Mealey's Emerging Insurance Disputes

  • August 23, 2019

    No Coverage Owed For Defamation Suit Against Attorney, Federal Judge Says

    GRAND RAPIDS, Mich. — Granting a business owners insurer’s motion for summary judgment, a federal judge in Michigan on Aug. 9 held that a policy endorsement “unambiguously excises ‘personal and advertising injury’ from the policy” (Allstate Insurance Company v. Bryan Punturo, et al., No. 18-326, W.D. Mich., Southern Div., 2019 U.S. Dist. LEXIS 134842).

  • August 21, 2019

    Insurers: Hurricane Maria Damages Were Not Caused By Peril Other Than Windstorm

    ST. CROIX, Virgin Islands — Two commercial property insurers on Aug. 16 filed a declaratory judgment lawsuit against their shopping mall insured in a federal court in the Virgin Islands, alleging that the insured has failed to establish that its more than $12.4 million in alleged Hurricane Maria damage was caused by covered perils that are not subject to the policies’ $3.25 million windstorm limit (Great Lakes Insurance S.E., et al. v. Sunshine Shopping Center, Inc., No. 19-00039, D. Virgin Islands).

  • August 21, 2019

    10th Circuit Affirms No Coverage For Uber Driver’s Injuries On Return Journey

    DENVER — The 10th Circuit U.S. Court of Appeals on Aug. 20 affirmed a lower federal court’s ruling that two business auto coverage insurance policies do not provide coverage for the accident injuries sustained by a ride-share driver during her return journey from completing her fare (Bonni J. Genzer v. James River Insurance Company, No. 18-6105, 10th Cir., 2019 U.S. App. LEXIS 24732).

  • August 20, 2019

    9th Circuit Affirms Dismissal Of UCL Claim Against Insurer

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 16 found that an insurer’s purported statements and conduct in denying an insured’s claim were not fraudulent or unfair under California's unfair competition law (UCL), affirming a lower court’s dismissal of an insured’s lawsuit without leave to amend (Deborah Quattrocchi, v. Allstate Indemnity Company, No. 18-15208, 9th Cir., 2019 U.S. App. LEXIS 24514).

  • August 20, 2019

    Panel Affirms Ruling In Insurer’s Favor In Suit Brought By Company’s Directors

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Aug. 16 affirmed a lower court’s summary judgment ruling in favor of a directors and officers liability insurer in a coverage lawsuit arising from underlying claims that an energy company’s subsidiary breached a finance agreement and contractual warranties, finding that the lower court properly held that the insured’s directors did not satisfy their burden of proving an allocation of the underlying costs that was different from the one proposed by the insurer (John Brand, et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 18-1372, 8th Cir., 2019 U.S. App. LEXIS 24488).

  • August 19, 2019

    Insured, Assignee Ask 9th Circuit To Reverse Dismissal Of Bad Faith Insurance Suit

    PASADENA, Calif. — An insured and his assignee, who were involved in a motor vehicle accident, recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of their bad faith lawsuit against the insured’s personal automobile insurer, arguing that the insurer “unreasonably rejected” the assignee’s $100,000 policy limits settlement offer by failing to comply with the terms of the offer (Ethan Volungis, et al v. Liberty Mutual Fire Insurance, No. 18-16600, 9th Cir.).

  • August 19, 2019

    Insurer Asks Florida High Court To Find That It Has Standing To Sue Counsel

    TALLAHASSEE, Fla. — After a Florida appeals court certified a question of “great public importance” to the Florida Supreme Court, an insurer recently told the Florida high court that it has standing to maintain a malpractice lawsuit against counsel who was hired to represent its insured where it has a duty to defend (Arch Insurance Company v. Kubicki Draper LLP, No. 19-673, Fla. Sup.).

  • August 16, 2019

    Panel Certifies Question To Arizona High Court In Suit Over Backdating Litigation

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Aug. 15 certified a question to the Arizona Supreme Court in a dispute over whether an insurer was obligated to fund a settlement reached in underlying backdating litigation, staying the lawsuit until the question is answered (Apollo Education Group, Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa, No. 17-17293, 9th Cir., 2019 U.S. App. LEXIS 24300).

  • August 14, 2019

    Vermont High Court:  Claims Failed To Trigger Errors And Omissions Liability Coverage

    MONTPELIER, Vt. — The Vermont Supreme Court on Aug. 9 affirmed a lower court’s ruling that a vendor’s underlying lawsuit alleging that an engineering and project-management firm breached its commission and teaming agreements did not trigger an insurance policy’s errors and omissions liability coverage (Integrated Technologies, Inc. v. Crum & Forster Specialty Insurance Company, No. 18-262, Vermont Sup., 2019 Vt. LEXIS 105).

  • August 14, 2019

    Majority Affirms Ruling In Favor Of Excess Directors, Officers Liability Insurer

    SAN FRANCISCO — A majority of a Ninth Circuit U.S. Court of Appeals panel on Aug. 12 affirmed a lower court’s summary judgment ruling in favor of a first-level excess directors and officers liability insurer on a software company insured’s breach of contract and bad faith claims, finding that the insured was not liable for any portion of an underlying settlement and the insured’s alleged breach was not the proximate cause of the insured’s purported damages (Genesis Insurance Co. v. National Union Fire Insurance Company of Pittsburgh, Pa., et al., No. 17-17362, 9th Cir., 2019 U.S. App. LEXIS 23956).

  • August 13, 2019

    Judge Awards Law Firm Attorney Fees In Professional Liability Coverage Dispute

    LOS ANGELES — A federal judge in California on Aug. 1 awarded Dickstein Shapiro $346,697.50 in reasonable attorney fees in a dispute over professional liability coverage for an underlying $17.5 million settlement of a malpractice lawsuit brought against one of the law firm’s former partners and denied an excess insurer’s motion for reconsideration of a previous ruling as to coverage allocation (Scottsdale Insurance Company v. Dickstein Shapiro LLP, et al., No. 18- 02893, C.D. Calif., 2019 U.S. Dist. LEXIS 133045).

  • August 13, 2019

    Panel Reverses Attorney Fees Awarded To Insured For Insurer’s Removal Of Suit

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on Aug. 12 reversed and remanded a lower federal court’s award of attorney fees to an insured for the insurer’s removal of its class action lawsuit challenging the insurer's practices involving personal injury protection (PIP) coverage,finding that the lower court did not find the insurer’s arguments for removal “objectively unreasonable” (Stan Schiff v. Liberty Mutual Fire Insurance Co., et al., No. 18-35116, 9th Cir., 2019 U.S. App. LEXIS 23955).

  • August 13, 2019

    Excess Insurer Did Not Control Insured’s Defense, 8th Circuit Says In Reversal

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Aug. 12 reversed and remanded a lower court’s summary judgment ruling in favor of a child care facility operator insured in an excess insurer’s lawsuit disputing coverage for an underlying $6,032,585 jury award that exhausted the primary insurer's policy limits, finding that the excess insurer did not control the underlying defense and must be given an opportunity to establish that the jury award included damages for noncovered and covered claims (RSUI Indemnity Company v. New Horizon Kids Quest, Inc., No. 17-3567, 8th Cir., 2019 U.S. App. LEXIS 23943).

  • August 13, 2019

    Insurer, Massage Therapist Settle Coverage Suit Over Inappropriate Sexual Acts

    LAS VEGAS — An insurer and its massage therapist insured announced Aug. 5 that they reached a settlement “globally resolving” the insured’s breach of contract, bad faith and declaratory judgment coverage lawsuit arising from underlying allegations that he engaged in inappropriate sexual acts while he was performing a massage (Limmie Young, III, et al. v. Starr Indemnity & Liability Company, No. 14-00239, D. Nev.).

  • August 13, 2019

    Insured ‘Incurred Exorbitant Attorneys' Fees At Its Own Risk,’ Federal Judge Says

    SALT LAKE CITY — A federal judge in Utah on Aug. 1 determined that a business liability insurer had no duty to reimburse its law firm insured for the difference between the rates charged by the firm defending the insured against an underlying lawsuit and the rates that were approved by the insurer, denying the insured’s motion for partial summary judgment (Hartford Casualty Insurance v. Swapp Law, PLLC, et al., No. 17-01130, D. Utah, 2019 U.S. Dist. LEXIS 129664).

  • August 09, 2019

    Judge: $550,000 Judgment Covered Under Business, Management Indemnity Policy

    SEATTLE — A federal judge in Washington on Aug. 8 held that a plaintiff’s claim for double damages and attorney fees against her ex-husband’s former employer triggered coverage under a business and management indemnity policy, finding that the insurer has a duty to defend against the entire underlying $550,000 undifferentiated judgment against the employer (Susan Peder v. Scottsdale Indemnity Company, et al., No. 17-1868, W.D. Wash., 2019 U.S. Dist. LEXIS 133793).

  • August 09, 2019

    Insurer Has No Duty To Defend Against Billing Fraud Claims, Federal Judge Rules

    CHICAGO — A federal judge in Illinois on Aug. 5 held that an insurer has no duty to defend against Aetna Inc.’s claims that insureds bilked more than $21 million out of Aetna, employers and Aetna members through “an extensive health care billing fraud scheme,” finding that coverage is barred by the “interrelated wrongful acts” and “healthcare services” policy exclusions (Arch Insurance Company v. PCH Healthcare Holdings, LLC, et al., No. 18-02691, N.D. Ill., 2019 U.S. Dist. LEXIS 130681).

  • August 08, 2019

    Special Employee Theft Exclusion Bars Coverage, Federal Judge Rules

    UTICA, N.Y. — A federal judge in New York on Aug. 7 found that an insurance policy’s special employee theft exclusion bars coverage for a hotel owner insureds’ claim that their former manager’s stole more than $700,000 from them, granting the insurer’s motion for summary judgment and dismissing the breach of contract and declaratory judgment complaint in its entirety  (Albany Airport HIE, LLC, et al. v. The Hanover Insurance Group, Inc., et al., N.D. N.Y., 2019 U.S. Dist. LEXIS 132021).

  • August 08, 2019

    Suit Alleging ‘Interest Taking’ Scheme Against Insurers Is Untimely, Panel Affirms

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Aug. 7 affirmed a lower federal court’s ruling that an insured’s class action complaint alleging that life insurers participated in an “interesting taking” scheme in the 1990s is time-barred (Debe Olson v. Farmers New World Life Insurance Co., et al., No. 18- 20521, 5th Cir., 2019 U.S. App. LEXIS 23571).

  • August 08, 2019

    Employee Theft, Forgery Coverage Was Not Triggered, 8th Circuit Affirms

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Aug. 6 affirmed a lower federal court’s finding that a crime insurance policy’s “employee theft” and “forgery” coverage were not triggered by an underlying claim arising from $820,000 stolen over several years from two commercial rental property owners (C.S. McCrossan Inc. v. Federal Insurance Company, No. 18-1949, 8th Cir., 2019 U.S. App. LEXIS 23484).