Mealey's Emerging Insurance Disputes

  • September 20, 2017

    Judge: Bank Has Right To Reimbursement From Insurer For Post-Merger Defense Costs

    NEWARK, N.J. — A New Jersey federal judge on Sept. 18 found that a bank involved in a corporate merger has a right to reimbursement under a directors and officers liability insurance policy for its post-merger defense costs vis-à-vis the independent directors involved in a shareholder class action (BCB Bancorp, Inc., et al. v. Progressive Casualty Insurance Co., et al., No. 13-1261, D. N.J., 2017 U.S. Dist. LEXIS 151415).

  • September 19, 2017

    Judge Tosses Breach of Contract Suit Against Insurer Over $38.3M Defamation Verdict

    LAS VEGAS — Finding that coverage for an underlying defamation lawsuit is barred by a policy exclusion, a Nevada federal judge on Sept. 6 granted with prejudice the insurer’s motion to dismiss a breach of contract action arising from the underlying $38.3 million jury verdict (Bradley Stephen Cohen, et al. v. Berkley National Insurance Co., No. 17-00057, D. Nev., 2017 U.S. Dist. LEXIS 144633).

  • September 19, 2017

    Judge: No Directors, Officers Liability Coverage Owed For Overtime Pay Dispute

    SHERMAN, Texas — A Texas federal judge on Sept. 18 adopted a magistrate’s report that recommended granting an insurer’s motion for summary judgment in a dispute over directors and officers liability coverage for underlying claims that the insured failed to pay overtime and improperly categorized employees as “exempt” under the Fair Labor Standards Act (ADI WorldLink, LLC v. RSUI Indemnity Co., No. 16-665, E.D. Texas, 2017 U.S. Dist. LEXIS 150505).

  • September 18, 2017

    Majority Reverses Dismissal Of Body Shops’ Antitrust Suit Over Insurance Practices

    ATLANTA — A majority of the 11th Circuit U.S. Court of Appeals on Sept. 7 reversed and remanded a lower federal court’s ruling that dismissed federal antitrust claims and state tort claims against insurers in a lawsuit alleging that the insurers engaged in conduct to depress the body shops' rates for automobile repair (Quality Auto Painting Center of Roselle, Inc. v. State Farm Indemnity Company, et al., Nos. 15-14160, 15-14162, 15-14178, 15-14179 and 15-14180, 11th Cir., 2017 U.S. App. LEXIS 17318).

  • September 15, 2017

    No Professional Liability Coverage Owed For Harassment, Discrimination Claims

    NEWARK, N.J. —A New Jersey federal magistrate on Sept. 14 found that professional liability insurance coverage was not triggered because underlying sexual harassment and discrimination claims do not arise out of the insured’s performance of ambulance services, granting the insurer’s motion for judgment on the pleadings in the insured’s declaratory judgment lawsuit (Aaron Ambulance Medical Transportation Inc., et al. v. Certain Underwriters at Lloyd's, London, No. 16-04564, D. N.J., 2017 U.S. Dist. LEXIS 149409).

  • September 15, 2017

    Suit Involving Tenant Rights Triggered Insurer’s Duty To Defend, Judge Rules

    HOUSTON — A Texas federal judge on Sept. 13 found that an underlying lawsuit alleging that an insured failed to timely negotiate a commercial lease agreement triggered an insurer’s duty to defend, granting the insured’s motion for summary judgment in a coverage dispute (2200 West Alabama, Inc v. Western World Insurance Co., No. 16-2244, S.D. Texas, 2017 U.S. Dist. LEXIS 148492).

  • September 15, 2017

    Products-Completed Operation Hazard Exclusion Bars Coverage, Federal Judge Rules

    SPOKANE, Wash. — A Washington federal judge on Sept. 8 granted an insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an underlying products liability lawsuit (Atlantic Casualty Insurance Co. v. Brad Bellinger, et al., No. 16-00422, E.D. Wash., 2017 U.S. Dist. LEXIS 146716).

  • September 14, 2017

    Judge: Insured Vs. Insured Exclusion Bars Directors, Officers Liability Coverage

    LOS ANGELES — A California federal judge on Sept. 11 found that an insured vs. insured policy exclusion bars directors and officers liability insurance coverage for an underlying cross-complaint, rejecting the plaintiffs’ argument that the indemnity exception to the exclusion applies to the underlying contractual indemnity claim brought against them (David Czerwinski, et al. v. Scottsdale Insurance Co., et al., No. 17-4408, C.D. Calif., 2017 U.S. Dist. LEXIS 147727).

  • September 13, 2017

    Underlying Suit Fails To Trigger Professional Liability Coverage, Federal Judge Says

    PHILADELPHIA — A senior federal judge in Pennsylvania on Sept. 12 granted two professional liability insurers’ motions for judgment on the pleadings and/or summary judgment in a coverage dispute over an underlying negligence lawsuit brought against the insureds by a national title insurance underwriting company (Fidelity National Title Insurance Co. v. Maxum Indemnity Co., et al., No. 16-1360, E.D. Pa., 2017 U.S. Dist. LEXIS 147134).

  • September 12, 2017

    Personal Profit Or Advantage Exclusion Bars Coverage, Panel Says On Remand

    LANSING, Mich. — A Michigan appeals panel on Sept. 7 held that an insurance policy’s personal profit or advantage exclusion applies to bar coverage for an underlying consent judgment arising from an alleged “conduit financing scheme” between charter schools (Employers Mutual Casualty Co. v. Helicon Associates, Inc., et al., No. 322215, Mich. App., 2017 Mich. App. LEXIS 1405).

  • September 12, 2017

    Insured, Insurer File Appeals In Coverage Dispute Arising From Ponzi Scheme

    NEW ORLEANS — An insured has asked the Fifth Circuit U.S. Court of Appeals to reverse a lower court’s ruling that it did not "own" its lost earnings stemming from a Ponzi scheme within the meaning of a commercial crime insurance policy while the insurer has asked the court to find that the policy’s indirect loss provision and trading loss exclusion bar coverage (Cooper Industries Ltd., et al. v. National Union Fire Insurance Co. of Pittsburgh, Pa., No. 16-20539, 5th Cir.).

  • September 11, 2017

    Insurer, Swimwear Firm Argue Jurisdiction Of Coverage Suit To D.C. Circuit

    WASHINGTON, D.C. — In briefs filed in the District of Columbia Circuit U.S. Court of Appeals, a professional liability insurer and the assignee of a deceased attorney’s claims debate whether jurisdiction in a coverage declaratory judgment suit is determined by where the insurance contract was drafted or by the location of the assignee (Brit UW, Limited v. Manhattan Beachwear LLC, No. 17-7031, D.C. Cir.).

  • September 11, 2017

    Bankruptcy Judge Declines To Change Arbitration Order In $15M Insurance Dispute

    NEW YORK — A New York bankruptcy judge on Sept. 6 refused to dismiss an order requiring a defunct brokerage company to arbitrate in Bermuda its dispute with a foreign specialty reinsurer over a $15 million policy, despite the brokerage company’s argument that its liquidation plan supersedes an arbitration provision (In re:  MF Global Holdings Ltd., et al., MF Global Holdings Ltd., et al. v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy., 2017 Bankr. LEXIS 2379).

  • September 11, 2017

    Panel Affirms Dismissal Of Law Firm’s Suit Seeking Legal Fees From Clients’ Insurer

    CHICAGO — An Illinois appeals panel on Sept. 7 affirmed a lower court’s ruling that a law firm’s amended complaint against its clients’ professional liability insurer fails to adequately plead claims for account stated and fraudulent misrepresentation (Law Offices of Arnold Landis, P.C., v. OneBeacon Midwest Insurance Company, No. 1-16-0079, Ill. App., 1st Dist., 4th Div., 2017 Ill. App. Unpub. LEXIS 1834).

  • September 8, 2017

    Claims Constitute ‘Property Damage’ Under CGL Policy, Insured Argues To 8th Circuit

    ST. LOUIS — For the second time, an insured has asked the Eighth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling in favor of a commercial general liability insurer in a coverage dispute arising from the contamination of landscaping materials with plastic from defective storage bags that were manufactured by the insured (Decker Plastics v. West Bend Mutual Insurance Co., No.17-1319, 8th Cir.).

  • September 8, 2017

    Panel: Health Plan Provider Was Required To Allocate $350M Global Settlement

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Sept. 7 found that a health plan provider bears the burden to allocate a $350 million settlement between a potentially covered lawsuit and a noncovered lawsuit, affirming a lower court’s ruling in favor of four excess insurers in a coverage dispute over the underlying indemnity and defense costs (United Health Group Inc. v. Executive Risk Specialty Insurance Co., et al., No. 15-1076, 8th Cir., 2017 U.S. App. LEXIS 17324).

  • September 6, 2017

    Federal Magistrate: Claims That Insured Failed To Pay Wages Do Not Trigger Coverage

    SAN JOSE, Calif. — A California federal magistrate judge on Aug. 31 held that a professional liability insurer owes no coverage for underlying class action claims alleging that its staffing services company insured failed to pay wages (W.G. Hall, LLC v. Zurich American Insurance Co., No. 17-00646, N.D. Calif., 2017 U.S. Dist. LEXIS 141389).

  • September 6, 2017

    Cosby’s Insurer Moves To File A Bond Or Stay Execution Of Judgment Pending Appeal

    SPRINGFIELD, Mass. — William H. Cosby Jr.'s homeowners and excess insurer on Aug 10 moved in federal district court to file a supersedeas bond or, in the alternative, to stay execution of a judgment against it pending resolution of its appeal in the First Circuit U.S. Court of Appeals challenging a ruling that it has a duty to defend Cosby against underlying defamation lawsuits arising from sexual assault claims (AIG Property Casualty Co. v. Tamara Green, et al., No. 15-30111, D. Mass.).

  • September 6, 2017

    Care, Custody Or Control Exclusion Bars Coverage, Federal Judge Rules

    CHICAGO — An Illinois federal judge on Aug. 24 found that an insurer has no duty to defend or indemnify its insured against an underlying lawsuit seeking $250,000 for missing equipment because coverage is barred by the policy’s care, custody or control exclusion (The Cincinnati Insurance Company v. Berkshire Refrigerated Warehousing, LLC, et al., No. 15-686, N.D. Ill., 2017 U.S. Dist. LEXIS 136515).

  • September 5, 2017

    Insurer Has No Duty To Indemnify Under ‘Accidental Event’ Coverage, Panel Affirms

    NASHVILLE, Tenn. — A Tennessee appeals panel on Aug. 31 affirmed a lower court’s ruling that an insurer has no duty to indemnify its insured under a business insurance policy’s "accidental event" coverage for claims that the insured violated the Telephone Consumer Protection Act (TCPA) by sending unsolicited faxes (Allstate Insurance Company v. Kaigler & Associates, Inc., No. M2016-01003-COA-R3-CV, Tenn. App., 2017 Tenn. App. LEXIS 595).