 U.S. App. LEXIS 18795).

  • July 11, 2018

    6th Circuit Affirms No Coverage Ruling For $212M FCA Settlement

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on July 10 affirmed a lower federal court’s ruling that denied a bank insured $75 million in insurance coverage for a $212.5 million settlement of an underlying False Claims Act (FCA) investigation into its underwriting of government-backed mortgages (First Horizon National Corporation, et al. v. Houston Casualty Co., et al., Nos. 17-5767 and 5844, 6th Cir., 2018 U.S. App. LEXIS 18684).

  • July 11, 2018

    Judge: State Law Claim For Pure Bill Of Discovery Is Preempted By Federal Law

    MIAMI — A Florida federal judge on June 22 dismissed a condominium unit owner’s lawsuit seeking a pure bill of discovery under Florida law in a flood coverage dispute, finding that the state law claim against the federal flood insurer and an insurance agency is preempted by federal law (Peter Roth v. Wright National Flood Insurance Co., No. 18-21653, S.D. Fla., 2018 U.S. Dist. LEXIS 105810).

  • July 11, 2018

    Panel Affirms Rulings In Coverage Dispute Over Doctor’s 30-Year Abuse Of Minors

    NEW YORK— The Second Circuit U.S. Court of Appeals on July 6 refused to disturb a lower federal court’s rulings in a coverage dispute arising from underlying claims of corporate negligence, breach of fiduciary or confidential relationship and breach of the special duty of care owed to children against a hospital insured, finding that the policies’ general liability and hospital professional liability coverage was triggered (Pacific Employers Insurance Company v. Saint Francis Care Inc., et al., Nos. 16-2747, 16-2783 and 16-2894, 2nd Cir., 2018 U.S. App. LEXIS 18375).

  • July 11, 2018

    Excess Insurers Seek To Dismiss Or Stay Pfizer’s Delaware Coverage Suit

    WILMINGTON, Del. — Two excess insurers have asked the Delaware Superior Court to dismiss with prejudice or stay Pfizer Inc.’s lawsuit seeking coverage for underlying class action claims that its directors and officers made misrepresentations and omissions as to the safety of two COX-2 inhibitor drugs, arguing that their related federal lawsuit is the more appropriate forum (Pfizer Inc. v. Arch Specialty Insurance Company and U.S. Specialty Insurance Company, N18C-01-310, Del. Super.).

  • July 10, 2018

    2nd Circuit Affirms $5.8M Judgment In Insured’s Favor In Computer Fraud Dispute

    NEW YORK — The Second Circuit U.S. Court of Appeals on July 6 affirmed a lower federal court’s ruling that a firm's multimillion dollar loss due to a fraudulent wire transfer scheme constituted computer fraud under the company's executive protection insurance policy (Medidata Solutions Inc v. Federal Insurance Company, No. 17-2492, 2nd Cir., 2018 U.S. App. LEXIS 18376).

  • July 6, 2018

    Employee’s Dishonest Acts Constitute 1 ‘Occurrence,’ New York Justice Says

    ALBANY, N.Y. — A New York justice on July 2 held that numerous dishonest acts that were committed by an insured’s employee over multiple insurance policy periods constitute one "occurrence" under the business insurance policy’s employee dishonesty coverage (Dan Tait, Inc. v. Farm Family Casualty Insurance Company, No. 7910-17, N.Y. Sup., Albany Co., 2018 N.Y. Misc. LEXIS 2686).

  • July 3, 2018

    Criminal Acts Exclusion Bars Coverage For Restaurant Manager, Court Says, Reverses

    ANNAPOLIS, Md. — The Maryland Court of Special Appeals on June 28 affirmed a lower court’s ruling that insurers have a duty to defend a restaurant owner insured against underlying claims that it invaded women’s rights of private occupancy of a restroom when its manager conducted unauthorized video surveillance, but found that the lower court erred in not concluding that the criminal acts exclusion bars coverage for the claims against the manager (Harleysville Preferred Insurance Company, et al. v. Rams Head Savage Mill LLC, et al., No. 2409, September Term, 2016, Md. Spec. App., 2018 Md. App. LEXIS 625).

  • July 3, 2018

    Judge Closes Coverage Case Over Fraudulent Tax Returns Following Settlements

    BLUEFIELD, W.Va. — A West Virginia federal judge on June 26 ordered the court clerk to retire from the active docket a coverage dispute arising from underlying lawsuits alleging that the insured's employee filed fraudulent tax returns after the parties announced that settlements have been reached (Ohio Security Insurance Co. v. K R Enterprises, Inc., et al., No. 15-16264, S.D. W.Va.).

  • July 2, 2018

    Panel Affirms Extinguishment Of Firm’s Lien For Fees In False Claims Act Suit

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on June 29 affirmed a lower federal court’s extinguishment of a law firm’s lien for its fees and expenses in a 12-year-old qui tam suit in which relators accused State Farm Fire and Casualty Co. of filing false flood insurance after Hurricane Katrina (United States of America, ex rel, Cori Rigsby, et al. v. State Farm Fire & Casualty Company, et al. v. Gilbert, L.L.P., No. 17-60720, 5th Cir., 2018 U.S. App. LEXIS 17958).

  • June 29, 2018

    9th Circuit Refuses To Rehear Coverage Dispute Over False Claims Lawsuit

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 25 denied an insurer’s petition asking it to reconsider its earlier ruling that a lower federal court erred in holding that an insurer has no duty to defend or indemnify Office Depot Inc. in an underlying qui tam lawsuit (Office Depot Inc. v. AIG Specialty Insurance Company, No. 17-55125, 9th Cir.).

  • June 29, 2018

    Shooting Incident Qualifies As ‘Gross Negligence,’ 8th Circuit Rules In Reversal

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on June 28 found that repeatedly shooting and encouraging others to shoot a handgun "in the general direction" of a small lake in a residential area, which resulted in the death of a young child, qualifies as "gross negligence” under an insurance policy, vacating and remanding a lower court’s ruling (Federal Insurance Company, et al. v. Great American Insurance Company, No. 16-4045, 8th Cir., 2018 U.S. App. LEXIS 17782).

  • June 29, 2018

    Panel Reverses, Remands Order Disqualifying Entire Law Firm From Case

    SANTA ANA, Calif. — The Fourth District California Court of Appeal on June 26 reversed and remanded a trial court’s order disqualifying an entire law firm from representing an insurer in a coverage dispute over the insured’s manufacture of defective flexible toilet connectors after determining that the decision must be reconsidered in light of the fact that the attorney, who had previously done work for the insured, left the law firm following the trial court’s order of disqualification (Fluidmaster Inc. v. Fireman’s Fund Insurance Co., No. G055469, Calif. App., 4th Dist., Div. 3, 2018 Cal. App. Unpub. LEXIS 4396). 

  • June 29, 2018

    Judge: Insurer Has No Duty To Defend Claims Against Insured’s Work

    NEW YORK — A construction contractor exception to a professional liability exclusion does not apply because an insured was not contracted to perform any construction work, a New York federal judge ruled June 27, finding that an insurer had no duty to defend a professional negligence claim (Liberty Insurance Corp. v. WSP USA Inc., No. 17-4398, S.D. N.Y., 2018 U.S. Dist. LEXIS 107896).

  • June 28, 2018

    Panel: Insurer Has No Duty To Pay Legal Fees For Insured’s General Counsel

    SAN DIEGO — A California appeals panel on June 26 affirmed a lower court’s ruling that an insurer has no duty to pay $106,102.63 in legal fees that were purportedly incurred by the insured’s general counsel in defending a lawsuit arising from the sexual abuse of a foreign exchange student (Pacific Intercultural Exchange v. Scottsdale Insurance Company, No. D071478, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 4319).

  • June 28, 2018

    Florida Panel Hears Arguments On Damages Where Bonds Were Improperly Procured

    WEST PALM BEACH, Fla. — The Florida Fourth District Court of Appeal on June 19 heard oral arguments in an appeal over damages on a claim for negligent procurement of insurance, a matter that the appellant argues is a case of first impression in Florida (The Lexington Club Community Association, Inc., et al. v. Love Madison, Inc., No. 4D17-1843, Fla. App., 4th Dist.).

  • June 28, 2018

    Insurer Asks 11th Circuit To Reverse Coverage Ruling For $1.7M Fraud Loss

    ATLANTA — An insurer recently filed an appeal in the 11th Circuit U.S. Court of Appeals challenging a lower federal court’s ruling that its insurance policy is ambiguous and, as a result, that it owes coverage for the insured’s $1,717,000 loss caused by computer and funds transfer fraud (Principle Solutions Group LLC v. Ironshore Indemnity Inc., No. 17-11703, 11th Cir.).