Mealey's Emerging Insurance Disputes

  • May 01, 2020

    Insurer Says Additional Reimbursement For Adult Film Suit Is Warranted

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals should reverse a district court’s ruling that an insurer is not entitled to reimbursement of more than $150,000 incurred to settle an underlying lawsuit filed against an insured commercial landlord by actors who allege that they contracted the human immunodeficiency virus (HIV) in the course of filming sexual activity at the insured’s premises because the insurer satisfied the necessary obligations to seek reimbursement, the insurer says in an April 13 response brief (Atain Specialty Insurance Company Inc. v. Armory Studios LLC, et al., Nos. 19-15745 and 19-15820, 9th Cir.).

  • May 01, 2020

    Federal Judge: Umbrella Insurer Has No Duty To Defend, Indemnify DISH Network

    DENVER — A federal judge in Colorado on April 17 found that a commercial umbrella insurer has no duty to defend or indemnify DISH Network LLC against an underlying lawsuit in which the U.S. government and four states alleged that the insured committed illegal telemarketing practices in violation of the Telemarketing Sales Rule (TSR), the Telephone Consumer Protection Act (TCPA) and similar state statutes and regulations (National Union Fire Insurance Company of Pittsburgh v. DISH Network, L.L.C., No. 15-01053, D. Colo., 2020 U.S. Dist. LEXIS 71993).

  • May 01, 2020

    Insurer Denied Business Interruption Losses Without ‘Reasonable Investigation’

    CHICAGO —A dental services provider insured filed suit in a federal court in Illinois on April 6, alleging that its insurer committed breach of contract and acted in bad faith in denying its business interruption claims arising from the state-ordered closure of its business due to the novel coronavirus “within a very short period of receiving” the claims and “without first conducting any meaningful coverage investigation, let alone a ‘reasonable investigation based on all available information’ as required under Illinois law” (Sandy Point Dental PC v. The Cincinnati Insurance Company, et al., No. 20-2160, N.D. Ill., N.D. Ill., Eastern Div.).

  • April 27, 2020

    COMMENTARY: Mitigation – The Forgotten Coverage Defense

    By C. Scott Rybny

  • May 01, 2020

    Judge:  No Potential Conflict Between CGL Coverage Suit, Underlying Sexual Abuse Suit

    SACRAMENTO, Calif. — Refusing to stay a commercial general liability insurer’s declaratory judgment lawsuit, a federal judge in California held April 29 that there is no potential conflict between the coverage action and the underlying sexual abuse lawsuit for which the insurer is disputing coverage (Northland Insurance Company v. Gymstars Gymnastics, Inc, et al., No. 19-1015, E.D. Calif., 2020 U.S. Dist. LEXIS 75600).

  • May 01, 2020

    Unintentional Conduct Triggers Duty To Defend, Pennsylvania Majority Affirms

    HARRISBURG, Pa. — A majority of the Pennsylvania Supreme Court on April 22 held that an insured’s unintentional conduct alleged in an underlying personal injury lawsuit triggers a homeowners insurer’s to defend, affirming a Pennsylvania Superior Court’s order that reversed and remanded a lower court’s ruling in favor of the insurer (Erie Insurance Exchange v. Tracy L. Moore, et al., No. 20 WAP 2018, Pa. Sup., 2020 Pa. LEXIS 2239).

  • April 30, 2020

    Coronavirus Would Not Be Naturally Included As ‘Pollutant,’ Insured Argues

    LOS ANGELES — A global Jewish human rights organization and its two-time Academy Award-winning film division on April 29 sued their insurer in a California federal court, seeking a declaration that Los Angeles Mayor Eric Garcetti’s March 19 “Safer at Home Emergency Order” triggers business interruption coverage because their all-risk insurance policy does not include an exclusion for a virus or global pandemic (Simon Wiesenthal Center, Inc., et al. v. Chubb Group of Insurance Companies/Federal Insurance Company, No. 20-03890, C.D. Calif.).   

  • April 30, 2020

    Retailer Files Coronavirus Class Suit Seeking Business Income, Extra Expense Coverage

    SAN DIEGO — A California retailer on April 28 brought a federal class action against its insurer, alleging breach of contract and seeking a declaration that business interruption losses incurred by compliance with civil authority orders in response to the novel coronavirus pandemic triggered business income, civil authority and extra expense coverage under the national class and California subclasses’ all-risk commercial property insurance policies (Pigment Inc. v. The Hartford Financial Services Group, Inc., et al., No. 20-00794, C.D. Calif.).

  • April 30, 2020

    No Coverage Owed For Replacement Of Recalled, Defective Bulbs, Federal Judge Rules

    NEW YORK — A federal judge in New York on April 28 held that an insured’s underlying claim seeking coverage for its losses arising from its replacement of defective, recalled light bulbs is not covered under an insurance policy, granting the insurer’s motion for summary judgment on the insured’s claims for breach of contract, agency liability, bad faith and estoppel (Green Technology Lighting Corp. v. Liberty Surplus Insurance Corporation, et al., No. 18-01799, S.D. N.Y., 2020 U.S. Dist. LEXIS 74740).

  • April 29, 2020

    Insurer:  Exclusions Bar Coverage For NRA’s Suit Against Former Advertising Agency

    DALLAS — An insurer on April 27 filed suit in a federal court in Texas, seeking a declaration that it has no duty to defend its advertising agency and communications firm insured and its officers against an underlying lawsuit in which the National Rifle Association of America asserts that the insured “exploited decades of trust and confidence in order to siphon assets from the NRA” (RSUI Indemnity Company v. Ackerman McQueen, Inc., et al., No. 20-01048, N.D. Texas).

  • April 29, 2020

    Judge Refuses To Stay Employers Liability Coverage Suit Over Fireworks Explosion

    KANSAS CITY, Kan. — A federal judge in Kansas on April 27 refused to stay a commercial general liability insurer’s declaratory judgment action disputing coverage for an underlying bodily injury lawsuit brought against the insured, finding that the balance of the five factors in State Farm Fire & Cas. Co. v. Mhoon weigh against staying the declaratory judgment lawsuit pending resolution of the underlying action (Everest Indemnity Insurance Company v. Jake's Fireworks, Inc., et al., No. 19-2620, D. Kan., 2020 U.S. Dist. LEXIS 73234).

  • April 27, 2020

    Florida Is Best Forum For COVID-19 Business Interruption Suits, Insured Tells JPMDL

    WASHINGTON, D.C. — A restaurant insured on April 24 filed a response in partial support of two motions asking the U.S. Judicial Panel on Multidistrict Litigation to coordinate current and tag-along lawsuits seeking business interruption coverage for losses arising from governmental closure orders prompted by the coronavirus pandemic, arguing, however, that the U.S. District Court of the Southern District of Florida is a better forum than the previously proposed Eastern District of Pennsylvania or the Northern District of Illinois (In re: COVID-19 Business Interruption Insurance Coverage Litigation, No. 2942, JPMDL).

  • April 24, 2020

    New York Justice Refuses To Dismiss Suit Against Professional Liability Insurer

    NEW YORK — A New York justice on April 13 denied a health care organization professional general liability insurer’s motion to dismiss a nursing facility insured’s breach of contract lawsuit seeking coverage for an underlying negligence and wrongful death lawsuit but dismissed the insured’s long-term care facilities liability insurer from the lawsuit (WMOP, LLC, et al. v. Scottsdale Insurance Company, et al., No. 655953/2018, N.Y. Sup., New York Co., 2020 N.Y. Misc. LEXIS 1510).

  • April 24, 2020

    New York Court Dismisses Insurer’s Malpractice Suit Against Law Firm

    NEW YORK — A New York appeals court on April 23 dismissed an insurer’s legal malpractice and breach of contract lawsuit against a law firm, reversing a trial court’s denial of dismissal of the suit (Lloyd's Syndicate 2987, et al. v. Furman Kornfeld & Brennan, LLP, et al., No. 11403 160612/18, N.Y. Sup., App. Div., 1st Dept., 2020 N.Y. App. Div. LEXIS 2457).

  • April 24, 2020

    Judge Allows Parties To Submit Limited Briefing In Coverage Suit Over Tower Damage

    SEATTLE — Although “scrapping the parties' prior briefing entirely is unwarranted and is not in the interest of judicial economy,” a federal judge in Washington on April 22 allowed an insurer and an additional insured to submit limited briefing on the impact of the Ninth Circuit U.S. Court of Appeals’ Dec. 9, 2019, ruling that reversed and remanded a lower federal court’s ruling in favor of the insurer, as well as on the parties' understanding of the remaining issues to be adjudicated as raised by their cross-motions for summary judgment and any additional arguments not raised in their motions (T-Mobile USA Inc. v. Selective Insurance Company of America, No. 15-1739, W.D. Wash., 2020 U.S. Dist. LEXIS 71171).

  • April 23, 2020

    Insured Sues All-Risk Insurer, Los Angeles Mayor In Coronavirus Coverage Dispute

    LOS ANGELES — An insured that owns, operates and/or manages a small commercial business center in La Canada Flintridge, Calif., filed suit in a California court on April 9, seeking a declaration that a March 15 order by the mayor of Los Angeles constitutes a prohibition of access to its premises and that any current and future civil authority closures of commercial buildings in the state due to physical loss or damage from the coronavirus are covered under its all-risk insurance policy’s civil authority coverage section (837 Foothill Blvd., LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20STCV13929, Calif. Super., Los Angeles Co.).

  • April 23, 2020

    Panel:  Claims In ERISA Class Actions Are Related; Excess Insurer Owes Defense

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on April 22 affirmed a lower federal court’s finding that a second-tier excess insurer under a 2006 tower of insurance has a duty to defend claims that a defense contractor insured breached its fiduciary duty under the Employee Retirement Income Security Act (ERISA), finding that each of the wrongful acts alleged in one class action related “both causally and logically” to the wrongful acts asserted in a class action that was filed 10 years prior (Northrop Grumman Corporation v. Axis Reinsurance Company, et al., No. 19-1949, 3rd Cir., 2020 U.S. App. LEXIS 12903).

  • April 23, 2020

    Insured Files Coronavirus Suit On Behalf Of Nationwide Class, New Jersey Subclass

    NEWARK, N.J. — A New Jersey restaurant on April 20 filed a declaratory judgment and breach of contract lawsuit on behalf of a nationwide class and New Jersey subclass, alleging that Chubb Ltd. has “wrongfully and illegally refused to provide coverage” for business income losses and other covered expenses related to the novel coronavirus (Truhaven Enterprises, Inc. v. Chubb Ltd, et al., No. 20-4586, D. N.J.).

  • April 22, 2020

    Insurer:  Insured Did Not Purchase Insurance For Claimed Loss Caused By Coronavirus

    LOS ANGELES — A business owners insurer on April 20 filed suit in a federal court in California, seeking a declaration that the presence or suspected presence of the novel coronavirus does not constitute “direct physical loss or damage” to trigger coverage for the insured’s claimed loss of income (Travelers Casualty Insurance Company of America v. Geragos & Geragos, No. 20-03619, C.D. Calif.).

  • April 22, 2020

    Sports Bar Responds To 2nd Order To Show Cause In Coronavirus Coverage Suit

    TAMPA, Fla. — A sports bar insured on April 21 responded to a Florida federal judge’s second order to show cause as to why its amended complaint against its commercial property insurer seeking coverage for its losses arising from the “COVID-19 governmental suspension of business operations” should not be dismissed for lack of diversity jurisdiction under 28 U.S. Code Section 1332(a)(1), 28 U.S.C. § 1332(a)(1), arguing that it “is not only what is owed under the contract, but what might be . . . owed under the policy” (Prime Time Sports Grill, Inc. v. DTW 1991 Underwriting Limited, No. 20-00771, M.D. Fla.).