Mealey's Emerging Insurance Disputes

  • 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.).

  • January 28, 2020

    Discrimination Insurance Coverage Case Heads To 2nd Circuit Panel

    NEW YORK — Whether a deaf woman’s case alleged intentional discrimination outside insurable limits or unintentional discrimination will come before the Second Circuit U.S. Court of Appeals on Feb. 3 (Brooklyn Center for Psychotherapy Inc. v. Philadelphia Indemnity Insurance Co., No. 19-2266, 2nd Cir.).

  • January 28, 2020

    6th Circuit Affirms Dismissal Of Insurance Dispute That Was Resolved In Arbitration

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Jan. 27 affirmed a lower federal court’s dismissal of an insured’s lawsuit seeking recovery of more than $100,000 it paid to repair its yacht because an arbitrator already determined that the engine damage “was directly and proximately caused by a lack of required maintenance” (Rick E. Capone v. Atlantic Specialty Insurance Company, No. 19-3760, 6th Cir.).

  • January 24, 2020

    Coverage Triggered For Damage To Computer System Caused By Ransomware Attack

    BALTIMORE — A federal judge in Maryland on Jan. 23 held that an insured’s data and software constituted covered property under its business owners insurance policy and that the insured established damage to its computer system “despite its residual ability to function,” granting the insured’s motion for summary judgment in its lawsuit seeking coverage for its loss arising from a ransomware attack (National Ink and Stitch LLC v. State Auto Property and Casualty Insurance Company, No. 18-2138, D. Md., 2020 U.S. Dist. LEXIS 11411).

  • January 23, 2020

    Claim Not Based On Assertion Of Coverage For Claim Made Before Policy Inception

    FORT WAYNE, Ind. — A federal judge in Indiana on Jan. 22 held that a claim alleging that a medical malpractice insurer failed to settle a malpractice claim against its doctor insured was not first asserted before the inception of its professional liability insurance policy and, therefore, its breach of contract claim against its professional liability insurer is not based on an assertion of coverage for a claim first made against it before the policy inception (The Medical Protective Company of Fort Wayne Indiana v. American International Specialty Lines Insurance Company, No. 13-357, N.D. Ind., 2020 U.S. Dist. LEXIS 10375).

  • January 22, 2020

    4th Circuit Affirms Ruling In Coverage Suit Arising From ‘Hole-In-One’ Contest

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Jan. 21 affirmed a lower federal court’s ruling in a dispute over prize indemnity insurance coverage for a "hole-in-one" golf tournament contest, finding that the lower court correctly found that the insured did not establish the elements of duty and proximate causation (Old White Charities, Inc. v. Bankers Insurance, LLC, No. 18-1914, 4th Cir.).

  • January 22, 2020

    CGL Insurer Disputes Coverage For Suit Arising From Defective Chicken Products

    FAYETTEVILLE, Ark. — A commercial general liability insurer on Jan. 9 filed suit in a federal court in Arkansas, seeking a declaration that it has no duty to defend or indemnify against an underlying jury verdict that found that its insured was negligent and committed breach of contract by manufacturing defective chicken that was supplied to the New York City School District (NYCSD)  (Nationwide Mutual Insurance Co. v. Ozark Mountain Poultry Inc., et al., No. 20-05014, W.D. Ark.).