Mealey's Emerging Insurance Disputes

  • October 30, 2019

    Judge:  Insurer Owes Insurers Pro Rata Share Of Defense Costs For Nuisance Suit

    SPRINGFIELD, Ill. — A federal judge in Illinois on Oct. 25 held that a commercial general liability insurer must pay two other CGL insurers a pro rata share of the costs they incurred defending their hog feeding operations insured against an underlying lawsuit, as well as prejudgment interest from the date the insured retendered the lawsuit to the first insurer  (Westfield Insurance Company v. Indemnity Insurance Company of North America, et al., Nos. 16-3298 and 14-3040, C.D. Ill., 2019 U.S. Dist. LEXIS 185978).

  • October 29, 2019

    Magistrate Grants Insured’s Motion To Strike Insurer’s 6 Affirmative Defenses

    MIAMI — A federal magistrate judge in Florida on Oct. 25 granted a hospital insured’s motion to strike its insurer’s six affirmative defenses in a declaratory judgment lawsuit seeking indemnification for an underlying negligence lawsuit brought by a mental health patient who alleged that she was injured by a hospital employee (Westchester General Hospital Inc. v. Evanston Insurance Company, No. 19-22831, S.D. Fla., 2019 U.S. Dist. LEXIS 184914).

  • October 28, 2019

    Dialysis Provider Portrays Assignment As Broad In ERISA, Medicare Claims Suit

    SAN FRANCISCO — A health care plan violated the Employee Retirement Income Security Act when it failed to notify insureds that the plan no longer offered in-network dialysis providers, a move that violated Medicare rules when prohibiting discrimination, and the assignment of “any cause of action” provides legal standing to pursue the claims, a provider tells the Ninth Circuit U.S. Court of Appeals in an Oct. 23 opening brief (DaVita Inc., et al. v. Amy’s Kitchen Inc., et al., No. 19-15963, 9th Cir.).

  • October 25, 2019

    Judge:  Employees’ Sexual Harassment Suit Fails To Allege Bodily Injury; No Coverage

    ST. LOUIS — A federal judge in Missouri on Oct. 23 granted an insurer’s motion for summary judgment in its declaratory judgment lawsuit challenging coverage for an underlying sexual harassment and wrongful termination lawsuit brought by former employees against a restaurant and bar insured, finding that the employees fail to allege that they have suffered a “bodily injury” to trigger coverage under the policy (State Farm Fire and Casualty Company v. Dado's Cafe, Inc., et al., No. 18-1095, E.D. Mo., 2019 U.S. Dist. LEXIS 183328).

  • October 24, 2019

    Judge Grants Insurer’s Motion For Separate Trials In Coverage Suit Over Dog Bite

    FORT WAYNE, Ind. — A federal judge in Indiana on Oct. 21 granted a homeowners insurer’s motion for separate trials of its declaratory judgment lawsuit challenging coverage for an underlying dog bite claim and a cross-claim filed against its insured, concluding that bifurcation under Federal Rule of Civil Procedure 42(b) is appropriate (The National Mutual Insurance Company v. Justin Hohenberger, et al., No. 19-79, N.D. Ind., 2019 U.S. Dist. LEXIS 182108).

  • October 24, 2019

    Insurer Disputes Coverage For Suit Arising From Flood Damage To Land Parcel

    JONESBORO, Ark. — An insurer on Oct. 15 filed suit in a federal court in Arkansas, seeking a declaration that it has no duty to defend or indemnify against an underlying lawsuit seeking damages for flooding on a parcel of land in Mississippi County, Ark. (Country Mutual Insurance Company v. Samuel Jackson, et al., No. 19-00278, E.D. Ark.).

  • October 23, 2019

    Insurer Reinforces Motion To Dismiss Coverage Suit Over $5.9M Fraudulent Transfer

    NEW YORK — In a reply brief filed Oct. 18, an insurer reinforces its motion to dismiss a financial services company insured’s breach of contract and bad faith lawsuit seeking indemnity for an underlying settlement arising from alleged “spoof emails” that resulted in a $5.9 million fraudulent wire transfer, contending that there “is no question that the loss at issue ‘arose out of’ dishonest, fraudulent and/or criminal conduct” that is excluded from coverage (SS&C Technology Holdings, Inc. v. AIG Specialty Insurance Company, No. 19-07859, S.D. N.Y.).

  • October 21, 2019

    Panel Reverses Summary Judgment Ruling In Insurer’s Favor In False Statements Case

    WEST PALM BEACH, Fla. — A Florida appeals panel on Oct. 16 held that a lower court erred in granting summary judgment in favor of an insurer, finding that the insurer failed to “conclusively negate” the appellants’ affirmative defenses to its complaint arising from claims that a former county commissioner made intentionally false statements that caused third parties to breach their agreement related to a mining project (Maggy Hurchalla, et al. v. Homeowners Choice Property & Casualty Insurance Co. Inc., Nos. 4D18-2740 and 4D18-2935, Fla. App., 4th Dist., 2019 Fla. App. LEXIS 15593).

  • October 21, 2019

    Insolvent Insurer Receiver’s $2M Consent Judgment Is Not Covered Under E&O Policy

    LITTLE ROCK, Ark. — A $2 million consent judgment sought by an insolvent insurer’s receiver is not covered under an errors and omissions insurance policy because a CEO is not a “covered person” under the E&O policy and the consent judgment does not qualify as “damages,” an Arkansas federal judge held Oct. 17, dismissing the case with prejudice (Allen W. Kerr v. Gotham Insurance Co., No. 18-423, E.D. Ark., 2019 U.S. Dist. LEXIS 180794).

  • October 18, 2019

    Insured: Court’s Misconception Of Law ‘Poisoned’ Opinion In Suit Over Data Breach

    NEW ORLEANS — An insured argues in an Oct. 1 appellant brief that an underlying lawsuit seeking to recover damages purportedly caused by a data breach of its credit card processing system triggered “personal and advertising injury” coverage under its commercial general liability insurance policy, asking the Fifth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that the insurer has no duty to defend (Landry's Inc. v. The Insurance Company of the State of Pennsylvania, No. 19-20430, 5th Cir.).

  • October 18, 2019

    Insurers Say No Coverage Owed For Claims Stemming From Gas Explosion

    BIRMINGHAM, Ala. — No coverage is owed for underlying claims filed against an insured following a gas pipeline explosion because the policies’ professional liability exclusions and pollution exclusions bar coverage for the underlying claims, two insurers assert in a complaint filed Oct. 10 in Alabama federal court (Ohio Security Insurance Co., et al. v. Superior Land Designs, et al., No. 19-1656, N.D. Ala.).

  • October 16, 2019

    Whether Criminal Acts Exclusion Applies Is A Jury Question, Appellants Argue

    ATLANTA — Appellants on Oct. 2 asked a Georgia Court of Appeals to reverse a lower court’s summary judgment ruling in favor of a homeowners insurer in its lawsuit disputing coverage for an underlying shooting injury, arguing that whether the policy’s criminal acts exclusion applies to bar coverage is a question for the jury (Vernon Marcus, et al. v. Country Mutual Insurance Co., No. A20A0391, Ga. App.).

  • October 16, 2019

    No Coverage For Doctor’s Alleged Sexual Abuse, Federal Judge Rules

    CHARLESTON, W.Va. — A West Virginia federal judge on Sept. 30 granted an insurer's motion for summary judgment in its declaratory judgment lawsuit disputing coverage for underlying claims that its doctor insured sexually assaulted his patients while they were under anesthesia and performed their colonoscopies while distracted or impaired (Westfield Insurance Co. v. Steven R. Matulis, et al., No. 17-01269, S.D. W.Va., 2019 U.S. Dist. LEXIS 168533).

  • October 16, 2019

    Texas High Court Should Review Pollution Exclusion Ruling, Insured Contends

    AUSTIN, Texas — The Texas Supreme Court should grant review of an appeals court’s ruling that an insurer owes no duty to defend an insured against underlying allegations arising out of the insured’s aerial spraying of a herbicide based on an endorsement to the policy’s pollution exclusion because the underlying suit alleges damages that are potentially covered under the policy at issue, the insured argues in an Oct. 11 petition for review (RiceTec Inc. v. StarNet Insurance Co., No. 19-0927, Texas Sup.).

  • October 16, 2019

    Insured Intended To Commit Acts That Caused Injuries; No Coverage, Panel Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 15 held that an insured’s “admissions to committing aggravated assault, battery, and false imprisonment” combined with “other stipulated and pleaded facts” establish that he intended to cause underlying injuries, affirming a lower federal court’s ruling in favor of a homeowners and umbrella liability insurer (Carly Kogler v. State Farm General Insurance Company, No. 18-15298, 9th Cir., 2019 U.S. App. LEXIS 30661).

  • October 15, 2019

    Federal Magistrate Largely Denies Insured’s Discovery Request In Crime Coverage Suit

    FRESNO, Calif. — A federal magistrate judge in California on Oct. 3 denied in part and granted in part a recycling company insured’s motion to compel in its breach of contract, bad faith and fraud lawsuit seeking crime insurance coverage for its alleged $5 million in losses caused by employee theft (rePlanet Holdings, Inc. v. Federal Insurance Company, No. 19-00133, E.D. Calif., 2019 U.S. Dist. LEXIS 173206).

  • October 15, 2019

    Forum Selection Clause Warrants Dismissal Of Global Insurer, 3rd Circuit Affirms

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Oct. 11 affirmed a lower federal court’s finding that a global insurance policy’s forum selection clause required that an insurer’s suit seeking equitable contribution from another insurer for an underlying product liability dispute be brought in the courts of Ireland (Liberty Surplus Insurance Corporation v. AXA Insurance Co., et al.,  No. 18-3028, 3rd Cir., 2019 U.S. App. LEXIS 30515).

  • October 11, 2019

    N.Y. Justice: Fact Issues Exist As To Whether Claims Servicer Acted Negligently

    NEW YORK — A New York justice on Oct. 4 held that an insurer has raised “numerous issues of fact” regarding whether its claims servicer acted negligently in handling an underlying wrongful death action involving a nursing home and, as a result, there are issues of fact as to whether the claims servicer breached a third-party administrator agreement (Hartford Fire Insurance Company v. Sedgwick Claims Management Services, Inc., No. 653915/2015, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 5326).

  • October 11, 2019

    Supplier, Insurer Have No Duty To Defend Target Against Product Liability Suit

    LOS ANGELES — A California appeals panel on Oct. 10 affirmed a lower court’s ruling that a pharmaceutical product supplier and its commercial general liability insurer have no duty to defend Target Corp. against an underlying product liability lawsuit  (Target Corporation v. Golden State Insurance Company Limited, et al., No. B279995, Calif. App., 2nd Dist., Div. 6, 2019 Cal. App. LEXIS 1005).

  • October 11, 2019

    Magistrate:  Exclusions Do Not Excuse Errors And Omissions Insurer’s Duty To Defend

    DENVER — A federal magistrate judge in Colorado on Oct. 8 concluded that although two exclusions in a real estate errors and omissions insurance policy bar coverage for an underlying lawsuit alleging that the insured failed to disclose construction defects when selling a home, the insurer’s duty to defend is not excused because the insurer has failed to establish that the underlying allegations fall “solely and entirely” under the exclusions (Juan Carlos Lua v. QBE Insurance Corporation, No. 18-01233, D. Colo., 2019 U.S. Dist. LEXIS 174983).