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Mealey's Emerging Insurance Disputes

  • June 27, 2019

    California Panel: Insurers Owe No Defense For Suit Filed Against Property Developer

    SAN DIEGO — A California appeals panel on June 26 affirmed a lower court’s ruling that three insurers have no duty to defend against an underlying lawsuit alleging that their property developer insured made false representations about the property to the buyer, finding that there was no unexpected and unintended event between the insured’s intentional construction of a portion of property improvements and the encroachment onto an adjacent property (Majid Mortazavi, et al., v. Federal Insurance Company, et al., No. D072923, Calif. App., 4th Dist., Div. 1, 2019 Cal. App. Unpub. LEXIS 4320).

  • June 27, 2019

    Civil Investigative Demand Constitutes ‘Claim’ Under Professional Liability Policy

    WILMINGTON, Del. — A Delaware judge on June 24 found that a civil investigative demand issued by the Texas attorney general against an insured constitutes a claim for nonmonetary relief that alleged a wrongful act under a professional liability insurance policy, triggering primary and excess insurers’ duty defend and indemnify and denying their partial motion to dismiss (Conduent State Healthcare, LLC, et al. v. AIG Specialty Insurance Company, No. N18C-12-074, Del. Super.).

  • June 27, 2019

    Judge Refuses To Dismiss Third-Party Beneficiary Claim Against Claims Investigator

    NEW ORLEANS — A federal judge in Louisiana on June 25 denied a professional liability insurer and a claims investigator's motion to dismiss an insured’s third-party beneficiary claim pursuant to Louisiana Civil Code Article 1978, finding that the insured has pleaded facts demonstrating that it is a third-party beneficiary to the contract between the insurer and the claims investigator (Hammerman & Gainer, LLC v. Lexington Insurance Co., No. 18-6729, E.D. La., 2019 U.S. Dist. LEXIS 105913).

  • June 26, 2019

    No Coverage Owed For Suit Alleging Insured Illegally Installed Fiber-Optic Cable

    KANSAS CITY, Mo. — A Missouri appeals court panel on June 25 affirmed a lower court’s ruling that two insurers have no duty to contribute to another insurer’s defense of an underlying class action alleging that their insured illegally installed or used more than 2,000 miles of fiber-optic cable on class members' land that was only subject to a limited electric-utility easement or occupancy, finding that there were no underlying claims for loss of or damage to tangible property or for personal or advertising injury to trigger coverage (Navigators Insurance Company v. American Home Assurance Company, et al., No. WD82118, Mo. App., Western Dist., Div. 3, 2019 Mo. App. LEXIS 1010).

  • June 26, 2019

    Insurer Has No Duty To Defend, Indemnify Shareholder Derivative Suit, Judge Rules

    CHICAGO — A federal judge in Illinois on June 24 held that an insurer has no duty to defend or indemnify against an underlying shareholder derivative lawsuit because the policy’s insured versus insured (IVI) exclusion bars coverage and the insured has failed to establish that any exception to the exclusion applies to trigger coverage (World Water Works Holdings, Inc. v. Continental Casualty Co., et al., No. 17-5237, N.D. Ill., Eastern Div., 2019 U.S. Dist. LEXIS 104938).

  • June 26, 2019

    Judge Partly Grants Insurer’s Motion To Dismiss In Coverage Suit Over Bank Fraud

    WILMINGTON, Del. — A Delaware judge on May 31 granted in part and denied in part an insurer’s motion to dismiss claims in an insured’s lawsuit seeking coverage for its alleged losses caused by an employee who conspired to commit bank fraud, finding that the insured has not sufficiently pleaded a bad faith claim against the insurer (WSFS Financial Corporation, et al. v. Great American Insurance Company, No. N18C-09-088, Del. Super., 2019 Del. Super. LEXIS 265).

  • June 26, 2019

    MGM Resorts: Insurer’s Refusal To Defend Mass Shooting Claims Is ‘Unconscionable’

    LAS VEGAS — MGM Resorts International and others on June 19 sued their commercial general liability insurer in a Nevada federal court for breach of contract and bad faith, contending that the insurer wrongfully breached its duty to defend them against more than 4,000 claims arising from the Oct. 1, 2017, mass shooting at the Route 91 Harvest Country Music Festival (MGM Resorts International, et al. v. Zurich American Insurance Company, No. 19-01051, D. Nev.).

  • June 24, 2019

    Negligence Claims Do Not Qualify As ‘Occurrence’ Under Condo Policy, Judge Rules

    BAY CITY, Mich. — A federal judge in Michigan on June 20 held that underlying claims against a condominium unit owner fail to qualify as an “occurrence” under a Condominium Unitowners insurance policy, granting the insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to continue to defend or indemnify against two underlying civil lawsuits brought against its insured (State Farm Fire And Casualty Company v Robert DeLand, et al., No. 18-13077, E.D. Mich., Northern Div., 2019 U.S. Dist. LEXIS 102920).

  • June 21, 2019

    Judge:  Insurers Owe No Coverage For Washington’s Suit Against Tow Truck Co.

    TACOMA, Wash. — A Washington federal judge on June 20 granted insurers’ motion for summary judgment in their lawsuit disputing coverage for an underlying action brought by the attorney general for the State of Washington against their tow truck company insured, finding that the underlying complaint fails to allege an “accident” or “accidental” damage to warrant coverage (Western National Assurance Company, et al. v. Burns Towing, Inc., No. 18-05886, W.D. Wash., 2019 U.S. Dist. LEXIS 103469).

  • June 21, 2019

    Federal Judge Remands Suit Alleging Insurer Unlawfully Charged Credit Card

    LOS ANGELES — A California federal judge on June 19 remanded a lawsuit alleging that an insurer unlawfully and fraudulently charged $1,132.41 to a credit card, finding that the insurer failed to establish by a preponderance of the evidence that the amount in controversy is more than $50,000 to warrant federal jurisdiction (Shahnaz Niknam v. Safeco Insurance Company, et al., No. 19-04937, C.D. Calif., 2019 U.S. Dist. LEXIS 102787).

  • June 20, 2019

    Trial Court Properly Refused To Consider Bad Faith Claims, Panel Says

    KANSAS CITY, Mo. — The Third Division of the Western District of the Missouri Court of Appeals on June 18 determined that a trial court did not err in refusing to consider the bad faith claims alleged against an insurer because the trial court correctly determined that it had no jurisdiction based on a mandate issued by the Missouri Supreme Court (Franklin D. Allen v. Atain Specialty Insurance Co., No. WD81677, Mo. App., W.D., Div. 3, 2019 Mo. App. LEXIS 961).

  • June 19, 2019

    California Panel Affirms No Homeowners Coverage For Jewelry Store Shooting

    SAN FRANCISCO — A California appeals panel on June 17 affirmed that there is no coverage under a homeowners insurance policy's personal injury provision for the discharge of a firearm after a robbery attempt, finding that the victim has failed to present any evidence to create a triable issue of material fact as to whether the first shot in the robbery attempt was intentional (CSAA Insurance Exchange, et al. v. Oscar Herrera, No. A153429, Calif. App., 1st Dist., 2019 Cal. App. Unpub. LEXIS 4061).

  • June 19, 2019

    New York Justice: Insurer Has Duty To Share In Defense Of Lanham Act Suit

    NEW YORK — A New York justice on May 29 held that an insurer has a duty to share in the defense costs in an underlying Lanham Act lawsuit against its insured, finding that the insurer has failed to satisfy its burden of establishing that policy exclusions excuse it from providing coverage (Continental Casualty Company v. KB Insurance Co., Ltd., et al., No. 652103/2018, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 2843).

  • June 19, 2019

    No Coverage For Intentional Murder, 10th Circuit Affirms

    DENVER — The 10th Circuit U.S. Court of Appeals Court on June 17 affirmed a lower federal court’s ruling that an insurer has no duty to defend or indemnify its insureds against an underlying lawsuit over a fatal shooting, noting that binding precedent concluded that “murder could never be an ‘accident’” (State Farm Fire & Casualty Company v. Victoria Williams, et al., No. 18-5080, 10th Cir., 2019 U.S. App. LEXIS 18178).

  • June 18, 2019

    Specific Matter Exclusion Bars Coverage For Alleged Scheme, 9th Circuit Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on June 14 affirmed a lower federal court’s ruling that an insurance policy’s specific matter exclusion bars coverage for underlying lawsuits alleging that an insured's directors and officers participated in a scheme to transfer encumbered properties to their relatives while avoiding banks' interests in the properties (Ocean Towers Housing Corporation v. Evanston Insurance Co., No. 17-56838, 9th Cir., 2019 U.S. App. LEXIS 17971).

  • June 18, 2019

    5th Circuit Vacates, Remands Orders Approving Global Settlement Over Ponzi Scheme

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on June 17 vacated and remanded a lower federal court’s orders that approved a global settlement between the receiver for Stanford International Bank and insurers and barred all actions against the insurers concerning the policies or Stanford entities in a dispute arising from the Stanford financial Ponzi scheme, finding that the lower court lacked authority to approve the settlement (Securities And Exchange Commission v. Stanford International Bank, Limited, et al., No. 17-10663, 5th Cir., 2019 U.S. App. LEXIS 18111).

  • June 18, 2019

    Insurer Had Duty To Defend Class Action Against Energy Company, 1st Circuit Affirms

    BOSTON — The First Circuit U.S. Court of Appeals on June 17 affirmed a lower federal court’s ruling that a directors and officers liability insurer has a duty to defend against an underlying class action alleging that its private energy company insured engaged in misconduct that resulted in customers receiving higher bills than what was represented, rejecting the insurer’s contention that the underlying complaint fails to allege that the insured engaged in conduct that qualifies as an “occurrence” or caused any “bodily injury” under the policy (Zurich American Insurance Company v. Electricity Maine LLC, et al., No. 18-1968, 1st Cir., 2019 U.S. App. LEXIS 18074).

  • June 18, 2019

    Judge:  Ambiguous Policy Term, Contradictory Exclusionary Language Favor Coverage

    DOVER, Del. — A Delaware judge on June 12 held that because the meaning of “accident” in an insurance policy’s definition of "occurrence" is ambiguous and because the language of the intentional tort policy exclusion is “confusing and contradictory,” the policy language must be construed against an insurer, finding that the insurer has a duty defend and indemnify its insured against underlying lawsuits arising from the tragic death of a high school student (USAA Casualty Insurance Co.  v. Trinity Carr, No. K18C-05-050 NEP, Del. Super., Kent. Co., 2019 Del. Super. LEXIS 280).

  • June 17, 2019

    Prior Acts Exclusion Bars Excess Directors, Officers Coverage, Judge Rules

    MINNEAPOLIS — A federal judge in Minnesota on June 4 found that an excess directors and officers liability insurance policy’s prior acts exclusion bars coverage for the underlying settlement of securities and derivative lawsuits alleging that the insured failedto disclose material, related-party relationships (Tile Shop Holdings, Inc., Plaintiff, v. Allied World National Assurance Company, No. 17-776, D. Minn., 2019 U.S. Dist. LEXIS 93238).

  • June 17, 2019

    Panel: No Coverage For Insured’s ‘Deliberately Fraudulent’ Conduct In SEC Suit

    ATLANTA — The 11th Circuit U.S. Court of Appeals on June 11 affirmed a lower court’s ruling in favor of a directors and officers liability insurer, finding that there is no coverage under the policy because the insured was found to have engaged in “deliberately fraudulent” conduct in an underlying civil lawsuit brought by the Securities and Exchange Commission (Daniel Imperato v. Navigators Insurance Company, No. 17-12959, 11th Cir., 2019 U.S. App. LEXIS 17359).