Mealey's Emerging Insurance Disputes

  • February 18, 2020

    Kentucky Panel Reverses, Finds Exclusion Bars Coverage For Cardiac Litigation

    FRANKFORT, Ky. — A Kentucky appeals panel on Feb. 14 held that a directors and officers liability insurance policy’s exclusion bars coverage for insureds’ costs in defending 127 underlying lawsuits alleging violations of federal health care laws, reversing the lower court (Darwin Select Insurance Company v. Ashland Hospital Corporation, et al., Nos. 2016-CA-000372-MR, 2016-CA-000396-MR, 2017-CA-001167-MR, 2017-CA001168-MR and 2017-CA-001756-MR, Ky. App., 2020 Ky. App. Unpub. LEXIS 104).

  • February 18, 2020

    Insurer Did Not Breach Duty To Defend School District, Wisconsin Majority Affirms

    MADISON, Wis. —A majority of the Wisconsin Supreme Court on Feb. 13 held that two insurers did not breach their duty to defend a school district insured against an underlying lawsuit brought by six retired employees, affirming a lower court’s ruling that the insurers are not responsible for any attorney fees the insured paid for the coverage dispute (Roger Choinsky, et al. v. Employers Insurance Company of Wausau, et al., 2018AP116, Wis. Sup., 2020 Wisc. LEXIS 16).

  • February 11, 2020

    Insureds Ask 9th Circuit To Reverse No Coverage Ruling Of Adult Film Actors’ Suit

    SAN FRANCISCO — A commercial landlord insured recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that coverage is barred for actors’ underlying lawsuit alleging that they contracted the human immunodeficiency virus (HIV) in the course of filming sexual activity at the insured’s premises, arguing that commercial tenants are absent from the list of persons whose conduct causing sexual acts are excluded under the policy (Atain Specialty Insurance Company Inc. v. Armory Studios LLC, et al., Nos. 19-15745 and 19-15820, 9th Cir.).

  • February 11, 2020

    Insured Says Trial Court Erred In Enforcing Jewelry Exclusion In Homeowners Policy

    ATLANTA — The Georgia Court of Appeals should reverse a trial court’s ruling in favor of a homeowners insurer because the insured never received a policy booklet that included a jewelry exclusion used by the insurer to limit the insured’s recovery following a home burglary, the insured argues in a Jan. 13 appellant brief (Ethel L. Munson v. The Charter Oak Fire Insurance Co., No. A20A0906, Ga. App.).

  • February 10, 2020

    Intellectual Property Exclusion Bars Coverage For Suit Against Fashion Designer

    NEW YORK — The Second Circuit U.S. Court of Appeals on Feb. 7 affirmed a lower federal court’s ruling that a commercial general liability insurance policy intellectual property exclusion relieves the insurer from its duty to defend an underlying lawsuit against its fashion designer insured (Nanette Lepore, et al. v. Hartford Fire Insurance Company, No. 19-778, 2nd Cir., 2020 U.S. App. LEXIS 3830).

  • February 07, 2020

    Panel Rejects Appellant’s Reliance On Employee Status To Claim He Was Insured

    LOS ANGELES — A California appeals panel on Feb. 6 rejected an unmarried couple’s argument that a lower court erred when it ruled that an insurer did not breach its contract to the insureds by refusing to cover one member of the couple when they were both sued for malicious prosecution related to an underlying lawsuit, finding that the appellants have failed to raise triable issues of material fact that one of the appellants was an employee for purposes of coverage and that the insurer was required to treat the other appellant as a spouse (Gilbert Purcell, et al. v. Farmers Insurance Exchange, et al., No. B292698, Calif. App., 2nd Dist., Div. 1, 2020 Cal. App. Unpub. LEXIS 886).

  • February 06, 2020

    Collectability Should Not Be Considered In Malpractice Claim, Panel Says In Reversal

    NEW ORLEANS — A Louisiana appeals panel on Feb. 5 held that collectability on an underlying personal injury claim stemming from a car accident does not affect the recovery in a legal malpractice claim against the lawyer who represented the underlying claimant, reversing a lower court’s ruling in favor of the lawyer and his malpractice insurer and remanding for the lower court to consider the amount of damages suffered by the claimant as a result of the accident (Elaine Ewing v. Westport Insurance Corporation, et al., No. 19-551, La. App., 3rd Dist., 2020 La. App. LEXIS 172).

  • February 06, 2020

    Assault And Battery Exclusion Bars Liquor Liability, CGL Coverage, 4th Circuit Affirms

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Feb. 5 affirmed a lower federal court’s ruling that an insurer has no duty to defend or indemnify its insured against an underlying lawsuit, finding “no reversible error” in the lower court’s ruling (Scottsdale Insurance Company v. Christie Michelle Acosta, et al., No. 18-1808, 4th Cir., 2020 U.S. App. LEXIS 3483).

  • February 04, 2020

    Panel Affirms Stay Of Suit Seeking Validity Of Insurer’s Subrogation Claim

    SAN FRANCISCO — A California appeals panel on Jan. 31 affirmed a lower court’s ruling that stayed an appellant’s declaratory judgment lawsuit disputing the validity of a professional liability insurer’s subrogation claim against his family trust, finding that the lower court’s determination that an ongoing lawsuit in Maryland “presented a more suitable forum” was within the court’s discretion (John Berman v. Minnesota Lawyers Mutual Insurance Company, No. A155394, Calif. App., 1st Dist., Div. 3).

  • February 04, 2020

    Coverage Triggered But Insurer Did Not Act In Bad Faith, Federal Judge Rules

    NEW YORK — A federal judge in New York on Jan. 31 granted a financial services company insured’s cross-motion for summary judgment as to its breach of contract claim in its lawsuit seeking indemnity for an underlying settlement arising from alleged “spoof emails” that resulted in a $5.9 million fraudulent wire transfer, but ruled in favor of the insurer as to a bad faith claim (SS&C Technology Holdings, Inc. v. AIG Specialty Insurance Company, No. 19-07859, S.D. N.Y., 2020 U.S. Dist. LEXIS 17201).

  • February 04, 2020

    Nebraska High Court Reverses No Coverage Ruling In Suit Involving Beatrice Six

    LINCOLN, Neb. — The Nebraska Supreme Court on Jan. 31 held that a lower court erred in ruling that a “professional services” insurance policy exclusion bars coverage for underlying civil rights lawsuits brought by six people who were exonerated nearly two decades after being charged with committing a murder in Beatrice, Neb., finding that the exclusion does not apply to law enforcement (Gage County, Nebraska v. Employers Mutual Casualty Company, No. S-18-1118, Neb. Sup., 2020 Neb. LEXIS 15).

  • February 03, 2020

    Federal Judge Remands Professional Liability Coverage Suit Against Lloyd’s Of London

    SHERMAN, Texas — A federal judge on Jan. 31 granted insureds’ motion to remand their breach of contract lawsuit seeking professional liability coverage for an underlying trade secret dispute, finding that Certain Underwriters at Lloyd’s London have failed to satisfy their burden of establishing that the jurisdictional amount is met as to each member who belongs to the Lloyd’s syndicates and bear the liability for the risk (Xome Settlement Services, LLC, et al. v. Certain Underwriters at Lloyds, London, No. 18-00837, E.D. Texas, 2020 U.S. Dist. LEXIS 16516).

  • February 03, 2020

    Material Misrepresentation Warrants Summary Judgment In Insurer’s Favor, Panel Says

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Jan. 31 affirmed a lower federal court’s summary judgment ruling in favor of a commercial property insurer in an insured’s breach of contract lawsuit arising from its vandalism claims, finding that the insured made material misrepresentations that contractually relieved the insurer of any potential duty to pay for the claims (American Land Investment Ltd. v. Allstate Insurance Company, et al., No. 19-3317, 6th Cir., 2020 U.S. App. LEXIS 3095).

  • February 03, 2020

    Delaware High Court:  Whether Assault Is An Accident Is Decided By Insured’s Intent

    DOVER, Del.— The Delaware Supreme Court on Jan. 29 reversed and remanded a lower court’s ruling that an insurer has a duty to defend and indemnify its insured against underlying lawsuits arising from the death of a high school student, finding that “whether an assault is an ‘accident’ is determined by the intent of the insured, and not by the viewpoint of the victim” (USAA Casualty Insurance Company v. Trinity Carr, No. 273, 2019, Del. Sup., 2020 Del. LEXIS 38).

  • February 03, 2020

    Panel: Insurers Have Right To Appeal Small Claims Default Against Insured

    SANTA ANA, Calif. — Calling it a case of first impression, a California appeals court on Jan.  30 held that insurers have the right to appeal a small claims default judgment that was entered against their insureds and directed a lower court to reinstate an automobile insurer’s notice of appeal of a $10,000 default judgment entered against its insured over liability for an automobile accident (Pacific Pioneer Insurance Company v. Superior Court of Orange County, et al., No. G057326, Calif. App., 4th Dist., Div. 3).

  • February 03, 2020

    Yacht Owner’s Expert Doesn’t Save Breach Claim Against Insurer Over Sinking

    CENTRAL ISLIP, N.Y. — A New York federal judge on Jan. 29 admitted testimony from a marine expert for a man seeking insurance coverage for a sunken boat but then awarded summary judgment to the man’s insurer anyhow after finding no evidence that it breached his policy (Edward L. Clark v. The Travelers Companies, Inc., No. 2:16-cv-02503, E.D. N.Y., 2020 U.S. Dist. LEXIS 15770).

  • January 30, 2020

    Judge:  Directors and Officers Liability Insurer Owes Defense For Shareholder Derivative Suit

    PHILADELPHIA — A federal judge in Pennsylvania on Jan. 27 declared that a directors and officers liability insurer has a duty to defend its insureds against an underlying shareholder derivative lawsuit, rejecting the insurer’s argument that the policy’s “related acts” provision and “prior acts” exclusion bar coverage (Robert Vito, et al. v. RSUI Indemnity Company, No. 19-2468, E.D. Pa., 2020 U.S. Dist. LEXIS 14724).

  • January 30, 2020

    Coverage Applies To Officers’ Alleged Wrongful Acts, Delaware Judge Rules

    NEW CASTLE, Del. — A Delaware judge on Jan. 21 held that coverage under an “Advanced Boardroom and Company Protection Policy” applies to the purported “wrongful acts” and any “interrelated wrongful acts” committed by two company officers on or after the date in the policy’s retroactive date exclusion (Ferrellgas Partners L.P., et al. v. Zurich American Insurance Company, et al., No. N19C-05-275, Del. Super., 2020 Del. Super. LEXIS 41).

  • January 30, 2020

    No Coverage Owed For Underlying Asbestos Exposure Claim Filed Against Insured

    MOUNT VERNON, Ill. — The Fifth District Illinois Appellate Court on Jan. 27 affirmed a trial court’s ruling that an employers liability insurer has no duty to defend an insured against an underlying asbestos bodily injury claim because the underlying asbestos exposure claim qualifies as a “bodily injury by disease” and is subject to the policy’s 36-month suit limitation provision (Apex Oil Co. Inc. v. Arrowood Indemnity Co., No. 5-18-0396, Ill. App., 5th Dist., 2020 Ill. App. Unpub. LEXIS 107).

  • January 28, 2020

    Crash Victim, Insurer Appeal Bad Faith, Consumer Law Court Ruling

    BOSTON — A woman severely injured in an alcohol-involved vehicle crash on Oct. 1, 2019, asked the First Circuit U.S. Court of Appeals to rule that a district court erred by not recognizing insurance claims a nightclub assigned to her and by not trebling the value of her claim claims under the state’s consumer protection law (Capitol Specialty Insurance Corporation v. Kailee M. Higgins, et al., No. 19-1496, 1st Cir.).