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Mealey's Emerging Insurance Disputes

  • July 22, 2019

    Insurer Asks Panel To Find No Coverage Owed For Sexual Assault Suits Against Pastor

    NEW ORLEANS — An insurer recently asked the Fifth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that it has a duty to defend its pastor insured against three underlying lawsuits alleging that he sexually assaulted three parishioners, arguing that the lower court’s construction of its policies’ sexual or physical abuse or molestation coverage “neither mentions nor distinguishes case law interpreting those same policy provisions in a manner that precludes a duty to defend” (Philadelphia Indemnity Insurance Company v. Terry R. Knighten, No. 18-50832, 5th Cir.).

  • July 22, 2019

    Judge Denies Preliminary Injunction To Pennsylvania Underwriting Association

    HARRISBURG, Pa. — A Pennsylvania federal judge on July 17 ruled that the Pennsylvania Professional Liability Joint Underwriting Association (JUA) has not identified an imminent threat supporting the “extraordinary remedy” of preliminary injunctive relief with regard to the passing and signing of recent legislation that affects it (Pennsylvania Professional Liability Joint Underwriting Association v. Tom Wolf, No. 19-1121, M.D. Pa., 2019 U.S. Dist. LEXIS 118517).

  • July 19, 2019

    3 Exclusions Apply To Bar Coverage For Defamation Judgment, 9th Circuit Affirms

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on July 18 affirmed a lower federal court’s ruling that policy exclusions for “knowing violation of the rights of another,” “material published with knowledge of its falsity” and “knowledge of falsity” excused an insurer’s duty to indemnify a defamation judgment obtained against its insured (Bradley Stephen Cohen, et al. v. Berkley National Insurance Company, No. 17-16960, 9th Cir., 2019 U.S. App. LEXIS 21324).

  • July 19, 2019

    Board Members Deliberately Breached Policy’s Cooperation Clause, Panel Affirms

    TRENTON, N.J. — A New Jersey appeals panel on July 15 affirmed a judge’s “cogent written opinion” that rejected a borough insured’s argument that it did not commit a material and deliberate breach of an insurance policy’s cooperation clause, finding that the borough’s contentions are “without sufficient merit to warrant further discussion in a written opinion” (Jacquelyn Ferentz v. Mayor Herbert Frederick, et al., No. A-5628-17T2, N.J. Super., App. Div., 2019 N.J. Super. Unpub. LEXIS 1620).

  • July 18, 2019

    Insured’s Assignment Of Tort Claims Was Invalid, New Jersey Panel Says, Reverses

    TRENTON, N.J. — A New Jersey appeals panel on July 15 held that an insured’s assignment of its tort claims against its insurance broker was invalid, reversing a lower court’s $500,000 ruling against the broker in a lawsuit alleging that it procured inadequate business interruption insurance (AII1, LLC v. Pinnacle Insurance Solutions, LLC, et al., Nos. A-2241-17T4 and A-2291-17T4, N.J. Super., App. Div., 2019 N.J. Super. Unpub. LEXIS 1617).

  • July 17, 2019

    9th Circuit:  Insurer Breached Contract When It Denied Coverage Under War Exclusions

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 12 reversed a lower federal court’s finding that war exclusions in a motion picture/television producers portfolio insurance policy bar coverage for the expenses a production company incurred in postponing and subsequently relocating the production of the television show "Dig" from Israel because of conflict in summer 2014, finding that the insurer breached the policy when it denied coverage by defining the conflict as “war” and “warlike action by a military force” (Universal Cable Productions LLC, et al. v. Atlantic Specialty Insurance Co., No. 17-56672, 9th Cir., 2019 U.S. App. LEXIS 20704).

  • July 17, 2019

    School District Coverage Suit Arising From Harassment, Retaliation Claims Dismissed

    PINE BLUFF, Ark. — A federal judge in Arkansas on July 12 held that a math teacher’s Equal Employment Opportunity Commission charge and subsequent lawsuit alleging sexual harassment and retaliation constitute a single claim that was “first made” against a school district insured  during a 2015 policy period, finding that there is no coverage because the insured did not timely report the claim to the insurer (Pine Bluff School District v. ACE American Insurance Company, No. 18-00185, E.D. Ark., 2019 U.S. Dist. LEXIS 116167).

  • July 17, 2019

    Assault And Battery Exclusion Bars Coverage For Shooting, Federal Judge Says

    BIRMINGHAM, Ala. — A federal judge in Alabama on July 9 found that a restaurant insured breach an insurance policy’s notice provisions by failing to timely report a claim arising from an underlying shooting, further finding that the policy’s assault and battery exclusion further bars coverage (Evanston Insurance Company v. The Break I, Inc., et al., No. 18-01197, N.D. Ala., 2019 U.S. Dist. LEXIS 113109).

  • July 17, 2019

    Prior Acts/Prior Notice Exclusion Does Not Bar Coverage, Delaware Judge Rules

    WILMINGTON, Del. — In an opinion filed under seal, a Delaware judge on July 9 held that a health care facility’s concurrent excess liability insurance policy’s prior acts or prior notice exclusion does not preclude coverage for an underlying class action challenging the constitutionality of an insured’s subsidiary's private probationary services because the class action is significantly different from one filed five years before (Providence Service Corporation v. Illinois Union Insurance Company, No. 18C-06-114, Del. Super.).

  • July 17, 2019

    Assignee Appeals Ruling That TCPA Violations Arise Out Of ‘Invasion Of Privacy’

    WEST PALM BEACH, Fla. — An insured’s assignee on July 2 filed a notice of appeal to the 11th Circuit U.S. Court of Appeals challenging a federal district court’s finding that coverage for an underlying $60,413,112 consent judgment entered against the insured in a Telephone Consumer Protection Act (TCPA) violation dispute is barred by the insurance policy's "invasion of privacy" exclusion (Jacob Horn, et al. v. Liberty Insurance Underwriters, Inc., No.18-80762, S.D. Fla.).

  • July 17, 2019

    Judge: Failure To Provide Suitable Prosthetic Leg Does Not Qualify As ‘Occurrence’

    LOUISVILLE, Ky. — A federal judge in Kentucky on July 11 held that an insured’s alleged failure to provide a customer with a suitable prosthetic leg does not qualify as an “occurrence” under a commercial general liability insurance policy and dismissed the insured’s lawsuit seeking coverage for the underlying claims (Matthew Hayden, et al. v. Benchmark Insurance Company, et al., No. 19-00154, W.D. Ky., 2019 U.S. Dist. LEXIS 115948).

  • July 8, 2019

    COMMENTARY: The Surety Company’s Guide To Mitigating False Claims Act Risks

    By David B. Robbins and Jason M. Crawford

  • July 16, 2019

    No Excess Coverage For Insurer’s Receiver’s Clawback Claim, Judge Finds

    TAMPA, Fla. — Because an illegal advantage exclusion applies and a clawback claim filed by an insurer’s receiver was not a claim for a “wrongful act,” a Florida federal judge ruled July 12 that an excess insurer has no duty to defend or indemnify its insured (Akshay M. Desai v. Navigators Insurance Co., No. 18-1843, M.D. Fla., 2019 U.S. Dist. LEXIS 115897).

  • July 16, 2019

    ‘Violation Of Any Statute’ Exclusion Bars Coverage, Kentucky Majority Affirms

    FRANKFORT, Ky. — A majority of the Kentucky Court of Appeals on July 12 affirmed a lower court’s ruling that an insurance policy’s “violation of any statute” exclusion bars coverage for an underlying negligence lawsuit brought against a preschool and its owner (Brianna Robinson v. Monroe Guarantee Insurance Company, et al., Nos. 2016-CA-001667 and 2016-CA-001668, Ky. App., 2019 Ky. App. Unpub. LEXIS 500).

  • July 15, 2019

    Federal Judge:  Lack Of Coverage Compels Dismissal Of All Claims Against Insurer

    DENVER — A Colorado federal judge on July 10 granted a homeowners insurer’s motion to dismiss a lawsuit brought by an assignee of its insureds, finding that the lack of coverage that is apparent from the underlying allegations compels dismissal of all of the assignee’s claims as a matter of law (Paul Dreyer, et al. v. American National Property & Casualty Co., No. 18-03334, D. Colo., 2019 U.S. Dist. LEXIS 114772).

  • July 15, 2019

    Pennsylvania Court:  Business Pursuits Exclusion Inapplicable; Coverage Triggered

    HARRISBURG, Pa. — A Pennsylvania appellate panel on July 11 held that an insurer has failed to establish that a personal umbrella liability insurance policy’s “business pursuits” exclusion applies to bar coverage, affirming a lower court’s finding that the insurer has a duty to defend its insured but reversing the lower court’s order to the extent it imposes an absolute duty on the insurer to indemnify its insured (Nationwide Mutual Insurance Company v. August W. Arnold, et al., No. 1207 WDA 2018 and 1208 WDA 2018, Pa. Super., 2019 Pa. Super. LEXIS 692).

  • July 12, 2019

    Insurer Did Not Engage In Unfair Settlement Practices, Maryland Panel Affirms

    ANNAPOLIS, Md. — A Maryland appeals panel on July 9 affirmed the Maryland Insurance Administration (MIA)’s finding that appellants failed to prove by a preponderance of evidence that an insurer engaged in unfair settlement practices based on the insurer’s “careful consideration (and reconsideration) of the claim and explanation of its denial,” as well as the MIA's concluding that the insurer’s position is "sound and supported by the evidence” (Samuel J. McCollum, et ux. v. Maryland Insurance Administration, et al., No. 290, September Term, 2018, Md. App., 2019 Md. App. LEXIS 567).

  • July 12, 2019

    Judge: Advertising Injury Exclusion Bars Coverage For Trademark Infringement Suit

    CHARLOTTESVILLE, Va. — A senior federal judge in Virginia on July 8 held that businessowners insurance policies unambiguously exclude coverage for personal and advertising injury and, as result, the insurer has no duty to defend or indemnify its gaming company insured against an underlying trademark and trade dress infringement lawsuit brought by a competitor (Hanover Insurance Co. v. Castle Hill Studios, LLC, et al., No. 18-00072, W.D. Va., 2019 U.S. Dist. LEXIS 112150).

  • July 12, 2019

    Panel: No Coverage Owed For Defamation, Negligence Claims Arising From Sexual Abuse

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on July 10 affirmed a lower federal court’s ruling that a homeowners insurer has no duty to defend or indemnify underlying negligence and defamation claims because the policy's exclusion for damages “arising out of” sexual abuse covered all claims regardless of the theory of liability or relevant actor (United Property & Casualty Insurance v. Mary Roe, No. 18-2049, 4th Cir., 2019 U.S. App. LEXIS 20415).

  • July 11, 2019

    Third-Party Claimant Not Entitled To Bad Faith Damages Under Policy

    NEW ORLEANS — In an unpublished per curiam opinion, a Fifth Circuit U.S. Court of Appeals panel on July 9 ruled that a federal district court did not err in dismissing a third-party claimant’s insurance bad faith lawsuit against an insurer because the claimant was not an insured under a professional liability policy (Team Contractors LLC v. Waypoint Nola LLC v. Catlin Insurance Co. Inc., No. 18-30419, 5th Cir., 2019 U.S. App. LEXIS 20317).