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Mealey's Emerging Insurance Disputes

  • November 20, 2019

    No EPL, D&O Coverage Owed For Shareholder Dispute, Federal Judge Rules

    BALTIMORE — A federal judge in Maryland on Nov. 14 held that plaintiffs cannot recover under an insurance policy’s employment practices liability or directors and officers liability coverage for the underlying $725,000 settlement of a shareholder lawsuit (Madison Mechanical, Inc, et al. v. Twin City Fire Insurance Company, et al., No. 17-01357, D. Md., 2019 U.S. Dist. LEXIS 198092).

  • November 20, 2019

    Target Sues Insurer For Coverage Of Banks’ Settlement In Data Breach Litigation

    MINNEAPOLIS — Citing a multimillion dollar coverage dispute of more than five years with its primary insurer over its settlement with a group of financial institutions (FIs) over a 2013 data breach, Target Corp. filed breach of contract claims against the insurer in Minnesota federal court on Nov. 15, seeking coverage declarations and damages (Target Corp. v. ACE American Insurance Co., et al., No. 0:19-cv-02916, D. Minn.).

  • November 20, 2019

    Professional Liability Insurer, Insured Dismiss Dispute Over Architectural Defects

    CHICAGO — An architectural firm insured and its professional liability insurer on Nov. 12 filed a voluntary stipulation of dismissal of the insurer’s declaratory judgment lawsuit disputing coverage for an underlying lawsuit alleging damages in a house that was designed by the insured one week after a federal judge in Illinois held that the insurer has no duty to defend the insured  (Wesco Insurance Company v. Elements Architectural Group, Inc., No. 18-2743, N.D. Ill., 2019 U.S. Dist. LEXIS 192346).

  • November 20, 2019

    Insureds File Notice Of Appeal Of No Coverage Ruling Of Investors’ Suit

    ST. LOUIS — Insureds notified a federal court in Missouri on Nov. 15 that they will ask the Eighth Circuit U.S. Court of Appeals to review a magistrate judge’s dismissal of their claims for breach of contract and vexatious refusal to pay brought against a directors and officers liability insurer (Verto Medical Solutions, LLC, et al. v. Allied World Specialty Insurance Company, No. 19-01532, E.D. Mo., 2019 U.S. Dist. LEXIS 190779).

  • November 19, 2019

    Appellant Challenges Stay Of Suit Seeking Validity Of Insurer’s Subrogation Claim

    SAN FRANCISCO — An appellant recently asked a California appeals court to reverse a lower court’s ruling that stayed his declaratory judgment lawsuit disputing the validity of a professional liability insurer’s subrogation claim against his family trust, arguing that the stay “has no legal basis” (John Berman v. Minnesota Lawyers Mutual Insurance Company, No. A155394, Calif. App., 1st Dist., Div. 3).

  • November 15, 2019

    Federal Judge:  Suits Alleging Concert Injuries Trigger Coverage Under CGL Policy

    LOUISVILLE, Ky. — A federal judge in Kentucky on Nov. 12 held that all underlying personal injury claims against a concert operator “arise from” a security company’s “acts or omissions” in the performance of security services and, as a result, fall under the scope of a vendor services agreement’s indemnification clause and trigger coverage under a commercial general liability insurance policy (Live Nation Worldwide, Inc. v. Secura Insurance, et al., No. 17-216, W.D. Ky., 2019 U.S. Dist. LEXIS 195830).

  • November 14, 2019

    New York Panel Reverses Ruling, Awards Summary Judgment In Insurers’ Favor

    ALBANY, N.Y. — After reversing a lower court’s order that granted a plaintiff’s motion for summary judgment and dismissed defendant insurers’ two affirmative defenses, a New York appeals panel on Nov. 13 awarded summary judgment in favor of the insurers and dismissed the lawsuit seeking recovery of an underlying $3.25 million judgment against the insured (Chaya Plotkin v. Republic-Franklin Insurance Company, et al., No. 2016-04231, N.Y. Sup., App. Div., 2nd Dept., 2019 N.Y. App. Div. LEXIS 8234).

  • November 12, 2019

    5th Circuit Affirms Ruling In Coverage Dispute Arising From Electrocution Death

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Nov. 11 affirmed a lower federal court’s summary judgment rulings in a coverage dispute arising from an electrocution death caused by a generator that was designed, sold and monitored by the insured (Aggreko, L.L.C. v. Chartis Specialty Insurance Company, et al., No. 18-40325, 5th Cir., 2019 U.S. App. LEXIS 33637).

  • November 12, 2019

    Magistrate Refuses To Stay Coverage Suit Over Olympic Athletes’ Sexual Abuse Claims

    DENVER — A federal magistrate judge in Colorado on Oct. 25 denied the United States Olympic Committee’s (USOC) motion to stay its insurer’s rescission lawsuit pending resolution of underlying lawsuits alleging that it knew or should have known about sexual abuse committed against Olympic athletes and should have done more to stop the abuse (Philadelphia Indemnity Insurance Company v. United States Olympic Committee, No. 19-01231, D. Colo., 2019 U.S. Dist. LEXIS 193192).

  • November 11, 2019

    Outside Business Exclusion Bars Coverage For Claims Against Law Firm, Panel Affirms

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Nov. 8 affirmed a lower federal court's ruling that a professional liability insurance policy's outside business exclusion precludes coverage for underlying claims against a law firm insured and one of its attorneys (Westport Insurance Corporation v. Hippo Fleming & Pertile Law Offices, et al., No. 18-3551, 3rd Cir., 2019 U.S. App. LEXIS 33480).

  • November 11, 2019

    Iowa Panel:  No CGL Coverage Owed For Federal Litigation Arising From Levee Reshaping

    DES MOINES, Iowa — An Iowa panel on Nov. 6 affirmed a lower court’s ruling in favor of a commercial general liability insurer in its lawsuit disputing coverage for underlying federal litigation brought against its insured, concluding that the insured’s intentional act of removing dirt from unauthorized borrow sites to reshape a levee fails to qualify as an occurrence under the policy (Addison Insurance Company v. MEP Co., No. 17-2091, Iowa App., 2019 Iowa App. LEXIS 1006).

  • November 06, 2019

    West Virginia High Court Affirms Dismissal Of Insured’s Negligent Procurement Claim

    CHARLESTON, W.Va. — The West Virginia Supreme Court of Appeals on Nov. 4 held that a lower court did not err in finding that the state does not recognize an insurance agent’s duty to advise an insured of its coverage needs and the special relationship exception that would trigger that duty, affirming the lower court’s grant of the agent’s motion for summary judgment on the insured’s negligent procurement claims (Mine Temp, LLC v. Wells Fargo Insurance Services of West Virginia, Inc., No. 18-0755, W.Va. App., 2019 W. Va. LEXIS 511).

  • November 06, 2019

    11th Circuit Vacates, Remands Insurer’s Suit Brought Under Carmack Amendment

    ATLANTA — The 11th Circuit U.S. Court of Appeals on Nov. 5 vacated and remanded a lower federal court’s summary judgment ruling in favor of an insurer in its subrogation lawsuit seeking recovery of its losses involving a combine harvester that was damaged during transportation from Kentucky to Florida (Atlantic Specialty Insurance Company v. Digit Dirt Worx, Inc., et al., No. 19-11887, 11th Cir., 2019 U.S. App. LEXIS 33013).

  • November 06, 2019

    Insurer Owes Defense, But Its Refusal To Defend Was Not In Bad Faith, Panel Affirms

    CHICAGO — An Illinois appeals panel on Nov. 4 affirmed a lower court’s ruling that an insurer has a duty to defend its insured against an underlying class action alleging violations of the Chicago Residential Landlord Tenant Ordinance but that its refusal to provide a defense did not constitute bad faith (Evergreen Real Estate Services LLC v. Hanover Insurance Company, et al., No. 1-18-1867, Ill. App., 1st Dist., Div. 1, 2019 Ill. App. LEXIS 868).

  • October 21, 2019

    COMMENTARY: Does A Contractual Liability Exclusion In Professional Liability Policies Render Coverage Illusory?

    By Robert M. Hall

  • November 05, 2019

    Policy’s Subrogation Waiver Is Ambiguous, 6th Circuit Majority Says In Reversal

    CINCINNATI — A majority of the Sixth Circuit U.S. Court of Appeals on Oct. 30 reversed a lower federal court’s summary judgment ruling in favor of an insurer, concluding that the policy’s subrogation waiver is ambiguous as to whether the insurer can sue an additional insured for damage caused by negligence (Certain Underwriters at Lloyd's, London v. Sunbelt Rentals, Inc., No. 18-5617, 6th Cir., 2019 U.S. App. LEXIS 32461).

  • November 04, 2019

    Justice: No Defense Owed For Consolidated Class Action Over Parmesan Cheese Labels

    NEW YORK — A New York justice on Oct. 28 granted commercial general liability insurers’ motion for summary judgment in a coverage dispute arising from underlying claims that consumers were misled by grated parmesan cheese product labels, finding that none of the underlying allegations alleges personal injury, property damage or any other occurrence to trigger coverage under the policies (Travelers Property Casualty Company of America, et al. v. ICCO Cheese Co. Inc., No. 652787/2016, N.Y, Sup., New York Co., 2019 N.Y. Misc. LEXIS 5842).

  • November 04, 2019

    Certified Question In Insurance Dispute Is Too Broad, Florida High Court Told

    TALLAHASSEE, Fla. — A question certified to the Florida Supreme Court by a Florida state appellate panel in a malpractice insurance dispute is too broad and failed to properly recognize that, under state law, two “distinct types of tripartite relationship may be created,” a law firm argues in an Oct. 2 respondent’s brief filed in the state Supreme Court (Arch Insurance Company v. Kubicki Draper LLP, No. 19-673, Fla. Sup.).

  • November 01, 2019

    No Coverage Owed Under Pollution Condition Provision, New York Federal Judge Says

    NEW YORK — An insurer owes no coverage under a policy’s pollution loss coverage provision for underlying lawsuits arising out of a fire at a Texas oil refinery because the policy’s pollution loss provision does not apply to the underlying suits; however, the insurer may owe coverage under the policy’s professional services coverage provision as a question of fact exists on the type of services the insured provided prior to the refinery fire, a New York federal judge said Oct. 31 (James River Insurance Co. et al., v. Indian Harbor Insurance Co., No.18-767, S.D. N.Y., 2019 U.S. Dist. LEXIS 189286).

  • November 01, 2019

    Judge:  Insurer’s Duty To Defend School Against Misconduct Suits Remains Active

    PORTLAND, Ore. — A federal judge in Oregon on Oct. 31 denied a commercial general liability insurer’s motion for summary judgment in its interpleader and declaratory judgment lawsuit arising from underlying sexual and nonsexual misconduct claims against its preshool and elementary school insured, rejecting the insurer’s argument that it extinguished its duties to defend and indemnify by placing a $100,000 interpleader deposit into the court’s registry (United States Fire Insurance Company v. Mother Earth School, et al., No. 18-01762, D. Ore., 2019 U.S. Dist. LEXIS 188826).