Mealey's Emerging Insurance Disputes

  • September 18, 2020

    Panel: Underlying Suit Fails To Allege Negligence As To Professional Services

    SPRINGFIELD, Ill. — An Illinois appeals panel on Sept. 16 held that the alleged conduct that forms the basis for an underlying claim does not qualify as adjuster services pursuant to a professional liability insurance policy, affirming a lower court's summary judgment ruling in favor of the insurer in its declaratory judgment lawsuit disputing coverage for a negligence lawsuit brought against its insured (RLI Insurance Company v. Acclaim Resource Partners LLC, No. 4-19-0757 and 4-19-0785, 4th Dist., Ill. App., 2020 Ill. App. Unpub. LEXIS 1554).

  • September 18, 2020

    Pollution Exclusion Does Not Bar Coverage For 'Degraded Indoor Air Quality'

    SALEM, Ore. — A pollution exclusion included in a landlord protection policy does not bar coverage for an underlying suit arising from carbon monoxide poisoning because it is not clear if the pollution exclusion bars coverage for "degraded indoor air quality" as alleged in the underlying complaint, the Oregon Court of Appeals said Sept. 16 in affirming a trial court's ruling for the insured (Gary Rogowski v. Safeco Insurance Company of Oregon, No. A169063, Ore. App., 2020 Ore. App. LEXIS 1105).

  • September 17, 2020

    Federal Judge: Kentucky Governor Is 'Nominal' Party In COVID-19 Coverage Suit

    LEXINGTON, Ky. — A chief federal judge in Kentucky on Sept. 16 dismissed Gov. Andy Beshear from an insured's lawsuit seeking a declaration that the insured's temporary closure pursuant to the governor's executive order prompted by the novel coronavirus triggered coverage, finding that the result of this coverage dispute "will have no effect on Governor Beshear's legal rights" (J&H Lanmark, Inc. v. Twin City Fire Insurance Company, et al., No. 20-333, E.D. Ky.).

  • September 16, 2020

    Insurer Asked To Respond To Discovery In Coverage Suit Over $73.21M Verdict

    WILMINGTON, Del. — The operator of general acute care hospitals and its related entities on Sept. 15 ask the Delaware Superior Court to order a health care umbrella insurer to respond to discovery requests over its reinsurance segment in a coverage dispute regarding a $73.21 million verdict against one of the operator's entities in an underlying medical malpractice suit (Steadfast Insurance Company v. Community Health Systems, Inc., et al., No. N18C-11-127, Del. Super.).

  • September 16, 2020

    Insured Awarded $2.5M In Prefiling Prejudgment Interest In Knee Implant Dispute

    KALAMAZOO, Mich. — A Michigan federal judge on Sept. 15 awarded an insured almost $2.5 million in prefiling prejudgment interest because the insured's bad faith claim arising out of the settlement of underlying claims based on the insured's sale of defective artificial knee joints was founded in contract and, therefore, permitted under Michigan law (Stryker Corp., et. al. v. XL Insurance America Inc., No. 17-66, W.D. Mich.).

  • September 16, 2020

    Judge Dismisses All Claims In Retailer's Suit Seeking Coverage For COVID-19 Losses

    SAN FRANCISCO — A federal judge in California on Sept. 14 dismissed without prejudice all claims in a retailer insured's class complaint against its insurer, finding that the insured is not entitled to business income, extra expense or civil authority coverage as a matter of law for its claimed losses following the state's "Stay at Home" order in response to the novel coronavirus pandemic, granting the insured leave to amend because the law regarding "business interruption coverage linked to the COVID-19 pandemic is very much in development" (Mudpie, Inc. v. Travelers Casualty Insurance Company of America, No. 20-03213, N.D. Calif.).

  • September 15, 2020

    Roundup Of Briefs Over Coronavirus Coverage

    From insurers’ motions to dismiss to insureds’ notices of voluntary dismissals, Mealey Publications takes a look at the latest pleadings relating to insurance coverage for COVID-19.

  • September 15, 2020

    'Related Claim' Exclusion Bars Coverage For Breach Of Fiduciary Suit, Judge Rules

    BRIDGEPORT, Conn. — Judgment was entered in favor of an insurer on Sept. 14, three days after a federal judge in Connecticut granted its motion for summary judgment in finding that a "Directors & Officer and Entity Liability, Employment Liability and Fiduciary Liability" insurance policy's "related claim" exclusion relieves the insurer of its duty to defend against an underlying breach of fiduciary lawsuit brought against its insured (Alexbay LLC v. QBE Insurance Corporation, No. 18-00423, D. Conn., 2020 U.S. Dist. LEXIS 166856).

  • September 15, 2020

    Panel:  Triable Issues Of Fact Exist As To Whether Broker Undertook Special Duty

    SANTA ANA, Calif. — A California appeals panel on Sept. 11 held that an insured raised triable issues of fact regarding whether an insurance broker "undertook a special duty by holding itself out as having expertise in inland marine insurance" and that the insured reasonably relied on the broker's expertise, reversing and remanding a lower court's ruling in favor of the broker in a breach of contract and negligence lawsuit (David Murray v. UPS Capital Insurance Agency, Inc., No. G058353, Calif. App., 4th Dist., Div. 3, 2020 Cal. App. LEXIS 866).

  • September 15, 2020

    9th Circuit Says No Authority Supports Excess Insurer's 'Improper Erosion' Theory

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Sept. 14 reversed a lower federal court's grant of summary judgment in favor of a second excess insurer in its lawsuit alleging that a primary and first excess insurer's payment of an uncovered claim arising from the insured's settlement of alleged violations of the Employee Retirement Income Security Act (ERISA) improperly eroded their policies' liability limits and prematurely triggered its excess coverage, remanding for further proceedings (Axis Reinsurance Co. v. Northrop Grumman Corporation, No. 19-55135, 9th Cir.).

  • September 13, 2020

    Split 6th Circuit Affirms: Time Limit, Not Dollar Limit, Applies To Benefit

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals in an Aug. 27 split decision affirmed a lower court's dismissal of a lawsuit that argued that an insurer should apply a long-term care insurance policy's maximum dollar limit, and not a six-year limit, to an "alternative" benefit that resulted from an earlier class action settlement (Kathleen O'Keefe v. Continental Casualty Co., No. 20-3014, 6th Cir., 2020 U.S. App. LEXIS 27561).

  • September 11, 2020

    Federal Judge: Gender Discrimination Claims Against Insured Are Not 'Accidental'

    WHITE PLAINS, N.Y. — A federal judge in New York on Sept. 9 granted insurers' motion to dismiss their insured's declaratory judgment lawsuit seeking coverage for underlying gender discrimination and intentional infliction of emotional distress claims, finding that neither claim can be deemed "accidental" and, therefore, cannot arise from an "occurrence" to trigger coverage under the policies (Waiting Room Solutions v. Excelsior Insurance Company, et al., No. 19-7978, S.D. N.Y., 2020 U.S. Dist. LEXIS 164513).

  • September 10, 2020

    Judge:  Insurer Has Duty To Defend Expedia Under Media Content Coverage Provision

    SEATTLE — A federal judge in Washington on Sept. 8 held that an insurer has a duty to defend an underlying class action alleging "bait and switch" claims against its insured Expedia Inc., rejecting the insurer's argument that the policy's "false advertising" and "trademark" exclusions bar media content coverage (National Union Fire Insurance Company of Pittsburgh, PA v. Expedia, Inc., No. 19-0896, W.D. Wash., 2020 U.S. Dist. LEXIS 163700).

  • September 10, 2020

    Panel Reverses Judgment In Favor Of T-Mobile's Insurer In Suit Arising From Injury

    MIAMI — A Florida appeals panel on Sept. 9 reversed and remanded a lower court's final judgment in favor of T-Mobile's liability insurer in a breach of contract lawsuit brought by a man who was injured outside of T-Mobile's store property (Stevie Howard v. Greenwich Insurance Company, No. 3D19-1922, Fla. App., 3rd Dist., 2020 Fla. App. LEXIS 12634).

  • September 10, 2020

    Professional Services Insurer Has Duty To Defend Arbitration Dispute, Panel Affirms

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Sept. 8 affirmed a lower federal court's ruling that a professional services insurer has a duty to defend its insured against an underlying arbitration dispute arising from its management and administration of a clinical trial, rejecting the insurer's argument that the policy's delay exclusion barred coverage (Navigators Specialty Insurance Company v. Inventiv Health Clinical, Inc., et al., No. 19-2462, 3rd Cir., 2020 U.S. App. LEXIS 28355).

  • September 09, 2020

    Law Firm In Coronavirus 'Hotspot' Dismisses Breach Of Contract Suit Against Insurer

    NEW YORK — A Manhattan law firm on Aug. 19 voluntarily dismissed without prejudice its class action alleging in a New York federal court that its “all risk” commercial property insurer breached their contract by refusing to pay claims related to the novel coronavirus (Siegel & Siegel, et al. v. Hartford Casualty Insurance Company, No. 20-04993, S.D. N.Y.).

  • September 09, 2020

    Plaintiff Voluntarily Dismisses Class Action Seeking Coverage For Trip Cancellation

    LOS ANGELES — A Los Angeles resident on Aug. 19 filed a notice of voluntary dismissal without prejudice of his class action complaint alleging in a California federal court that an insurance policy specifically covered his trip cancellation due to California’s civil authority orders in response to the novel coronavirus pandemic (Richard Robbins v. Generali Global Assistance, Inc., et al., No. 20-04904, C.D. Calif.).

  • September 09, 2020

    COMMENTARY: Commercial Property Policies Are Hardly A Panacea For COVID-19 Business Interruption Losses

    By Scott M. Seaman and Judith A. Selby

  • September 08, 2020

    Insurer Seeks Dismissal Of 'Mom And Pop' Restaurant's Coronavirus Coverage Suit

    HARRISBURG, Pa. — An all-risk commercial insurer on Sept. 2 moved to dismiss a self-proclaimed "mom and pop" South Carolina restaurant owner's class action for denying its claim for coverage for its business closure due to the COVID-19 pandemic, arguing that the insured has failed to allege "direct physical loss of or damage" to the property and that the policy's virus exclusion bars coverage (Richard Kahn, et al. v. Pennsylvania National Mutual Casualty Insurance Company, No. 20-00781, M.D. Pa.).

  • September 08, 2020

    Reinsurer Seeks Dismissal From Theater's Proposed Class Suit For Pandemic Losses

    MIAMI — A French reinsurance company on Sept. 3 moved to dismiss a theater operator's proposed class action in a Florida federal court for pandemic loss, saying the reinsurer was not a party to an all-risk insurance policy and cannot be held liable for the acts of its second-tier subsidiary (Actors Playhouse Productions, Inc. v. SCOR Se, et al., No. 20-22981, S.D. Fla.).