Mealey's Emerging Insurance Disputes

  • May 16, 2019

    Insurer Seeks Reimbursement For Damages Caused By Engine Failure In Fracking Pump Unit

    BEAUMONT, Texas — An insurer argues in a May 13 motion for summary judgment filed in Texas federal court that it is entitled to reimbursement from the manufacturers of a fracking pump unit for more than $15 million in costs paid on behalf of its insured for damages incurred after the fracking unit malfunctioned and caused a fire at the well site (AIG Europe Ltd. v. Caterpillar Inc. and Dragon Products LLC, No. 17-319, E.D. Texas).

  • May 15, 2019

    Judge: Settlement Payments To Stockholders Constitute ‘Loss’ Under D&O Policies

    WILMINGTON, Del. — Granting in part and denying in part motions for summary judgment in a coverage dispute arising from underlying stockholders’ claims against Dole Food Co. and its directors and officers, a Delaware judge on May 7 held that underlying settlement payments constitute “loss” under excess directors and officers liability insurance policies and that there are genuine issues of material fact regarding the policies’ written consent provisions and cooperation clauses (Arch Insurance Company, et al. v. David H. Murdock, et al., No. N16C-01-104-EMD, Del. Super., New Castle Co., 2019 Del. Super. LEXIS 227).

  • May 15, 2019

    Judge Refuses To Dismiss D&O Insurers From Suit Over Government Investigation

    NEW CASTLE, Del. — A Delaware judge on April 25 denied directors and officers liability insurers’ motion to dismiss their insureds’ lawsuit seeking coverage for an underlying government investigation involving a real estate investment trust but found that the court lacks jurisdiction over another set of insurer defendants that issued Difference in Conditions policies (AR Capital LLC, et al. v. XL Specialty Insurance Company, et al., No. N19C-01-024, Del. Super., New Castle Co., 2019 Del. Super. LEXIS 216).

  • May 15, 2019

    Judge Enters Judgment In Insurer’s Favor After Finding Exclusion Bars Coverage

    MIAMI — A Florida federal judge on May 6 entered final judgment in favor of an insurer in its lawsuit disputing coverage for underlying claims that the insured violated Florida's Dram Shop Law after finding that the policy's liquor liability exclusion bars coverage (AIX Specialty Insurance Company v. Members Only Management, LLC, et al., No. 18-60471, S.D. Fla.).

  • May 14, 2019

    Depositions Ordered In Coverage Dispute Over Online Personal Material Postings

    SAN JOSE, Calif. — A company that was responsible for the online postings of a client’s personal material was ordered May 10 to mostly comply with deposition subpoenas by an insurance company involved in a coverage dispute over the matter, with a California federal magistrate judge declining to quash the subpoenas and finding most of the insurer’s requests to be relevant and proportional to the needs of the case (Pegatron Technology Service Inc. v.  American Guarantee & Liability Insurance Co., No. 5:18-cv--01477, N.D. Calif., 2019 U.S. Dist. LEXIS 79693).

  • May 13, 2019

    Federal Judge Refuses To Compel Arbitration, Finds Bad Faith Claim Premature

    MIAMI — A Florida federal judge on May 10 denied an insurer’s motion to compel arbitration and dismiss a third-party bad faith complaint against it in a lawsuit arising from an underlying injury that occurred during a cruise ship excursion, finding that the bad faith claim is premature and that the plaintiffs cannot be compelled to arbitration because there is no agreement that was signed by both the plaintiffs and the insurer (Lynn McCullough v. Royal Caribbean Cruises, Ltd., et al., No. 16-20194, S.D. Fla, 2019 U.S. Dist. LEXIS 79338).

  • May 13, 2019

    Judge Refuses To Dismiss Allstate’s Suit Disputing Coverage For Alleged Suicide

    ANCHORAGE, Alaska — An Alaska federal judge on May 7 refused to dismiss Allstate Insurance Co.’s lawsuit seeking a declaration that it has no duty to indemnify against an underlying lawsuit over the alleged suicide death of the insured’s daughter, rejecting the defendants’ argument that the federal court lacks subject matter jurisdiction (Allstate Insurance Company v. Estate of Maia Grace Elizabeth Walker, et al., No. 19-0063, D. Alaska, 2019 U.S. Dist. LEXIS 76904).

  • May 10, 2019

    Panel: Coverage Owed For Default Judgment Against Physician Who Fled Country

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on May 7 affirmed a lower federal court’s finding that a medical malpractice insurer owes coverage for a default judgment entered against a physician insured who fled the country and refused to participate in the defense of the underlying malpractice lawsuit (Claudia M. Mora, et al. v. Lancet Indemnity Risk Retention Group Inc., No. 18-1566, 4th Cir., 2019 U.S. App. LEXIS 13610).

  • May 10, 2019

    Judge: 4 Claims Relate To Facebook Posts Occurring After Insurer Canceled Policy

    CENTRAL ISLIP, N.Y. — A New York federal judge on May 8 granted in part and denied in part an insurer’s motion for summary judgment in a coverage dispute arising from underlying claims that the insured used five people’s images as part of its promotions on social media without their consent or payment, finding that coverage is barred for the claims of all but one of the underlying plaintiffs (Bullseye Restaurant, Inc., et al. v. James River Insurance Company, No. 17-2996, E.D. N.Y., 2019 U.S. Dist. LEXIS 77701).

  • May 09, 2019

    California High Court Accepts Certified Question In Yahoo’s TCPA Coverage Suit

    SAN FRANCISCO — The California Supreme Court filed an order on April 10 indicating that on March 27 it agreed to answer a certified question from the Ninth Circuit U.S. Court of Appeals in a coverage dispute between Yahoo! Inc. and its commercial general liability insurer arising from claims brought under the Telephone Consumer Protection Act (TCPA) (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. S253593, Calif. Sup., 2019 Cal. LEXIS 3004).

  • May 09, 2019

    Panel Affirms Dismissal Of Suit Alleging Insurers Violated Stored Communications Act

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 26 affirmed a lower federal court’s dismissal of complaints alleging that insurers violated the Stored Communications Act (SCA) when they gained unauthorized access to the plaintiff’s personal information from a website, finding that the plaintiffs failed to state a claim that the website, database or server functioned as an electronic communication service (ECS) provider under the SCA (Hector Casillas v. Cypress Insurance Company, et al., Nos. 17-56065 and 17-56071, 9th Cir., 2019 U.S. App. LEXIS 12583).

  • May 07, 2019

    Federal Judge: Insurer Has Duty To Defend Creamery Against Infringement Suit

    HARRISBURG, Pa. — A Pennsylvania federal judge on May 6 held that a commercial general liability insurer has a duty to defend Hershey Creamery Co. against an underlying lawsuit alleging that the ice cream manufacturer unlawfully copied a competitor’s self-serve milkshake machine and its related marketing designs, display and verbiage (Hershey Creamery Company v. Liberty Mutual Fire Insurance Co., et al., No. 18-694, M.D. Pa., 2019 U.S. Dist. LEXIS 75760).

  • May 07, 2019

    FEMA: No Waiver Of Sovereign Immunity In Superstorm Sandy Claims Review Process

    NEW YORK — The Federal Emergency Management Agency argues to the Second Circuit U.S. Court of Appeals in a May 3 brief that a lower court properly applied basic contract law and sovereign immunity principles in concluding that an insured did not have a “breach of contract” claim against it, asking the appeals court to affirm a take-nothing judgment in the insured’s 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 07, 2019

    Judge Refuses To Dismiss Insurer’s Lawsuit Disputing Coverage For Negligence Suit

    HARRISBURG, Pa. — A Pennsylvania federal judge on May 2 refused to dismiss an insurer’s lawsuit seeking a declaration that it has no duty to defend or indemnify its insured against an underlying negligence lawsuit arising from an altercation at a bar, finding that it is appropriate to exercise the court’s discretionary authority to maintain jurisdiction over this coverage dispute (Hospitality Insurance Company v. Carley's Neighborhood Bar and Grill, et al., No. 18-1090, M.D. Pa., 2019 U.S. Dist. LEXIS 74454).

  • May 06, 2019

    Federal Judge Dismisses Insurer From Flood Suit After Parties Announce Settlement

    MINNEAPOLIS — One day after a federal flood insurer and a motel operator insured announced that they settled their dispute over coverage for underlying flood damage to the insured's motel, a Minnesota federal judge on May 3 dismissed with prejudice the insurer from the lawsuit (Ma Amba Minnesota, Inc. v. Cafourek & Associates, Inc., et al., No. 18-680, D. Minn., 2019 U.S. Dist. LEXIS 73500).

  • May 02, 2019

    Judge: Plaintiffs Are Not Insureds Or Third-Party Beneficiaries Under Policies

    SEATTLE — A Washington federal judge on April 26 dismissed a lawsuit seeking declaratory relief against insurers, finding that although the plaintiffs may have a remedy against the insured for their son’s alleged injuries, they do not have one directly against the insurers as a first-party action (Derrick and Lisa Flavel v. Scottsdale Insurance Company, et al., No. 19-82, W.D. Wash., 2019 U.S. Dist. LEXIS 71440).

  • May 01, 2019

    Relevant Occurrence Is Insured’s Negligent Supervision, Panel Says In Reversal

    CINCINATTI — The Sixth Circuit U.S. Court of Appeals on April 30 reversed and remanded a lower federal court’s ruling in favor of an insurer in a coverage dispute arising from claims that the insured’s independent contractor committed sexual assault, finding that the insurer failed to show that its interpretation of the insurance policy is the only reasonable one (The Scott Fetzer Company v. Zurich American Insurance Company, No. 18-3057, 6th Cir., 2019 U.S. App. LEXIS 13023).

  • May 01, 2019

    Federal Judge: Liquor Liability Exclusion Bars Coverage For Dram Shop Claim

    MIAMI — A Florida federal judge on April 29 granted an insurer’s motion for summary judgment in its lawsuit disputing coverage for an underlying suit alleging that the insured violated Florida’s Dram Shop Law, finding that the policy’s liquor liability exclusion clearly precludes liability for the violation of a statute that is related to alcohol consumption (AIX Specialty Insurance Company v. Members Only Management, LLC, et al., No. 18-60471, S.D. Fla., 2019 U.S. Dist. LEXIS 71347).

  • April 30, 2019

    Federal Judge: No Homeowners Coverage For Suit Alleging Kidnapping, Torture

    ST. LOUIS — A Missouri federal judge on April 23 granted a homeowners insurer’s motion for judgment on the pleadings, finding that of all of the alleged injuries in an underlying lawsuit flow from the intentional acts of the insureds in conspiring to kidnap, kidnapping and physically abusing another individual (Safeco Insurance Company of America v. Blake Laubinger, et al., No. 18-1237, E.D. Mo., 2019 U.S. Dist. LEXIS 68510).

  • April 30, 2019

    New York Justice: Insured Vs. Insured Exclusion Does Not Apply To Bar Coverage

    NEW YORK — A New York justice on April 29 held that excess directors and officers liability insurance policies’ “Insured vs. Insured” exclusion does not bar coverage for underlying claims brought by a creditor trust against the insured’s former directors and officers, denying the insurers’ motion to dismiss a breach of contract counterclaim (Westchester Fire Insurance Co. v. Nicholas S. Schorsch, et al., No. 651026/2018, N.Y. Sup., New York Co.).