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Mealey's Emerging Insurance Disputes

  • January 17, 2020

    Expert Allowed In Suit Seeking Coverage For Money Lost To Phishing Scheme

    RICHMOND, Va. — An insurance company’s expert can testify in a coverage dispute for money paid by a company that got duped by a phishing scheme because he meets all of the requirements for an expert witness, a Virginia federal judge held Jan. 15 (Quality Plus Services, Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 3:18-cv-454, E.D. Va., 2020 U.S. Dist. LEXIS 7337).

  • January 15, 2020

    Professional Liability Insurer Was Not Responsible For Consent Judgment, Panel Says

    KANSAS CITY, Mo. — A Missouri appeals court on Jan. 14 held that a lower court did not misapply the law in finding that a professional liability insurer did not violate its duty to defend and was not responsible for a consent judgment between its doctor insured and a medical malpractice claimant (Tracy Lynn Sherman v. Missouri Professionals Mutual-Physicians Professional Indemnity Association (MPM), No. WD82569, Mo. App., Western Dist., 2020 Mo. App. LEXIS 39).

  • January 15, 2020

    4th Circuit Set For Trust Fund Trading Insurance Coverage Case

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals will hear oral arguments Jan. 28 over whether a $1,382,653 judgment stemming from an attorney’s margin and day trading of trust funds falls within his policy insuring professional services (Alps Property & Casualty Insurance Co., et al v. Ivan L. Higgerson Sr., et al., No. 18-2245, 4th Cir.).

  • January 14, 2020

    Insurer Responds To Insured’s Appeal Of No Coverage Ruling Of Alleged Data Breach

    NEW ORLEANS — A commercial general liability insurer on Nov. 25 filed its response in the Fifth Circuit U.S. Court of Appeal to an insured’s appeal of a lower court’s finding that the insurer has no duty to defend against an underlying lawsuit seeking to recover damages purportedly caused by a data breach of the insured’s credit card processing system (Landry's Inc. v. The Insurance Company of the State of Pennsylvania, No. 19-20430, 5th Cir.).

  • January 13, 2020

    High Court Refuses To Disturb No Coverage Ruling Over Students’ Sexual Abuse Claims

    WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 13 refused to review the Third Circuit U.S. Court of Appeals’ ruling that a commercial general liability insurer has no duty to defend its board of education insured against an underlying lawsuit arising from sexual abusive acts alleged by students against a former teacher, denying the insured’s petition for writ of certiorari (Montville Township Board of Education v. Zurich American Insurance Company, No. 19-558, U.S. Sup.).

  • January 08, 2020

    Exclusion Bars Coverage For Construction Of Beetle-Infested Log Home, Panel Affirms

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on Dec. 27 affirmed a lower federal court’s ruling that a claim alleging that an insured constructed a beetle-infested log home is barred from coverage by a commercial general liability insurance policy’s exclusion for certain damages arising out of the insured's work (Northland Casualty Co. v. Joseph S. Mulroy, et al., No. 19-35085, 9th Cir., 2019 U.S. App. LEXIS 38702).

  • January 08, 2020

    Federal Judge Dismisses Mass Shooting Coverage Suit At Request Of Insurer, Insureds

    LAS VEGAS — A federal magistrate judge in Nevada on Dec. 20 dismissed a lawsuit alleging that a commercial general liability insurer wrongfully breached its duty to defend MGM Resorts International and others against more than 4,000 claims arising from the Oct. 1, 2017, mass shooting at the Route 91 Harvest Country Music Festival after the parties stipulated to dismissal of the entire lawsuit (MGM Resorts International, et al. v. Zurich American Insurance Company, No. 19-01051, D. Nev.).

  • January 08, 2020

    Federal Judge Affirms Order Transferring Venue Of Insurer’s Legal Malpractice Suit

    DENVER — A federal judge in Colorado in Dec. 23 affirmed a magistrate’s order that granted attorneys and their law firm’s motion to transfer the venue of an insurer’s legal malpractice lawsuit against them, finding that a federal district court in Georgia is the proper venue because the nature of the insurer’s claims arose from the attorneys’ provision of coverage advice, which occurred at their law office in Atlanta (Clarendon National Insurance Company, et al. v. Stephanie Glickauf, et al., No. 18-02549, D. Colo., 2019 U.S. Dist. LEXIS 221219).

  • January 07, 2020

    Judge:  Professional Services Exclusion Bars Coverage For Suit Over Fatal Accident

    INDIANAPOLIS — A federal judge in Indiana on Jan. 6 granted a commercial general liability insurer’s motion for summary judgment in its declaratory judgment lawsuit, finding that the policy’s professional services exclusion precludes coverage for an underlying negligence action arising from a fatal multivehicle accident on an interstate highway (Sentinel Insurance Company, LTD. v. Durham Engineering, Inc., et al., No. 18-00016, S.D. Ind., 2020 U.S. Dist. LEXIS 1278).

  • January 07, 2020

    Judge Awards Insured $96,566 For Breach Of Contract Claim In Employee Theft Dispute

    SEATTLE — A federal judge in Washington on Jan. 3 held that an insurance policy’s employee theft coverage insures bonuses that an insured paid to its employees but does not cover third-party purchases the insured made related to a companywide vacation in a coverage dispute arising from fraudulent representations allegedly made by the insured’s former employee (Whitney Equipment Company v. Travelers Casualty and Surety Company of America, No. 18-1634, W.D. Wash., 2020 U.S. Dist. LEXIS 930).

  • January 06, 2020

    8th Circuit Affirms No Coverage Ruling For Losses Related To Rock Falls

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Jan. 3 affirmed a lower federal court's ruling in favor of primary and excess insurers in the insurers' lawsuit disputing coverage for its losses related to four rock falls, rejecting the insured’s argument that the dome-outs were caused by “building decay” under the policy (Westchester Surplus Lines Insurance Company, et al. v. Interstate Underground Warehouse & Storage Inc., No. 18-3448, 8th Cir.).

  • January 06, 2020

    Judge: Media Exclusion Bars Coverage For Television Networks’ Suits Against DISH

    NEW YORK — A federal court in New York on Dec. 27 entered judgment in favor of an excess commercial general liability insurer three days after a judge found that the policy’s media exclusion bars coverage for underlying breach of contract and copyright infringement claims brought against DISH Network Corp. by four major television networks (DISH Network Corporation v. Ace American Insurance Co., No. 16-4011, S.D. N.Y., 2019 U.S. Dist. LEXIS 220512).

  • January 03, 2020

    Maryland Panel Affirms $3.6M Judgment In Favor Of Nonprofit Insured

    ANNAPOLIS, Md. — The Maryland Court of Special Appeals on Dec. 30 affirmed a lower court’s $3,586,997.32 judgment in favor of a nonprofit insured for indemnity coverage for costs incurred in defending and settling underlying claims that it committed criminal acts in prosecuting a lawsuit against the owner of Ringling Brothers and Barnum & Bailey Circus (National Union Fire Insurance Company of Pittsburgh, Pa. v. The Fund for Animals Inc., No. 99, September Term, 2018, Md. App., Md. App. LEXIS 1111).

  • January 03, 2020

    11th Circuit Affirms Dismissal Of Class Action RICO Lawsuit Against Insurers

    ATLANTA — The 11th Circuit U.S. Court of Appeals on Dec. 20 affirmed a lower federal court’s dismissal of a class action lawsuit brought under the Racketeer Influenced and Corrupt Organizations Act against insurers by two auto body collision shops, finding that the plaintiffs have failed to allege any fraudulent or wrongful conduct to demonstrate that there were predicate acts of fraud and extortion (Crawford's Auto Center, Inc., et al. v. State Farm Mutual Automobile Insurance Company, et al., No. 17-12583, 11th Cir., 2019 U.S. App. LEXIS 37964).

  • January 03, 2020

    Au Pair Sponsor’s Request To Apply Notice-Prejudice Rule To Coverage Suit Rejected

    PASADENA, Calif. — The Ninth Circuit U.S Court of Appeals on Dec. 13 rejected a federally authorized au pair program sponsor’s argument that California law requires a not-for-profit entity and directors and officers liability insurer to prove that it was prejudiced by the insured's alleged untimely reporting of an underlying lawsuit brought under the Sherman Act, finding that the notice-prejudice rule does not apply to the policy (EurAuPair International, Inc. v. Ironshore Specialty Insurance Company, No. 18-55933, 9th Cir., 2019 U.S. App. LEXIS 36898).

  • January 02, 2020

    Third Party Can Be Compelled To Arbitrate Coverage Suit, Panel Says In Reversal

    SACRAMENTO, Calif. — A California appeals panel on Dec. 31 held that an insurance policy’s binding arbitration clause applies to a third party, reversing and ordering a lower court to order arbitration of a coverage dispute arising from an underlying injury that occurred at a convention center parking lot (Philadelphia Indemnity Insurance Company v. SMG Holdings Inc., No. C082841, Calif., App., 3rd Dist., 2019 Cal. App. Unpub. LEXIS 8686).

  • December 19, 2019

    Professional Liability Insurer Did Not Act In Bad Faith, Massachusetts Court Says

    BOSTON — An insured’s refusal to settle cannot be imputed to a professional liability insurer when the policy at issue includes a consent-to-settle provision, the Massachusetts Supreme Judicial Court said Dec. 16 in affirming a trial court’s ruling that the insurer did not act in bad faith in failing to settle a lawsuit against its insured (Douglas M. Rawan, et al., v. Continental Casualty Co., No. SJC-12691, Mass. Sup., 2019 Mass. LEXIS 710).

  • December 16, 2019

    Juul Insurer Asks Utah Court To Void $5M Excess Policy Due To Misrepresentations

    SALT LAKE CITY — A excess insurer on Dec. 2 filed an amended complaint against e-cigarette maker Juul Labs Inc. (JLI) seeking a Utah federal court’s declaration that a $5 million liability policy is null and void because of alleged misrepresentations made about the discontinuance of candy-flavored vaping pods and about class actions by injured users (Prime Insurance Company v. Juul Labs, Inc., No. 19-925, D. Utah).

  • December 13, 2019

    Illinois Panel: No Coverage Owed For Trade Secret Suit Against Candy Manufacturer

    CHICAGO — An Illinois panel on Dec. 11 affirmed a lower court’s finding that insurers have no duty to defend or indemnify an underlying lawsuit alleging that a candy manufacturer violated a confidentiality agreement by using another company’s trade secrets to manufacture competing products, finding that the underlying action fails to allege violations or injuries that occured during the policy period (Liberty Mutual Fire Insurance Company, et al. v. Ferrara Candy Company, et al., No. 18-1385, Ill. App, 1st Dist., 3rd Div., 2019 Ill. App. Unpub. LEXIS 2244).

  • December 12, 2019

    Judge:  Claim Was Not First Alleged Before Professional Liability Policy’s Inception

    FORT WAYNE, Ind. — A federal judge in Indiana on Dec. 10 held that a claim alleging that a medical malpractice insurer failed to settle a malpractice claim against its doctor insured was not first made before the inception of its professional liability insurance policy and, therefore, the issue should not be submitted to a jury when the case goes to trial next month (The Medical Protective Company of Fort Wayne Indiana v. American International Specialty Lines Insurance Company, No. 13-357, N.D. Ind., 2019 U.S. Dist. LEXIS 213592).