Mealey's Emerging Insurance Disputes

  • April 29, 2021

    State Farm Moves To Compel Arbitration, Stay Relators’ False Claims Act Suit

    GULFPORT, Miss. — State Farm Fire and Casualty Co. on April 13 moved to compel arbitration of claims under the False Claims Act (FCA) and stay all proceedings in relators’ 15-year-old qui tam suit accusing the insurer of filing false flood insurance claims after Hurricane Katrina.

  • April 28, 2021

    Panel: ‘Exterior Work Over 2 Stories’ Exclusion Does Not Bar Coverage For Injury

    NEW YORK — A New York appeals court on April 27 affirmed a lower court’s ruling that an excess insurer has a duty to defend against an underlying lawsuit arising from a worker injury at a construction project, rejecting the insurer’s reliance on the policy exclusion for “exterior work over [two] stories.”

  • April 27, 2021

    Insurers Jointly Move For Summary Judgment In Dispute With Private Equity Firms

    WILMINGTON, Del. — Insureds on April 14 jointly moved for summary judgment on common issues in their coverage dispute with private equity firm insureds following a Delaware judge’s ruling that the insureds’ $120 million settlement with the bankruptcy estate of a retail fashion holding company that they acquired is insurable under state law.

  • April 27, 2021

    Breach Of Contract, Fraud Claims To Proceed Against Long-Term Care Insurer

    CHICAGO — An Illinois federal judge on April 26 determined that an insured’s breach of contract, fraud and fraudulent omission claims alleged against a long-term care insurer arising out of the insurer’s allegedly inconsistent premium increases can proceed; however, the judge said the insured’s bad faith and deceptive business practices claims must be dismissed.

  • April 27, 2021

    Panel Reverses $2.8M Damages Award In ‘Atypical’ Coverage Suit That ‘Breaks The Mold’

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on April 26 reversed and remanded a lower court’s $2,846,049.34 extracontractual damages award under Section 155 of the Illinois Insurance Code against an insurer in a coverage dispute arising from underlying trade dress infringement claims that were brought against the insured nine years ago, further denying the insured’s motion to impose sanctions against the insurer for its third appeal.

  • April 27, 2021

    Abstention Of Professional Liability Dispute Is Warranted, Federal Judge Rules

    MIAMI — Finding that abstention is warranted under the factors in Ameritas Variable Life Ins. Co. v. Roach, a federal judge in Florida on April 22 dismissed without prejudice an insurer’s declaratory judgment lawsuit disputing professional liability coverage for an underlying medical malpractice claim.

  • April 26, 2021

    Judge: Time Element Clause Does Not Allow Independent Coverage For COVID-19 Losses

    NEW ORLEANS — A federal judge in Louisiana on April 23 granted a businesowners insurer’s motion for judgment on the pleadings in insureds’ lawsuit seeking coverage for their alleged losses prompted by the coronavirus pandemic, finding that the policy’s time element clause does not permit independent coverage for the insureds’ losses that are otherwise barred by the virus exclusion.

  • April 26, 2021

    Dentist: Insurance Industry Admitted Nearly Identical Policies Covered Viruses

    CHICAGO — A dental provider insured on April 6 asked the Seventh Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that it failed to allege a “direct physical loss” to trigger coverage for its financial losses as a result of the novel coronavirus closure orders, arguing that, in response to the SARS virus, “the greater insurance industry has admitted, over a decade ago, that nearly identical policies did cover viruses.”

  • April 26, 2021

    N.Y. Justice:  Owners Fail To Allege Direct Physical Loss Or Damage To Hotels

    SYRACUSE, N.Y. — A New York justice on April 13 granted an insurer’s motion to dismiss a breach of contract lawsuit seeking coverage for losses arising from the coronavirus pandemic, finding that the hotel owners fail to allege any direct physical loss or damage to their premises to trigger coverage under the business interruption, ingress/egress, civil and military authority and rental insurance policy provisions.

  • April 23, 2021

    Insurer Asks Federal Court To Dismiss Philadelphia Eagles’ COVID-19 Coverage Suit

    PHILADELPHIA — A property insurer on April 22 asked the U.S. District Court for the Eastern District of Pennsylvania to dismiss a lawsuit brought by the owner and operator of the Philadelphia Eagles football organization seeking a declaration as to coverage for its alleged losses arising from the coronavirus pandemic, contending that many recent decisions in the District Court and across the country have rejected similar complaints on several grounds that are applicable here.

  • April 22, 2021

    Florida Panel Refuses To Review Trial Court’s Denial Of Insurers’ Motion To Dismiss

    MIAMI — The Third District Florida Court of Appeal on April 21 denied insurers’ petition for writ of certiorari in a breach of contract and bad faith suit filed by an insured seeking coverage for losses sustained as a result of the government-mandated closures in wake of the COVID-19 pandemic after determining that the insurers did not suffer irreparable harm that warrants review.

  • April 21, 2021

    ‘Information Laws’ Exclusion Bars All Claims In Fax Ads Suit, 7th Circuit Affirms

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on April 20 affirmed a lower federal court’s ruling that an insurer has no duty to defend or indemnify against an underlying class action alleging that the insured violated the Telephone Consumer Protection Act (TCPA) because the policy’s “Information Laws” exclusion bars coverage.

  • April 21, 2021

    E&O Coverage Suit Stayed Following Liquidation Order Against Excess Insurer

    KANSAS CITY, Kan. — A federal magistrate judge in Kansas on April 7 granted Blue Cross Blue Shield of Kansas Inc.’s motion to stay a consolidated lawsuit brought by primary and excess managed care organization errors and omissions insurers disputing coverage for underlying antitrust class actions after a Pennsylvania court granted the state’s insurance commissioner’s liquidation order against the excess insurer.

  • April 20, 2021

    Insurer: Employer’s Liability Exclusion Bars Coverage For Suit Against Subcontractor

    RICHMOND, Va. — A businessowners insurer recently asked the Fourth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that it has a duty to defend and indemnify its roofing subcontractor insured against an underlying lawsuit arising from a fatal construction site accident, arguing that the policy’s employer’s liability exclusion bars coverage.

  • April 19, 2021

    Louisiana Panel Reverses Dismissal Of Professional Malpractice Claim In Flood Suit

    BATON ROUGE, La. — A Louisiana appeals panel on April 16 affirmed a lower court’s partial summary judgment in favor of a homeowners insurer, reversed a lower court’s judgment that dismissed a professional malpractice claim against an insurance agent and remanded the insured’s lawsuit arising from flood damage for further proceedings.

  • April 19, 2021

    Panel Affirms Denial Of Class Certification In Suit Over Diminished Value Damages

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on April 14 held that because a lower court did not abuse its discretion in determining that insureds failed to demonstrate predominance, it follows that the court did not abuse its discretion in denying the insureds’ motion to certify a class of Washington insureds who allegedly suffered diminished value damages that were purportedly covered under their underinsured motorist insurance policies that were issued by State Farm Mutual Automobile Insurance Co.

  • April 19, 2021

    U.S. High Court Refuses To Review Life Insurer’s Petition Challenging Class Certification

    WASHINGTON, D.C. — The U.S. Supreme Court on April 19 denied a life insurer’s petition for writ of certiorari that argued that an Eighth Circuit U.S. Court of Appeals’ opinion deepened circuit conflicts as to whether class certification is proper when some members benefit from the same conduct that purportedly harms others and whether courts can certify a “fail-safe” class that defines membership by referring to success on the merits.

  • April 19, 2021

    Insured Casino Failed To Show Coverage Owed For COVID-19 Losses

    UTICA, N.Y. — A New York federal judge on April 15 determined that no coverage is afforded for a casino’s business interruption losses sustained as a result of the shutdown of the casino in response to the COVID-19 pandemic because the insured casino failed to prove that the policy’s communicable disease provision affords coverage and that the policy’s contamination exclusion does not apply as a bar to coverage.

  • April 16, 2021

    Panel: D&O Insurer Has No Duty To Defend, Indemnify Against Attorney General’s Suit

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 15 affirmed a lower federal court’s ruling that held that under California Insurance Code Section 533.5, a directors and officers liability insurer has no duty to defend or indemnify its insureds against an underlying unfair competition and false advertising lawsuit brought by the California attorney general, finding that Section 533.5 “does not facially violate a party’s due process right to retain counsel.”

  • April 16, 2021

    Texas Panel Reverses Summary Judgment Ruling As To Fraudulent Inducement Claim

    CORPUS CHRISTI, Texas — A Texas appeals panel on April 15 reversed a lower court’s ruling as to insureds’ fraudulent inducement claim against an insurance agent in a coverage dispute arising from storm damage, finding that even though there was no evidence that the agent breached its contract or owed a fiduciary duty to the insureds, there is more than a scintilla of evidence supporting a finding that it had a duty to disclose the lack of a forum-selection clause in the policy.