Mealey's Emerging Insurance Disputes

  • August 07, 2020

    Insurer Asks Panel To Reject Insured's 'Effort To Manufacture A Duty To Defend'

    CHICAGO — Exactly one month after an insured appealed an Illinois federal judge's ruling in favor of an insurer in a coverage dispute arising from underlying claims that it violated the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA), the insurer responded July 15 by asking the Seventh Circuit U.S. Court of Appeals to reject the insured's "effort to manufacture a duty to defend where the insurance policies plainly exclude it" (Zurich American Insurance Company, et al. v. Ocwen Financial Corporation, et al., No. 19-3052, 7th Cir.).

  • August 07, 2020

    New York Restaurants Seek Millions In Losses From COVID-19 Shutdowns

    BROOKLYN, N.Y. — Five days after filing a similar lawsuit in Illinois, the law firm Jenner & Block LLP on Aug. 3 filed a novel coronavirus coverage lawsuit in a New York court on behalf of insureds including "operators of some of the most iconic and legendary restaurants, cafes, and bars in New York City" seeking recovery for "multi-million dollar business income losses and extra expenses" suffered as a direct result of state and municipal novel coronavirus shutdown executive orders and partial reopening executive orders (Abruzzo Docg Inc., et al. v. Acceptance Indemnity Insurance Co., et al., No. 514089/2020, N.Y. Sup., Kings Co.).

  • August 06, 2020

    D.C. Judge:  Restaurants Did Not Incur Direct Physical Loss From Coronavirus Shutdown

    WASHINGTON, D.C. — A Washington, D.C., superior court judge on Aug. 6 rejected restaurant owner insureds' argument that the loss of use of their properties due to the novel coronavirus and related governmental orders constitutes "direct physical loss" under their insurance policies, denying their expedited motion for summary judgment and granting their "all-risk" insurer's cross-motion for summary judgment (Rose's 1, LLC, et al. v. Erie Insurance Exchange, No. 2020 CA 002424 B, D.C. Super.).

  • August 07, 2020

    Suit Seeking Business Income Losses Caused By Coronavirus Remains In Federal Court

    LOS ANGELES — A California federal judge on Aug. 4 denied an insured's motion to remand a breach of contract and bad faith lawsuit stemming from an insurer's denial of coverage for business income losses caused by the novel coronavirus because complete diversity of citizenship exists as the Los Angeles health officer was fraudulently joined as a defendant (Pez Seafood DTLA LLC v. The Travelers Indemnity Co., et al., No. 20-4699, C.D. Calif., 2020 U.S. Dist. LEXIS 139928).

  • August 06, 2020

    Panel Reverses Long-Term Care Insurance Suit Due To 'Too Many Unanswered Questions'

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on Aug. 5 reversed and remanded a lower federal court's dismissal of a putative class action brought against the federal judiciary's long-term care insurer, finding that the parties' "arguments make clear that choice of law is critical in this case, but they leave too many unanswered questions" (Carlton Gunn v. Continental Casualty Company, No. 19-2898, 7th Cir., 2020 U.S. App. LEXIS 24663).

  • August 05, 2020

    Insurer Disputes Coverage For Injunctive Suit Against Franchise Arising From COVID-19

    CHICAGO — An insurer on July 30 filed a declaratory judgment lawsuit disputing coverage for an underlying declaratory and injunctive relief action seeking to order the former owner of a McDonald's franchise to provide a safe working environment in response to the novel coronavirus, arguing that the underlying lawsuit does not seek "damages" to trigger coverage under the policy (Employers Preferred Insurance Company v. Lexi Management LLC, et al., No. 2020CH05203, Ill. Cir., Cook Co.).

  • August 05, 2020

    11th Circuit:  No Coverage Owed For Injuries Incurred At Construction Site

    ATLANTA — The 11th Circuit U.S. Court of Appeals on Aug. 4 held that appellants have failed to raise a genuine issue of material fact to disturb a lower court's summary judgment ruling in favor of a general liability insurer, finding that the lower court properly concluded that a general contractor was a construction site worker's statutory employer under Florida Statutes Section 440.10(1)(b) and, therefore, the worker's injuries were barred from coverage (Mid-Continent Casualty Company v. Arpin And Sons, LLC, et al., No. 18-11784, 11th Cir., 2020 U.S. App. LEXIS 24480).

  • August 04, 2020

    Roundup Of Briefs, Complaints Over Coronavirus Coverage

    From the Houston Rockets organization suing its “all-risk” insurer to an insurer’s dismissal argument that claims are excluded by the policy’s virus or bacteria exclusion, Mealey Publications takes a look at the latest pleadings relating to business interruption coverage for COVID-19.

  • August 04, 2020

    VIZIO Seeks Coverage From Insurers For Smart TV Litigation Costs, Settlement

    LOS ANGELES — VIZIO Inc. on July 30 sued its insurers in a California federal court, 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 (VIZIO Inc. v.  Navigators Insurance Company, et al., No. 20-6864, C.D. Calif.).

  • August 04, 2020

    Judge:  Teacher's Failure To Report Sexual Abuse Falls Under 'Professional Services'

    BRUNSWICK, Ga. — A federal judge in Georgia on Aug. 3 entered judgment in favor of a homeowners insurer after finding that its insured's alleged failure to report claims of sexual abuse against high school students by a fellow teacher clearly falls within the policy's definition of "professional services," precluding coverage (Owners Insurance Company v. Ashton Brinkley, et al., No. 19-107, S.D. Ga., 2020 U.S. Dist. LEXIS 136715).

  • August 04, 2020

    Judge:  Suit Seeking Restitution Of City's Towing Fee Does Not Trigger Coverage

    EAST ST. LOUIS, Ill. — A federal judge in Illinois on Aug. 3 held that an insurer has no duty to defend or indemnify its insured against an underlying class action seeking recovery of an ill-gotten gain, finding that any money the insured might be required to pay amounts to restitution, which is not a covered "loss" under the policy (Atlantic Specialty Insurance Company v. City Of Carbondale, et al., No. 19-556, S.D. Ill., 2020 U.S. Dist. LEXIS 137330).

  • August 03, 2020

    Majority Affirms No Coverage Owed For $2.2M Judgment In Negligence Suit

    CINCINNATI — A majority of the 11th Circuit U.S. Court of Appeals on July 27 affirmed a lower federal court's summary judgment ruling that insurers owe no coverage for an underlying $2.2 million judgment against an insured for his negligence in failing to maintain, install or inspect a ladder used during a hunting trip, finding that there is no coverage under one policy because the underlying injuries did not arise from hunt club activities and occurred at a property that was not insured under second policy (Brent Russcher, et al. v. Outdoor Underwriters Inc., et al., No. 19-4021, 6th Cir., 2020 U.S. App. LEXIS 23927).

  • August 03, 2020

    Magistrate Rejects Insurer's Motion To Dismiss Coverage Suit Over Commission Scheme

    CINCINNATI — A federal magistrate judge in Ohio on July 29 recommended denying an insurer's motion to dismiss an insured's breach of contract and bad faith lawsuit seeking crime protection insurance coverage for an alleged fraudulent scheme through which the insured's employee stole $1,954,329.13 in commission payments, finding that the insured has demonstrated a "loss" under the insurance policy (M&C Holdings Delaware, Partnership, et al. v. Great American Insurance Company, No. 20-121, S.D. Ohio, 2020 U.S. Dist. LEXIS 134651).

  • July 31, 2020

    Majority:  Insurer Has Duty To Defend Tenant's Suit Against Apartment Manager

    ATLANTA — A majority of the 11th Circuit U.S. Court of Appeals on July 30 held that a professional liability insurer has a duty to defend against an underlying lawsuit alleging that an apartment manager insured wrongfully withheld the security deposits of current and former tenants, reversing and remanding a lower court (AEGIS Electric & Gas International Services Limited v. ECI Management LLC, No. 19-11114, 11th Cir., 2020 U.S. App. LEXIS 24037).

  • July 30, 2020

    Insurer:  Policies 'Were Not Designed To Cover Economic Fallout From Global Pandemic'

    CHICAGO — A commercial property insurer filed suit in a federal court in Illinois on July 29 against 31 of its restaurant insureds, seeking a declaration that it has no duty to provide business interruption coverage for their alleged losses arising from public health orders that restricted public gatherings in an effort to slow the spread of the novel coronavirus (State Auto Property And Casualty Insurance Co.  v. Classic Dining Group LLC, et al., No. 20-04434, N.D. Ill.).

  • July 30, 2020

    Judge Refuses To Dismiss Coverage Dispute Arising From Hulk Hogan's Conspiracy Suit

    ATLANTA — A federal judge in Georgia on July 29 denied a multimedia liability insurer's motion to dismiss a radio station insured's breach of contract and bad faith lawsuit seeking coverage for Hulk Hogan's 2016 lawsuit alleging that the insured and its employees conspired to disseminate videotaped recordings of sexual encounters between Hogan and the wife of a Tampa, Fla., radio personality (Cox Enterprises, Inc., et al. v. Hiscox Insurance Company, Inc., No. 20-415, N.D. Ga.).

  • July 30, 2020

    No Professional Liability Coverage Owed For Failure To Settle Claim, Insurer Argues

    CHICAGO — A professional liability insurer in a July 27 opening brief argues to the Seventh Circuit U.S. Court of Appeals that it owes no coverage for an underlying claim alleging that a medical malpractice insurer failed to settle a malpractice claim against its doctor insured (The Medical Protective Company of Fort Wayne Indiana v. American International Specialty Lines Insurance Company, No. 20-1831, 7th Cir.).

  • July 29, 2020

    Federal Judge: Los Angeles Mayor Fraudulently Joined In Coronavirus Coverage Suit

    LOS ANGELES — A federal judge in California on July 27 denied an insured's motion to remand its novel coronavirus coverage suit to a California superior court, finding that the insured fraudulently joined Los Angeles Mayor Eric Garcetti (Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, C.D. Calif., 2020 U.S. Dist. LEXIS 132841).

  • July 29, 2020

    Insureds Sue Charter Oak For Business Income Losses Arising From Coronavirus

    Insureds on July 24 filed two separate federal lawsuits in Maryland and the District of Columbia against The Charter Oak Fire Insurance Co., alleging that the insurer's "arbitrary and wrongful denial of insurance benefits" arising from the novel coronavirus leaves them "financially insecure and threatens the survival" of one or more of their collective 14 restaurants that are covered under their policies (RW Restaurant Group LLC, et al. v. The Charter Oak Fire Insurance Company, No. 20-02161, D. Md.; FT DC, LLC, et al. v. The Charter Oak Fire Insurance Company, No. 20-02026, D. D.C.).

  • July 28, 2020

    Insured: Insurer's COVID-19 Coverage Denial Has Forced It To Fight 'Two-Front' War

    NEW YORK — "New York State's largest health care provider and private employer" filed suit in a New York court on July 24, alleging that its health care premises pollution liability insurer's denial of coverage for its losses arising from the novel coronavirus pandemic has forced it "to fight a two-front war, both against the worst public health crisis the world has seen in generations, but also to obtain coverage to which it is clearly entitled" (Northwell Health Inc. v. Illinois Union Insurance Company, N.Y. Sup., New York Co.).