Mealey's Emerging Insurance Disputes

  • May 12, 2021

    Policy Requires Insured To ‘Fall Down A Rabbit Hole,’ Judge Says In COVID-19 Suit

    PHILADELPHIA — Denying an insurer’s motion to dismiss a retail furniture insured’s lawsuit seeking coverage for its losses stemming from the forced closure of its business in response to the coronavirus pandemic, a Pennsylvania federal judge on May 7 said the more-than-100-page policy requires “the insured to fall down a rabbit hole and wander through a vast thicket of verbiage that would leave even the most careful reader mystified by the mazes of pages to be pieced together and deciphered in order to determine if there is coverage on the other side.”

  • May 11, 2021

    Amici: Policies Never Intended To Cover Economic Losses Untethered To Physical Damage

    CHICAGO — Amici curiae in support of an insurer on May 5 asked the Seventh Circuit U.S. Court of Appeals to affirm a lower federal court’s dismissal of a restaurant insured’s breach of contract lawsuit seeking coverage for its alleged $977,891 in lost business income arising from its government-ordered shutdown in response to the coronavirus pandemic, arguing that “[i]mposing a new and retroactive extra-contractual risk on insurers would threaten insurer solvency and harm Illinois’ insurance marketplace."

  • May 11, 2021

    Los Angeles Restaurant Owner Seeks Reversal Of No Coverage Ruling In COVID-19 Suit

    SAN FRANCISCO — The owner of two Los Angeles restaurants recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of its lawsuit seeking coverage for its business income loss caused by the governmental shutdown orders in response to the coronavirus pandemic, contending that the lower court dismissed its complaint “based on a range of hypothetical policy consequences” that render its interpretation of the policy “unreasonable — even if conceivable.”

  • May 11, 2021

    Gallery: Court Erred In Accepting Insurer’s ‘Self- Serving’ Policy Interpretation

    NEW YORK — A Manhattan-based art gallery tells the Second Circuit U.S. Court of Appeals in an April 2 brief that a lower federal court committed reversible error in its interpretation of an all-risk business owners insurance policy because it permitted the insurer to escape liability even though a reasonable interpretation of the policy requires the insurer to provide coverage for its losses arising from the forced cessation of its operations in response to the coronavirus pandemic.

  • May 11, 2021

    Panel: D&O Policy Ambiguous On Whether Insurer Owes Coverage For Investors’ Claims

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals held on May 11 that a directors and officers liability policy is ambiguous as to whether an insurer has a duty to defend and indemnify its insured and its chief executive officers against underlying claims brought by investors, reversing a lower federal court’s ruling in favor of the insurer and remanding.

  • May 10, 2021

    Judge Dismisses Excess Insurer From Coverage Dispute Arising From Smart TV Litigation

    LOS ANGELES — A federal judge in California on May 4 granted an excess insurer’s motion to dismiss Vizio Inc.’s lawsuit seeking defense and indemnity for an underlying $17 million settlement and defense costs arising from class claims over the insured’s unauthorized collections of consumers’ television viewing data, dismissing the claims for breach of contract, breach of the implied covenant of good faith and fair dealing, equitable contribution and declaratory judgment with leave to amend.

  • May 10, 2021

    4th Circuit Affirms Ruling In Favor Of Insurer In Mother Church’s Bad Faith Suit

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on May 7 rejected an insurer’s contention that it was injured by a captive insurer’s decision to defend its rivals against two underlying lawsuits, affirming a lower court’s finding that the insured has failed to demonstrate an injury that is fairly traceable to a breach of captive insurance rules.

  • May 07, 2021

    Panel Affirms Ruling In Insurers’ Favor In Coverage Suit Over Wrongful Death Claims

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 5 affirmed a federal court’s ruling in favor of a primary and excess insurer in an insured’s breach of contract lawsuit arising from a fatal truck accident involving the insured’s employee.

  • May 07, 2021

    Judge Rules For Insurers In Separate Coverage Suits Arising From Opioid Epidemic

    PADUCAH, Ky. — A federal judge in Kentucky on May 5 granted Westfield National Insurance Co.’s motion for summary judgment in its lawsuit disputing coverage for underlying lawsuits alleging that Quest Pharmaceuticals Inc. improperly distributed opioids the same day he ruled in favor of another insurer in a similar coverage dispute.

  • May 06, 2021

    Prior Acts Exclusion Bars Coverage, Directors & Officers Insurer Tells 11th Circuit

    ATLANTA — Arguing that an insurer’s duty to defend “is not limitless,” a directors and officers liability insurer on April 12 asked the 11th Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that adopted a magistrate’s recommendation to grant nursing home owner insureds’ motion for summary judgment and deny its cross-motion for summary judgment in a coverage dispute arising from claims that the insureds breached fiduciary and statutory duties and caused physical and monetary injuries to one of their residents.

  • May 05, 2021

    Panel Affirms Discovery, Summary Judgment Rulings In Insurance Bad Faith Appeal

    PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel on May 3 ruled that a federal district court did not abuse its discretion in excluding portions of three declarations submitted by a beneficiary in an insurance breach of contract and bad faith lawsuit stemming from insurers’ denial of life insurance benefits and rescission of policies because the declarants lacked the required knowledge of the statements asserted as required.

  • May 05, 2021

    Roundup Of Latest Briefs Over Coronavirus Coverage

    From the owner and operator of the Philadelphia Eagles’ motion to remand its coverage lawsuit to a dental provider’s appeal to the Seventh Circuit U.S. Court of Appeals, Mealey Publications takes a look at the latest pleadings relating to insurance coverage for COVID-19.

  • May 04, 2021

    Panel Grants Insured’s Motion To Consolidate Appeals In COVID-19 Coverage Suits

    ATLANTA — The 11th Circuit U.S. Court of Appeals on April 27 granted an insured’s motion to consolidate for oral argument 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, noting that the three cases will be consolidated for merits disposition after briefing has been completed separately in each appeal.

  • May 04, 2021

    Judge Transfers Coverage Dispute Over Data Breach To Washington Federal Court

    MINNEAPOLIS — A federal judge in Minnesota on April 30 granted a motion by an excess errors and omissions insurer to transfer the venue of a commercial general liability insurer’s declaratory judgment lawsuit seeking reimbursement for its settlement of two lawsuits arising from a data and security breach of the insured’s computer network system that affected approximately 10 million individuals.

  • May 04, 2021

    Judge Vacates Judgment In Favor Of Directors & Officers Insurer, Amends Order

    WILMINGTON, Del. — A federal judge in Delaware on April 30 vacated her judgment in favor of an excess directors and officers liability insurer and amended her prior order to deny in part the insurer’s motion for summary judgment in an insured’s lawsuit seeking coverage for an underlying stockholder action alleging that directors and officers breached their fiduciary duties.

  • May 04, 2021

    Federal Judge Affirms Finding That Amendment In Bad Faith Suit Is Not Warranted

    NEWARK, N.J. — A New Jersey federal judge on April 29 determined that a magistrate judge properly denied a motion to amend a complaint filed by insureds in a breach of contract and bad faith lawsuit against a professional liability insurer and agreed with the magistrate judge that the insureds failed to show that there was good cause for failing to amend the complaint before the court-imposed scheduling deadline for amended pleadings.

  • May 04, 2021

    New York Justice: CGL Insurer Has No Duty To Defend Personal Injury Suits

    NEW YORK — A New York justice held April 22 that a commercial general liability insurer has established a prima facie entitlement to summary judgment because its unambiguous policy specifically excludes coverage for underlying personal injury actions brought by construction workers.

  • May 03, 2021

    Philadelphia Eagles Move To Remand COVID-19 Coverage Suit Against Insurer

    PHILADELPHIA — The owner and operator of the Philadelphia Eagles football organization on April 30 moved for the U.S. District Court for the Eastern District of Pennsylvania to remand its lawsuit seeking a declaration as to coverage for its alleged losses arising from the coronavirus pandemic eight days after its property insurer moved to dismiss the lawsuit, arguing that remand is warranted so the federal court “can avoid interference in the delicate state regulatory issues involved and give appropriate respect to the important state interests implicated by this action."

  • May 03, 2021

    Panel Majority Says District Court Incorrectly Dismissed Crop Insurance Suit

    CINCINNATI — The majority of a Sixth Circuit U.S. Court of Appeals panel on April 28 reversed a district court’s dismissal of a putative class action filed by farmers against crop insurers and the federal agencies that reinsure crop insurers after determining that the district court incorrectly concluded that the pricing mechanisms for dry-bean crop insurance in Michigan and Minnesota were identical.

  • May 03, 2021

    Insurer Files Supplemental Brief In Coverage Dispute Over Backdating Litigation

    PASADENA, Calif. — An insurer on April 28 filed a supplemental brief in the Ninth Circuit U.S. Court of Appeals in a dispute over whether it was obligated to fund a settlement reached in underlying backdating litigation after a majority of the Arizona Supreme Court, in answering a certified question, held that the Ninth Circuit should assess the objective reasonableness of the insurer’s decision to withhold consent to the insured’s settlement with shareholders from the perspective of the insurer.