TRENTON, N.J. — A New Jersey federal judge on April 12 granted in part and denied in part excess insurers’ motion to dismiss three claims in a directors and officers liability coverage dispute arising from class action claims brought by shareholders, allowing breach of contract and declaratory judgment claims to proceed (Valeant Pharmaceuticals International, Inc., et al. v. AIG Insurance Company of Canada, et al., No. 18-493, D. N.J., 2019 U.S. Dist. LEXIS 63527).
ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on April 12 affirmed a lower federal court’s $1,020,000 judgment in favor of a general contractor’s surety for the full amount of a subcontractor’s surety performance bond in a dispute over costs arising from the subcontractor’s default in completing a federal government construction project (United States of America for the use of Wesco Distribution, Inc. v. Liberty Mutual Insurance Company, No. 18-1455, 8th Cir., 2019 U.S. App. LEXIS 10919).
ATLANTA — The 11th Circuit U.S. Court of Appeals on April 12 affirmed a lower federal court’s ruling that a commercial general liability insurer had no duty to indemnify its insured for an underlying $22,536,500 settlement because no accident occurred when the insured sent thousands of junk faxes with the mistaken belief that the recipients agreed to receive them (G.M. Sign Inc. v. St. Paul Fire & Marine Insurance Co., No. 17-14247, 11th Cir., 2019 U.S. App. LEXIS 10868).
OAKLAND, Calif. — A general contractor insured on April 8 filed suit in the U.S. District Court for the Northern District of California seeking coverage for an underlying lawsuit alleging that materials used as new fill for the levees in a flood protection project were deficient (Brosamer & Wall, Inc. v. Indian Harbor Insurance Company, No. 19-872, N.D. Calif.).
SAN FRANCISCO — An assignee of insureds on April 9 sued an insurer and an insurance broker in a California court, seeking to recover a $2,328,381 default judgment that was entered against the insureds in an underlying personal injury lawsuit (Maria Isabel Felix v. North American Specialty Insurance Co., et al., No. 19-575198, Calif. Super., San Francisco Co.).
RICHMOND, Va. — An insured recently asked the Fourth Circuit U.S. Court of Appeals to reverse a lower federal court's finding that its insurer has no duty to defend it against an underlying trademark infringement suit (Synaptek Corporation v. Sentinel Insurance Company, No. 18-968, 4th Cir.).
NEW YORK — A New York justice on March 29 held that an insurer has a duty to defend against an underlying injury lawsuit brought by subcontractors who were hired to perform drywall and framing work on a scaffold inside a New York building and stayed the issue of whether the insurer has a duty to indemnify (Michael Chaney, et al. v. James River Insurance Company, No. 655688/2016, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 1623).
NEW YORK — A New York justice on March 21 found that there is a question of fact regarding whether a general contractor and building owner are entitled to coverage as additional insureds under a subcontractor’s commercial general liability insurance policy for an underlying injury lawsuit because proximate causation has not been established (American Empire Surplus Lines Insurance Company v. Arch Specialty Insurance, No. 655234/2018, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 1624).
SAN DIEGO — A California appeals panel on April 8 affirmed a lower court’s finding that a plaintiff failed to satisfy its burden of establishing that an insured completed an aircraft liability insurance policy’s warranty provision to warrant coverage for an underlying crash that killed the insured and his passenger and ignited a fire that allegedly caused $1.75 million in damages to the plaintiff’s property (Rocky Wright v. The Estate Of Walter Johnson, et al., No. E068412, Calif. App., 4th Dist., Div. 2, 2019 Cal. App. Unpub. LEXIS 2421).
LAS VEGAS — A Las Vegas federal judge on April 5 found that a professional liability insurance policy exclusion clearly bars coverage for appraisals of vacant land purchased for the proposed purpose of building large condominium developments and that the undisputed facts established that the insured valued the land based on a zoning variance that would have allowed its owner to build a condominium high rise (Martin S. Rood v. Liberty Insurance Underwriters, Inc., No. 16-002586, D. Nev., 2019 U.S. Dist. LEXIS 59462).
MONTGOMERY, Ala. —A majority of the Alabama Supreme Court on April 5 held that a lower court exceeded its discretion when it disregarded the attorney-client privilege in a discovery dispute, vacating the lower court’s orders that denied an errors and omissions insurer’s motion for a protective order and directed the insurer to produce the materials for in camera inspection or discovery (Ex parte Alfa Insurance Corporation, et al., No. 1170804, Ala. Sup., 2019 Ala. LEXIS 30).
INDIANAPOLIS — Ruling on dueling motions for partial summary judgment, an Indianapolis federal judge held March 30 that a fish farm’s loss is covered under the specific coverage for spoilage under an insurance policy’s Equipment Breakdown Coverage Endorsement but the insurer did not act in bad faith when handling the claim (Westfield Insurance Company v. TCFI Bell SPE III LLC, et al., No. 16-02269, S.D. Ind., 2019 U.S. Dist. LEXIS 54899).
RICHMOND, Va. — An insured recently asked the Fourth Circuit U.S. Court of Appeals to reverse a federal court’s finding that an alleged advertising injury regarding its use of a trademark is substantially the same over time without any meaningful interruption and, therefore, is not covered under its businessowners liability and commercial umbrella insurance policies (Pennsylvania National Mutual Casualty Insurance Co. v. Beach Mart, Inc., 18-1285, 4th Cir.).
SEATTLE — Microsoft Corp.’s insurer announced on April 2 that it reached a confidential settlement with an electronic memory chip supplier of its breach of contract subrogation lawsuit seeking to recover the $150 million it paid for damages that Microsoft allegedly incurred when it had to seek substitution for dynamic random access memory (DRAM) chips after a jury found that the supplier did not breach its agreement with Microsoft (Cypress Insurance Company v. SK Hynix America Inc., No. 17-00467, W.D. Wash.).
CHICAGO — An Illinois federal judge on April 3 denied a managed care organization errors and omissions liability excess insurer’s motion to compel production of an insured’s settlement with its primary insurer in a coverage dispute arising from underlying putative antitrust class actions brought against the insured, finding that the settlement agreement’s relevance is “speculative” (Homeland Insurance Company Of New York v. Health Care Service Corporation, et al., No. 18-6306, N.D. Ill., 2019 U.S. Dist. LEXIS 56877).
BOSTON — The First Circuit U.S. Court of Appeals on April 3 affirmed a lower federal court’s dismissal of an insurer’s breach of warranty and strict liability subrogation lawsuit against a raw chicken supplier, finding that the allegations fail to sufficiently assert that raw contaminated chicken that the supplier sold to the insured was “defective” under Maine law (Starr Surplus Lines Insurance Company v. Mountaire Farms Inc., No. 18-1818, 1st Cir., 2019 U.S. App. LEXIS 9816).
COLUMBIA, S.C. — A majority of the South Carolina Supreme Court on March 6 found that an insurer's "unique position" allows it to maintain a direct malpractice action against counsel hired to represent its insured when it has a duty to defend, but noted that any inconsistency between the client's and the insurer's interests in the circumstances of a particular case is a question of law that should be addressed by the trial court (Sentry Select Insurance Company v. Maybank Law Firm, LLC, et al., No. 2016-001351, S.C. Sup.).
SHERMAN, Texas — A Texas federal judge on March 30 found that an insurance policy’s run-off exclusion bars coverage for an underlying subpoena issued to a behavioral health provider insured by the U.S. Department of Health and Human Services, Office of the Inspector General (Oceans Healthcare, L.L.C. v. Illinois Union Insurance Company, No. 18-00175, E.D. Texas, 2019 U.S. Dist. LEXIS 54844).
SACRAMENTO, Calif. — A California federal judge on March 29 granted a nonprofit organization and management liability insurer’s motion for summary judgment in a lawsuit seeking recovery of an unpaid invoice involving work on a fuel reduction project on lands that were owned in part by the city of South Lake Tahoe, finding that the underlying lawsuit arose as a result of purchase order contracts and fell under the scope of a policy exclusion (Cross Check Services, LLC v. Old Republic Insurance Company, No. 15-02113, E.D. Calif., 2019 U.S. Dist. LEXIS 54540).
PORTLAND, Ore. — An Oregon federal judge on March 18 adopted a magistrate judge’s recommendation to grant an insured’s motion for partial summary judgment and deny a commercial general liability insurer’s motion for summary judgment in a coverage dispute over an underlying defamation counterclaim brought against the insured, agreeing with the magistrate that the employment-related practices exclusion does not bar coverage (Technical Security Integration, Inc. v. Philadelphia Indemnity Insurance Company, No. 14-1895, D. Ore., 2019 U.S. Dist. LEXIS 43823).