Mealey's Emerging Insurance Disputes

  • October 07, 2019

    Federal Judge Dismisses Suit Alleging Insurer, Brokers Concocted ‘Kickback’ Scheme

    HONOLULU — In four separate orders, a federal judge in Hawaii on Sept. 26 dismissed insureds’ lawsuit seeking coverage for property damage stemming from the May 2018 eruption of Kilauea Volcano, rejecting the insureds’ assertion that a homeowners insurer and brokers conducted a deceptive “kickback” scheme that resulted in their purchase of “essentially worthless” coverage (Stephen G. Aquilina, et al. v. Certain Underwriters at Lloyd's Syndicate #2003, et al., No. 18-00496, D. Hawaii, 2019 U.S. Dist. LEXIS 165863).

  • October 02, 2019

    Insureds, Insurer Fail To Show Stay Of Coverage Suit Outweighs Potential Harm

    NORFOLK, Va. — A federal judge in Virginia on Sept. 27 denied a joint motion by a professional liability insurer and its insureds to stay the insurer’s declaratory judgment lawsuit pending the outcome of an underlying state court lawsuit, finding that they failed to justify their request for the stay “by clear and convincing circumstances” (Minnesota Lawyers Mutual Insurance Company v. Kevin B. Rack, et al., No. 19-38, E.D. Va., 2019 U.S. Dist. LEXIS 167340).

  • October 02, 2019

    Panel Reverses, Remands To Permit Insurer To Claim Reimbursement Of All Fees

    SAN FRANCISCO — A California appeals panel on Sept. 30 affirmed a grant of summary adjudication in favor of a professional liability insurer but reversed and remanded for the lower court to reopen the summary adjudication proceedings to permit the insurer to claim reimbursement of all underlying fees and costs it incurred defending its lawyer insured against legal malpractice claims (Berkley Assurance Company v. Law Offices of David M. Wiseblood, et al., No. A155070, Calif. App., 1st Dist., Div. 4, 2019 Cal. App. Unpub. LEXIS 6619).

  • October 02, 2019

    Insured Withdraws Appeal Of Take-Nothing Judgment In Superstorm Sandy Suit

    NEW ORLEANS — In a mandate issued Sept. 23, the Second Circuit U.S. Court of Appeals announced that an insured and the Federal Emergency Management Agency filed a stipulation withdrawing the insured’s appeal of a lower federal court’s dismissal of his lawsuit alleging that he was wrongfully denied $141,274.50 in insurance proceeds for Superstorm Sandy damage to his Long Beach, N.Y., home (David Clutter v. William B. Long, et al., No. 18-3520, 2nd Cir.).

  • October 01, 2019

    Federal Judge: Special Events Policy’s Assault And Battery Exclusion Bars Coverage

    SACRAMENTO, Calif. — A federal judge in California on Sept. 30 granted an insurer’s motion for summary judgment in its declaratory judgment lawsuit, finding that a special events policy’s assault and battery exclusion bars coverage for underlying negligence and premises liability claims brought against a concert promoted insured (Certain Underwriters at Lloyd's of London subscribing to Policy No. EH7713140 v. WorldOne Presents, LLC, et al., No. 18-02432, E.D. Calif., 2019 U.S. Dist. LEXIS 169474).

  • October 01, 2019

    Judge Declines To Exercise Jurisdiction Of Coverage Suit Over Concert Injuries

    LOUISVILLE, Ky. — A federal judge in Kentucky on Sept. 30 entered judgment three days after refusing to exercise jurisdiction over an insurer’s lawsuit seeking a declaration that it has no duty to defend or indemnify against an underlying lawsuit arising from several injuries and one fatality that occurred at a musical event that was hosted by the insured (Secura Insurance v. TFGBAR, LLC, et al., No. 18-00313, W.D. Ky., 2019 U.S. Dist. LEXIS 166276).

  • October 01, 2019

    Federal Judge Reconsiders Ruling In Coverage Suit Over Copyright Infringement Claims

    NEW YORK — A federal judge in New York on Sept. 27 entered judgment in favor of general and excess liability insurers one day after granting their motion to reconsider an earlier ruling that they had a duty to defend their insured against an underlying copyright infringement suit, finding that they had no duty to defend (Jovani Fashion, Ltd. v. Federal Insurance Company, et al., No. 17-4518, S.D. N.Y., 2019 U.S. Dist. LEXIS 165898).

  • September 27, 2019

    Coverage Barred By Business Pursuits, Rental Exclusion, California Panel Affirms

    SAN FRANCISCO — A California appeals panel on Sept. 26 affirmed a lower court’s ruling that a homeowners insurance policy’s business pursuits/rental exclusion precludes coverage for an underlying lawsuit arising from a porch collapse injury, rejecting the insureds’ argument that the exclusion’s ordinarily incident exception applies (Paul Terrell, et al. v. State Farm General Insurance Company, No. A152541, Calif. App., 1st Dist. Div. 1, 2019 Cal. App. LEXIS 931).

  • September 26, 2019

    Court Erred In Finding Dishonest Acts Exclusion Bars Coverage, Majority Says

    CINCINNATI — In reversing and remanding a lower federal court, a majority of the Sixth Circuit U.S. Court of Appeals on Sept. 25 found that an insurance policy’s “dishonest acts” exclusion does not bar coverage for a steel products producer’s lawsuit alleging that a trade association published false statements about its products (Evanston Insurance Co. v. Certified Steel Stud Association, Inc., et al., Nos.18-3406 and 3407, 6th Cir., 2019 U.S. App. LEXIS 28937).

  • September 26, 2019

    Additional Insured Seeks Coverage For Underlying Food Contamination Claims

    MIAMI — In a lawsuit filed Sept. 20 in Florida federal court, the manufacturer of prepackaged vegetable trays seeks a ruling that an insurer owes coverage to the manufacturer as an additional insured for claims arising out the contamination of produce used in the vegetable trays (Del Monte Fresh Produce N.A. Inc. v. AMCO Insurance Co., et al., No. 19-23917, S.D. Fla.).

  • September 24, 2019

    Judge: Insureds Offer ‘No Valid Excuse’ For Delay In Notifying Insurer Of NFL Claim

    CHICAGO — A federal judge in Illinois on Sept. 20 held that insureds failed to comply with their insurance policy’s requirement of timely notifying the insurer of underlying claims brought by the National Hockey League, granting the insurer’s cross-motion for summary judgment (Frankenmuth Mutual Insurance Company v. The Hockey Cup, LLC, et al., No. 18-8142, N.D. Ill., Eastern Div., 2019 U.S. Dist. LEXIS 160278).

  • September 24, 2019

    Breach Of Contract Exclusion Renders Coverage Illusory, Panel Says In Reversal

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on Sept. 23 held that a breach of contract exclusion in an insurance policy endorsement rendered the policy’s errors and omissions professional liability coverage illusory, reversing and remanding a lower court’s ruling in favor of the insurer in its declaratory judgment lawsuit (Crum & Forster Specialty Insurance Company v. DVO, Inc., No. 18-2571, 7th Cir., 2019 U.S. App. LEXIS 28714).

  • September 23, 2019

    Parties Reach Settlement In Coverage Case Over Insurers’ Receiver’s Clawback Claim

    TAMPA, Fla. — A federal judge in Florida on Sept. 16 said that a medical doctor who is an officer and director of a number of now-insolvent insurers settled his coverage dispute with his excess insurer concerning an underlying clawback claim filed by the insolvent insurers’ receiver (Akshay M. Desai v. Navigators Insurance Co., No. 18-1843, M.D. Fla.).

  • September 23, 2019

    Washington Panel Affirms No Coverage Ruling For Minority Shareholder Suit

    SPOKANE, Wash. — A Washington appeals panel on Sept. 19 affirmed a lower court's ruling in favor of an insurer in a dispute over coverage for an underlying lawsuit brought by minority shareholders (Grange Insurance Association v. Mielke Brothers Inc., et al., No. 361951, Wash. App., Div. 3, 2019 Wash. App. LEXIS 2428).

  • September 20, 2019

    Federal Judge Reserves Ruling On Insurer’s Coverage Duties For Trademark Claims

    SEATTLE — A federal judge in Washington on Sept. 17 held that an insurer has no duty to defend or indemnify its plumbing company insured under an insurance policy’s businessowners liability coverage, reserving his ruling on whether an underlying trademark infringement suit triggers the policy’s cyber liability and data breach response coverage (Mid-Century Insurance Company v. Hunt's Plumbing & Mechanical LLC, et al., No. 19-0285, W.D. Wash., 2019 U.S. Dist. LEXIS 160098).

  • September 19, 2019

    Husband Intended To Kill Wife; No Coverage Owed, Michigan Panel Says In Reversal

    DETROIT — A Michigan appeals panel on Sept. 17 held that “there is no other conclusion but that” a husband intended to take a knife and kill his wife, despite the fact that he was delusional, reversing and remanding a lower court’s ruling that a homeowners insurer owes coverage for the underlying wrongful death lawsuit (State Farm Fire & Casualty Insurance Company v Noah Ravenscroft, et al., No. 345377, Mich. App., 2019 Mich. App. LEXIS 5538).

  • September 18, 2019

    Judge Enters Default Judgment Against Insured In Coverage Suit Over Alleged Suicide

    ANCHORAGE, Alaska — A federal judge in Alaska on Sept. 13 granted Allstate Insurance Co.’s motion for a default judgment against its insured in its lawsuit seeking a declaration that it has no duty to indemnify him against an underlying lawsuit over the alleged suicide death of his daughter (Allstate Insurance Company v. Estate of Maia Grace Elizabeth Walker, et al., No. 19-0063, D. Alaska).

  • September 18, 2019

    Judge Refuses To Dismiss $1M Professional Liability Coverage Suit Over Facility Fire

    BALTIMORE — A federal judge in Maryland on Sept. 11 denied an insurer’s motion to dismiss a lawsuit seeking a declaration that a professional liability insurance policy provides up to $1 million in coverage for underlying claims for injuries and damages arising from a March 2017 fire that occurred at an assisted living facility, finding that the declaratory judgment lawsuit is appropriately beforethe federal court (Tarhonika Vaughn, et al, v. Certain Underwriters at Lloyd's, London, No. 18-3375, D. Md., 2019 U.S. Dist. LEXIS 155723).

  • September 17, 2019

    Magistrate:  Claims Arose Out Of Professional Services; Exclusion Limits Coverage

    PROVIDENCE, R.I. — A federal magistrate judge in Rhode Island on Sept. 12 held that an emergency room nurse’s underlying negligence lawsuit brought against a doctor arose out of the doctor’s rendering of professional services that triggered coverage under health care professional liability insurance coverage, further finding that coverage is limited by the policy’s workers’ compensation exclusion (ProAssurance Specialty Insurance Company, Inc. v. Ricky W. McCullough, M.D., et al., No. 18-343, D. R.I., 2019 U.S. Dist. LEXIS 155865).

  • September 17, 2019

    Texas High Court Accepts Certified Question In Suit Over Fatal ATV Accident

    AUSTIN, Texas — According to its Sept. 13 orders pronounced, the Texas Supreme Court accepted a certified question from the Fifth Circuit U.S. Court of Appeals to determine whether there’s a policy language exception to Texas’ eight-corners rule in a dispute over homeowners coverage for underlying claims that insureds were negligent in failing to supervise and instruct their 10-year-old grandson, who died while in their care (State Farm Lloyds v. Janet Richards, et al., No. 19-0802, Texas Sup.).