Mealey's Emerging Insurance Disputes

  • May 23, 2018

    Billing Practices Are Not Professional Services Under Policy, 10th Circuit Affirms

    DENVER — The 10th Circuit U.S. Court of Appeals on May 22 affirmed a lower federal court’s finding that an insurer had no duty to defend against an underlying class action or the Colorado attorney general’s investigation of a law firm insured because the underlying claims arose from billing practices, which are not professional services under the insurance policy (Evanston Insurance Company v. Law Office of Michael P. Medved, et al., No. 16-1464, 10th Cir., 2018 U.S. App. LEXIS 13270).

  • May 23, 2018

    Coverage Claims Arising From Alleged Theft Are Time-Barred, 9th Circuit Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 21 affirmed a lower federal court’s finding that insureds’ bad faith, breach of contract and negligence claims arising from an alleged theft loss are time-barred (Dean Seymour, et al. v. State Farm General Insurance Company, No. 17-5529, 9th Cir., 2018 U.S. App. LEXIS 13166).

  • May 23, 2018

    Panel Reverses No Coverage Ruling For False Claims Act Suit Against Office Depot

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 21 found 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, reversing and remanding (Office Depot Inc. v. AIG Specialty Insurance Company, No. 17-55125, 9th Cir., 2018 U.S. App. LEXIS 13136).

  • May 22, 2018

    Class Suit Fails To Allege Covered Disparagement Claim, California Panel Affirms

    SAN FRANCISCO — A California appeals court on May 21 affirmed a lower court’s ruling that an underlying consumer class action alleging that a shampoo manufacturer insured falsely advertised its hair products as "organic" does not trigger a covered disparagement claim under its insurance policy (Hartford Casualty Insurance Co. v. Vogue International, LLC, et al., No. A150921, Calif. App., 1st Dist., Div. 5, 2018 Cal. App. Unpub. LEXIS 3467).

  • May 21, 2018

    Racing Exclusion Bars Coverage For Collision, Florida Panel Affirms

    LAKELAND, Fla.— A Florida appeals panel on May 18 affirmed a lower court’s finding that a man's use of his personal automobile on a private race track falls under an insurance policy exclusion for race-related conduct (Robert Wegmann v. Allstate Property & Casualty Insurance Co., No. 2D17-2030, Fla. App., 2nd Dist., 2018 Fla. App. LEXIS 6965).

  • May 21, 2018

    Pennsylvania Act Violates Takings Clause, Federal Judge Says In Insurance Dispute

    HARRISBURG, Pa. — A federal judge on May 17 found that Pennsylvania’s Act 44, which mandates that the Pennsylvania Professional Liability Joint Underwriting Association transfer $200 million of its "surplus" funds for deposit into the Commonwealth's General Fund, is unconstitutional, granting summary and declaratory judgment and permanent injunctive relief in favor of the association (Pennsylvania Professional Liability Joint Underwriting Association v. Tom Wolf, No. 17-2041, M.D. Pa., 2018 U.S. Dist. LEXIS 83137).

  • May 18, 2018

    Coverage For Dog Attack Barred By Policy Exclusion, Wisconsin Panel Affirms

    WAUKESHA, Wis. —A Wisconsin appeals panel on May 16 affirmed a lower court’s finding that a homeowners insurance policy unambiguously excludes coverage for injuries that were caused by a dog with a prior history of causing injury, rejecting the appellants’ argument that the policy is contrary to public policy (Kathryn Baumann-Mader, et al. v. Integrity Mutual Insurance Company, et al., No. 2017AP1369, Wis. App., Dist. 2, 2018 Wisc. App. LEXIS 496).

  • May 18, 2018

    Homeowners Policy Is ‘About As Clear As Mud,’ Insured Tells 3rd Circuit

    PHILADELPHIA — In response to a homeowners insurer’s appeal, an insured has asked the Third Circuit U.S. Court of Appeals to affirm a lower federal court’s denial of the insurer’s motion for judgment on the pleadings in a coverage dispute arising from underlying assault and battery and negligence claims (Unitrin Direct Insurance Company v. Michael Esposito, No. 16-5239, E.D. Pa., 2017 U.S. Dist. LEXIS 195739).

  • May 17, 2018

    Judge Refuses To Reconsider Ruling In Coverage Dispute Over Sexual Assault Claim

    NEW YORK — A New York federal judge on May 15 denied a commercial general liability insurer's motion to reconsider his finding that an unexplained delay of at least 15 months between the date the insurer learned of the grounds to deny coverage of an underlying sexual assault suit and the date it actually denied coverage is unreasonable under New York Insurance Law Section 3420(d)(2) (Philadelphia Indemnity Insurance Co. v. Intrepid Group, LLC, et al., No. 16-7928, S.D. N.Y., 2018 U.S. Dist. LEXIS 82607).

  • May 16, 2018

    Criminal Acts Exclusion Bars Coverage For College Student’s Death, Panel Affirms

    RICHMOND, Va. — The Fourth Circuit U.S Court of Appeals on May 15 affirmed a lower federal court’s finding that the insurer of homeowners and excess coverage policies issued to the parents of a college student convicted of killing another student has no duty to defend or indemnify against a wrongful death suit, finding that the exclusion for “any criminal act” bars coverage (Sharon D. Love v. Chartis Property Casualty Company, No. 17-1467, 4th Cir., 2018 U.S. App. LEXIS 12572).

  • May 16, 2018

    NRA Sues Broker To Expose ‘Ongoing, Unconstitutional Blacklisting Campaign’

    ALEXANDRIA, Va. — The National Rifle Association of America (NRA) sued an insurance broker in a Virginia federal court on May 4, alleging that it committed numerous contractual breaches that reflect both a self-interested response to the New York Department of Financial Services’ coercion and a complete failure to honor its duties of loyalty, full disclosure and honesty (National Rifle Association of America v. Lockton Affinity Series of Lockton, et al., No. 18-542, E.D. Va.).

  • May 15, 2018

    Magistrate: Insureds’ Proposed Amendment In $1.8M Fine Wine Coverage Suit Is Futile

    DENVER — A Colorado federal magistrate on May 8 recommended denying insureds’ motion for leave to amend their complaint in a dispute over coverage for more than $1.8 million in undelivered fine wine, finding that their proposed amendment is futile because as the new claim, as pleaded, fails to allege facts to make it plausible (Malik M. Hasan, M.D., et al. v. AIG Property Casualty Co., No. 16-02963, D. Colo., 2018 U.S. Dist. LEXIS 77435).

  • May 15, 2018

    Coverage Suit Over Failed Business Relationship Dismissed After Settlement Reached

    MOBILE, Ala. — An Alabama federal judge on May 14 dismissed without prejudice a commercial general liability insurer's declaratory judgment lawsuit after the parties announced that they reached an amicable settlement (Acadia Insurance Co. v. SouthernPointe Group, Inc., et al., No. 17-01368, N.D. Ala.).

  • May 15, 2018

    Judge Orders Parties To Show Cause Why Entire Coverage Suit Should Not Be Stayed

    SANTA ANA, Calif. — A California federal judge on May 11 ordered the city of Laguna Beach and its insurer to show cause why a coverage dispute over a sewer backup should not be stayed in its entirety pending resolution of the underlying lawsuit (Tokio Marine Specialty Insurance Company v. Laguna Beach, No. 17-00277, C.D. Calif., 2018 U.S. Dist. LEXIS 80214).

  • May 14, 2018

    Panel: Ambiguous Policy Language Requires Reversal Of Professional Liability Suit

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 10 reversed a lower federal court’s ruling that coverage for an underlying qui tam action is limited to a professional liability insurance policy's $25,000 billing errors endorsement sublimit, finding that the ambiguous policy language should have been resolved in the insureds’ favor (My Left Foot Children's Therapy, et al. v. Certain Underwriters at Lloyd's London subscribing to policy No. HAH15-0632, No. 17-15748, 9th Cir., 2018 U.S. App. LEXIS 12269).

  • May 14, 2018

    Judge: Insurer Has No Duty To Defend Corporate Entity Carrying Out Pizza Franchise

    PEORIA, Ill.— An Illinois federal judge found on May 10 that an insurance policy cannot be construed to make an insurer liable to defend or indemnify a corporate entity doing business as a pizza franchise and its employee against an underlying wrongful death lawsuit arising out of an automobile accident involving a pizza delivery (Mid-Century Insurance Company v. Pizza By Marchelloni, et al., No. 17-1214, C.D. Ill., 2018 U.S. Dist. LEXIS 78859).

  • May 11, 2018

    No Coverage For Minor’s Injuries Incurred From ‘Psycho Swing,’ 11th Circuit Affirms

    ATLANTA — The 11th Circuit U.S. Court of Appeals on May 7 affirmed a lower federal court’s ruling that no commercial general liability coverage existed for bodily injuries arising out of an event-planning company insured’s ownership, maintenance or use of recreational equipment (Steadfast Insurance Co. v. The Celebration Source, Inc., et al., No. 17-11115, 11th Cir., 2018 U.S. App. LEXIS 12142).

  • May 11, 2018

    California Panel Affirms No Coverage For Suit Over Alleged Tax Avoidance Scheme

    RIVERSIDE, Calif. — A California appeals panel on May 8 found that an underlying complaint failed to allege a claim against an insured arising from a wrongful act in its rendering of professional services that are "solely related" to a covered product, affirming a lower court’s ruling that an errors and omissions insurer has no duty to defend or indemnify against the underlying suit (Lindsey Financial, Inc. et al. v. American Automobile Insurance Company, No. E067037, Calif., App., 4th Dist., Div. 2, 2018 Cal. App. Unpub. LEXIS 3164).

  • May 11, 2018

    11th Circuit: No Coverage For Debit Card Scam Under Computer Fraud Policy

    ATLANTA — Concluding that a debit card firm’s loss due to fraud did not result directly from computer fraud, even though computers were used by the fraudsters, an 11th Circuit U.S. Court of Appeals panel on May 10 ruled that there was no coverage for the firm’s resulting loss under its computer fraud insurance policy (HI Technology Corp., et al. v. Great American Insurance Co., No. 17-11712, 11th Cir.).

  • May 11, 2018

    No Coverage Owed Under Collapse Provisions, 9th Circuit Panel Affirms

    SEATTLE — A district court did not err in finding that an insurer owes no coverage for damage to apartments from hidden decay under its policies’ “collapse” provisions because the damage has not rendered the apartment building unfit or unsafe for occupancy, the Ninth Circuit U.S. Court of Appeals said May 9 (American Economy Insurance Co. v. CHL LLC, No. 16-35606, 9th Cir., 2018 U.S. App. LEXIS 12159).