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Mealey's Emerging Insurance Disputes

  • June 11, 2019

    9th Circuit Majority Finds Sexual Molestation Exclusion Bars Coverage, Reverses

    PASADENA, Calif. — A majority of the Ninth Circuit U.S. Court of Appeals on June 10 held that a sexual molestation exclusion in a renter insurance policy’s child care liability endorsement expressly excluded coverage for the operator of a small child-care facility for claims arising from acts of sexual molestation committed by her adult son “regardless of the theory for liability” (Holly Bayes v. State Farm General Insurance Company, No.  17-56035, 9th Cir.).

  • June 11, 2019

    5th Circuit Panel Refuses To Rehear Environmental Damage Coverage Dispute

    NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals on June 3 denied  a petition for rehearing filed by a company that conducted fracking operations on an insured's facility asking it to reconsider its ruling that reversed a federal court's finding that a site pollution legal liability insurer waived its subrogation rights under an onshore master services agreement (MSA) (Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir.).

  • June 10, 2019

    Panel:  Exclusion Does Not Bar Coverage For Suit Over ‘Dangerous’ Soccer Field

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on June 7 reversed a lower federal court’s finding that a policy exclusion barred coverage for an underlying lawsuit alleging personal injury and damages for the "dangerous condition” of a soccer field, finding that the terms of the exclusion are ambiguous (Oak Park Unified School District v. Philadelphia Indemnity Insurance Company, No. 18-55033, 9th Cir., 2019 U.S. App. LEXIS 17182).

  • June 5, 2019

    Assignees Fail To State Unfair Practices, Insurer Argues To Connecticut Court

    HARTFORD, Conn. — An insurer on May 28 asked a Connecticut Superior Court to grant it judgment on claims that it violated the Connecticut Unfair Insurance Practices Act (CUIPA), arguing that its insured’s assignees have failed “to plead more than a single instance of insurance misconduct involving other claims or unrelated insureds” as required to state a CUIPA claim (William Ghio v. Liberty Insurance Underwriters, Inc., No. X07-HHD-CV-19-6104759-S, Conn. Super., 2019 Conn. Super. LEXIS 849).

  • June 5, 2019

    Insured Files Notice Of Appeal Challenging Finding That Exclusion Bars Coverage

    MIAMI — An insured filed a notice in a federal court in Florida on May 29 indicating that it is appealing to the 11th Circuit U.S. Court of Appeals the lower court’s finding that an insurance policy's liquor liability exclusion bars coverage for underlying claims that a nightclub violated Florida's Dram Shop Law (AIX Specialty Insurance Company v. Members Only Management, LLC, et al., No. 18-60471, S.D. Fla.).

  • June 5, 2019

    Federal Judge Dismisses Insurer’s Third-Party Suit Against Rutgers Football Player

    TRENTON, N.J. — A day after the parties filed a stipulation of dismissal with prejudice, a New Jersey federal judge on May 29 dismissed a homeowners insurer’s third-party claims against a former Rutgers University football player in a lawsuit alleging that he and another student sexually assaulted a female student (K.L. v. Rutgers, The State University of New Jersey, et al., No. 16-9270, D. N.J.).

  • June 4, 2019

    Judge: TCPA Violations Arise Out Of ‘Invasion Of Privacy’; Coverage Barred

    WEST PALM BEACH, Fla. — A Florida federal judge on May 30 held that coverage for an underlying $60,413,112 consent judgment entered against an insured in a Telephone Consumer Protection Act (TCPA) violation dispute is barred by the insurance policy’s “invasion of privacy” exclusion, finding that the alleged TCPA violations arise ou tof an invasion of privacy (Jacob Horn, et al. v. Liberty Insurance Underwriters, Inc., No.18-80762, S.D. Fla., 2019 U.S. Dist. LEXIS 90194).

  • June 3, 2019

    Directors And Officers Liability Insurer Has No Duty To Defend, 6th Circuit Affirms

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on May 31 affirmed a lower federal court’s finding that a directors and officers liability insurer has no duty to defend its insureds against an underlying lawsuit stemming from a Federal Communications Commission waiver involving a particular maritime frequency spectrum for emergency land-based communications, finding that one insured failed to timely report the underlying lawsuit and another insured made a material misrepresentation on the insurance application (US HF Cellular Communications, LLC, et al. v. Scottsdale Insurance Co., No. 18-3653, 6th Cir., 2019 U.S. App. LEXIS 16294).

  • June 3, 2019

    Criminal Acts Exclusion Does Not Bar Coverage For Class Action, Panel Affirms

    SANTA ANA, Calif. — A California appeals panel on May 31 affirmed a lower court's finding that coverage is owed for claims that an insured violated California Penal Code Section 632 by improperly recording a private interview without her knowledge and published it to third parties,  rejecting an insurer’s argument that coverage is excluded under a commercial general liability insurance policy’s criminal acts exclusion (Nautilus Insurance Company v. Monique Mingione, No. G055914, Calif. App., 4th Dist., Div. 3, 2019 Cal. App. Unpub. LEXIS 3759).

  • May 30, 2019

    Panel Reverses, Remands For Reasonableness Hearing Of $25M Sexual Abuse Settlements

    TACOMA, Wash. — A Washington appeals panel on May 29 held that a lower court erred when it dismissed plaintiffs from a lawsuit arising from the sexual abuse of two minors at an early learning center, reversing and remanding for the lower court to hold a reasonableness hearing regarding 12 separate settlement agreements totaling $25 million (Lisa Steel, et al. v. Olympic Early Learning Center, et al., No. 50981-4-II, Wash. App., Div. 2, 2019 Wash. App. LEXIS 1343).

  • May 30, 2019

    Assault And Battery Exclusion Does Not Bar Coverage, New Jersey Panel Affirms 

    TRENTON, N.J. — A New Jersey appeals panel on May 28 affirmed a lower court’s ruling that a commercial general liability insurance policy’s assault and battery exclusion does not bar coverage for an underlying claim alleging that the insured’s negligent maintenance of the property caused an injury, further affirming the lower court’s finding that the insurer was estopped from denying coverage (C.M.S. Investment Ventures, Inc., et al. v. American European Insurance Company, et al., No. A-2056-17T3, N.J. Super., App. Div., 2019 N.J. Super. Unpub. LEXIS 1215).

  • May 30, 2019

    Panel:   Bodily Injuries Alleged During Policy Periods Are Distinct From Convictions

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 29 held that law enforcement liability policies issued to a local Mississippi government in the mid-1980s cover claims by three individuals wrongfully arrested and imprisoned in 1980 and later exonerated in 2010, finding that the estates of the wrongfully accused allege bodily injuries during the policy periods that were distinct from the wrongful convictions themselves (The Travelers Indemnity Co., et al. v. Ethel Mitchell, et al., No. 17-60291, 5th Cir., 2019 U.S. App. LEXIS 15915).

  • May 30, 2019

    Judge:  Insurer Has Duty To Defend Engineering Firm Against Negligent Design Suit

    CINCINNATI — An Ohio federal judge on May 28 held that a professional liability insurer has a duty to defend its engineering and construction firm insured against an underlying lawsuit alleging negligent design, negligent construction and breach of contract but stayed the indemnification issue pending resolution of the underlying action (Allied World Surplus Lines Insurance Company v. Richard Goettle, Inc., No. 17-670, S.D. Ohio, 2019 U.S. Dist. LEXIS 88545).

  • May 30, 2019

    Fracking Company Asks Panel To Rehear Environmental Damage Coverage Dispute

    NEW ORLEANS — A company that conducted fracking operations on an insured’s facility on May 15 filed a petition asking a panel of the Fifth Circuit U.S. Court of Appeals to reconsider its ruling that reversed a federal court's finding that a site pollution legal liability insurer waived its subrogation rights under an onshore master services agreement (MSA) (Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir.).

  • May 30, 2019

    Insured: Court Improperly Held FEMA’s Conduct Is Beyond Scope Of Judicial Oversight

    NEW ORLEANS — In a May 20 reply brief filed in the Fifth Circuit U.S. Court of Appeals, an insured argues that a lower federal court erred in ruling that the actions by the Federal Emergency Management Agency in the Superstorm Sandy claims review process are beyond the scope of judicial oversight in his quest to reverse the 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.).

  • May 29, 2019

    Off-Premises Injury Not Covered Under Policies, Florida Panel Affirms

    TALLAHASSEE, Fla. — A Florida appeals court panel on May 28 affirmed a lower court’s ruling in favor of commercial general liability insurers in their declaratory judgment lawsuit disputing coverage for personal injuries that an independent contractor incurred while drilling a water well for the insureds’ residential customer, finding that the policies did not cover well drilling operations that were unrelated to the insureds' feed store premises (Larry Musselwhite v. Florida Farm General Insurance Company, et al., No. 1D18-780, Fla. App., 1st Dist., 2019 Fla. App. LEXIS 8207).

  • May 24, 2019

    Kentucky Panel Finds Bad Faith Claim Against Insurer Was Timely, Reverses

    FRANKFORT, Ky. — A Kentucky appeals panel on May 24 reversed and remanded a lower court’s dismissal of a bad faith claim against an insurer arising from an underlying dram shop action against the insured, finding that the bad faith claim was timely (William Gerald Watson v. United States Liability Insurance Company, No. 2018-ca-000475, 2019 Ky. App. LEXIS 94).

  • May 24, 2019

    Insurer Has No Duty To Defend Pharmaceutical Company Against SEC Suit, Panel Affirms

    BOSTON — The First Circuit U.S. Court of Appeals on May 23 affirmed a lower federal court’s ruling in favor of an insurer in a pharmaceutical company insured’s breach of contract and breach of fiduciary lawsuit, finding that the insurer has no duty to defend the insured against an underlying action brought by the Securities Exchange Commission (Biochemics, Inc., et al. v. Axis Reinsurance Company, et al., No. 17-2059, 1st Cir., 2019 U.S. App. LEXIS 15326).

  • May 24, 2019

    9th Circuit: Alleged Landscaping Conduct ‘Was Entirely Intentional’; No Coverage

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 22 held that because an insured’s alleged conduct was entirely intentional in an underlying lawsuit alleging that its landscaping activities violated a conservation easement, a lower federal court properly held that the insurer has a no duty to defend the insured (Henstooth Ranch, LLC v. The Burlington Insurance Company, No. 18-15167, 9th Cir., 2019 U.S. App. LEXIS 15157).

  • May 22, 2019

    11th Circuit: Alleged Conduct Falls Outside Of Policy’s ‘Professional Services’

    ATLANTA — The 11th Circuit U.S. Court of Appeals on May 21 held that underlying claims against an insured “falls clearly outside” of a professional liability insurance policy's definition of “professional services,” affirming a lower court’s ruling in favor of the insurer (Mark Chapman, et al. v. ACE American Insurance Co., No. 18-12972, 11th Cir., 2019 U.S. App. LEXIS 15013).