Mealey's Emerging Insurance Disputes

  • March 23, 2021

    Outback Steakhouse’s Franchisee Fails To Allege Direct Physical Loss Or Damage

    SAN FRANCISCO — A federal magistrate judge in California on March 19 granted an insurer’s motion for judgment on the pleadings in a coronavirus coverage dispute, finding that a franchisee of Outback Steakhouse restaurants in Arizona, Colorado, Nevada, New Mexico and California and its parent and affiliated companies have failed to plausibly allege “direct physical loss of or damage to” their property to trigger coverage under the policy.

  • March 23, 2021

    9th Circuit:  Order Remanding Coverage Suit Was Not Based On ‘Colorable’ Ground

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 22 vacated a lower federal court’s sua sponte order remanding the Academy of Country Music’s breach of contract and bad faith lawsuit against its insurer to state court, directing the lower court to recall the remand and notify the state court that it is resuming jurisdiction over the coverage dispute.

  • March 23, 2021

    Insured: Court Ignored Binding Authority, Putative Class’s Reasonable Expectations

    PASADENA, Calif. — An insured in a Feb. 25 brief asks the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of its putative class action seeking coverage for class members’ “substantial financial losses” resulting from the coronavirus and the subsequent civil authority orders, arguing that pursuant to California’s rules of policy interpretation, the lower court had a duty to adopt the insured’s reasonable interpretation of the phrase “direct physical loss of or damage to property."

  • March 22, 2021

    Panel: KSU Did Not Satisfy Professional Liability Policy’s Reporting Requirements

    FRANKFORT, Ky.—Ruling on a matter of first impression, a Kentucky appeals panel on March 19 held that a lower court erred in finding that Kentucky State University (KSU) is entitled to professional liability insurance coverage for underlying wrongful discharge and intentional infliction of emotional distress claims brought by former employees because the insured provided notice of the claim three days late and the notice-prejudice rule does not apply.

  • March 22, 2021

    3rd Circuit Affirms No CGL Coverage Owed To Philadelphia Business Owner

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on March 18 affirmed a lower court’s summary judgment ruling in favor of a commercial general liability insurer, rejecting a Philadelphia building owner insured’s argument that an underlying abuse-of-process claim alleges facts that constitute a malicious prosecution claim that triggers coverage under the policy.

  • March 22, 2021

    Judge Grants Insurer’s Motion For Judgment On The Pleadings In Coronavirus Suit

    JOHNSTOWN, Pa. — A federal judge in Pennsylvania on March 18 granted an insurer’s motion for judgment on the pleadings in a hospital insured’s class action lawsuit seeking declaratory and injunctive relief as to coverage for its losses caused by the coronavirus and the subsequent governmental orders, finding that the insured failed to establish an initial right to coverage and the policy’s virus exclusion further bars recovery.

  • March 22, 2021

    Insurer: Quadriplegic Woman And Husband’s Appeal Mooted By Arbitral Award

    ATLANTA — An insurer on March 17 filed a reply urging the 11th Circuit U.S. Court of Appeals to dismiss as moot an appeal brought by a quadriplegic woman and her husband challenging a trial court’s denial of their motion to intervene in a lawsuit in which the operators of a tourist attraction where she was injured sought to halt arbitration, writing that because a Hong Kong tribunal recently found that the woman’s injury is not covered under the policy, the 11th Circuit can no longer provide any relief.

  • March 19, 2021

    Indiana High Court Partly Reverses Ruling In Ransomware Attack Coverage Suit

    INDIANAPOLIS — The Indiana Supreme Court on March 18 held that although an insured’s losses from a ransomware attack resulted directly from the use of a computer, neither the insured nor its insurer is entitled to summary judgment, reversing the lower court’s grant of summary judgment in favor of the insurer, affirming the lower court’s denial of the insured’s motion for summary judgment and remanding for further proceedings.

  • March 19, 2021

    Federal Judge Dismisses Franchise Owners’ $41M Coronavirus Coverage Suit

    NEWARK, N.J. — A federal judge in New Jersey on March 17 granted an insurer’s motion to dismiss a breach of contract lawsuit brought by the owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton, finding that the insureds’ “general statements that the COVID-19 virus was on surfaces and in the air at their properties is insufficient to show property loss or damage.”

  • March 18, 2021

    2nd Circuit Affirms Ruling Against Insurer In Its Suit Against New York School

    NEW YORK — The Second Circuit U.S. Court of Appeals on March 18 affirmed a lower federal court’s summary judgment ruling in favor of a New York school and underlying claimants in an insurer’s lawsuit disputing general liability coverage for an action over a pedestrian who was struck and severely injured by a school bus carrying students to the insured’s school.

  • March 17, 2021

    Insurers Seek Dismissal Of Health Care Provider’s $1.25B Coronavirus Coverage Suit

    NEW YORK — Two commercial property insurers on March 11 asked a New York federal court to dismiss Northwell Health Inc.’s breach of contract and bad faith lawsuit seeking $1.25 billion in coverage for its property and business interruption losses and decontamination costs arising out of the coronavirus pandemic, arguing that the purported presence of the COVID-19 virus in the insured’s facilities did not cause any physical damage to its property and did not cause it to treat a less profitable mix of patients (Northwell Health, Inc. v. Lexington Insurance Company, et al., No. 21-01104, S.D. N.Y.).

  • March 17, 2021

    Delaware Judge Denies Insurers’ Request For Interlocutory Appeal Of Verizon Suit

    WILMINGTON, Del. — A Delaware judge on March 16 denied insurers’ application for certification of interlocutory appeal of a Feb. 23 ruling that Verizon Communications Inc. can recoup approximately $24 million in defense costs it incurred in defending against an underlying fraudulent conveyance lawsuit that settled for $95 million and that the insurers failed to demonstrate that coverage is unavailable under Verizon’s tower policies as a matter of law.

  • March 17, 2021

    Roundup Of Latest Complaints, Briefs Over Coronavirus Coverage

    From the owner and operator of Seattle’s iconic Space Needle’s coverage complaint to an insurer’s plea to the Third Circuit U.S. Court of Appeals to reverse a lower court’s abstention order, Mealey Publications takes a look at the latest pleadings relating to insurance coverage for COVID-19.

  • March 16, 2021

    Insurer Asks 11th Circuit To Not Consolidate 3 Appeals In COVID-19 Coverage Suits

    ATLANTA — An insurer in a March 12 response asks the 11th Circuit U.S. Court of Appeals to reject an insured’s motion to consolidate its appeal of a lower court’s dismissal of its lawsuit seeking coverage for its business losses arising from the coronavirus pandemic with two related appeals for oral argument, contending that “consolidation would prejudice the parties by risking confusion of the unique and complex factual and legal issues in each case.”

  • March 16, 2021

    Federal Judge Allows Sex Trafficking Coverage Suit To Proceed But Stays Discovery

    ATLANTA — A federal judge in Georgia on March 15 refused to dismiss an insurer’s lawsuit seeking to rescind a liability insurance policy and a declaration that it has no duty to defend or indemnity the owner, operator and franchisors of a Marietta, Ga., hotel against underlying sex trafficking claims but stayed discovery to see how prosecution of the underlying action proceeds.

  • March 15, 2021

    Nevada Majority: Insurer Has Right To Recoup Costs For Defending Uncovered Claims

    LAS VEGAS — Answering a certified question from the Ninth Circuit U.S. Court of Appeals in the affirmative, a majority of the Nevada Supreme Court on March 11 found that an insurer is entitled to reimbursement of already expended defense costs where a determination has been made that it has no duty to defend and expressly reserved its right to seek reimbursement in writing after a defense was tendered but where the policy included no reservation of rights.

  • March 15, 2021

    Owner Of Iconic Seattle Space Needle Files COVID-19 Coverage Suit In Federal Court

    SEATTLE — The owner and operator of the Space Needle in Seattle on March 12 sued its insurer for breach of a contract and declaratory judgment in a federal court in Washington, seeking to recoup the “millions of dollars in revenues” it lost when its busines was interrupted because of the coronavirus pandemic.

  • March 15, 2021

    Insurer Has No Duty To Defend TCPA, FDCPA Claims, 7th Circuit Affirms

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on March 12 affirmed a lower federal court’s ruling that an insurer has no duty to defend against underlying claims that the insured violated the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA).

  • March 15, 2021

    Virus Exclusions Bar Coverage For Losses Sustained As A Result Of Coronavirus

    CAMDEN, N.J. — No coverage is owed to insured restaurant and food service operators for business losses caused by the shutdown orders issued in the wake of the COVID-19 pandemic because the virus exclusions in the applicable property insurance policies unambiguously bar coverage for any losses caused by any virus, a New Jersey federal judge said March 12 in granting the insurers’ motion to dismiss.

  • March 12, 2021

    Indiana Majority Denies NCAA’s Petition To Transfer No Coverage Ruling

    INDIANAPOLIS — A majority of the Indiana Supreme Court on March 11 denied the National Collegiate Athletic Association’s (NCAA) appeal of a lower court’s ruling that an insurance policy’s “Related Wrongful Acts” exclusion precludes coverage for an underlying lawsuit alleging antitrust violations merits oral argument.