Mealey's Emerging Insurance Disputes

  • November 11, 2019

    Outside Business Exclusion Bars Coverage For Claims Against Law Firm, Panel Affirms

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Nov. 8 affirmed a lower federal court's ruling that a professional liability insurance policy's outside business exclusion precludes coverage for underlying claims against a law firm insured and one of its attorneys (Westport Insurance Corporation v. Hippo Fleming & Pertile Law Offices, et al., No. 18-3551, 3rd Cir., 2019 U.S. App. LEXIS 33480).

  • November 11, 2019

    Iowa Panel:  No CGL Coverage Owed For Federal Litigation Arising From Levee Reshaping

    DES MOINES, Iowa — An Iowa panel on Nov. 6 affirmed a lower court’s ruling in favor of a commercial general liability insurer in its lawsuit disputing coverage for underlying federal litigation brought against its insured, concluding that the insured’s intentional act of removing dirt from unauthorized borrow sites to reshape a levee fails to qualify as an occurrence under the policy (Addison Insurance Company v. MEP Co., No. 17-2091, Iowa App., 2019 Iowa App. LEXIS 1006).

  • November 06, 2019

    West Virginia High Court Affirms Dismissal Of Insured’s Negligent Procurement Claim

    CHARLESTON, W.Va. — The West Virginia Supreme Court of Appeals on Nov. 4 held that a lower court did not err in finding that the state does not recognize an insurance agent’s duty to advise an insured of its coverage needs and the special relationship exception that would trigger that duty, affirming the lower court’s grant of the agent’s motion for summary judgment on the insured’s negligent procurement claims (Mine Temp, LLC v. Wells Fargo Insurance Services of West Virginia, Inc., No. 18-0755, W.Va. App., 2019 W. Va. LEXIS 511).

  • November 06, 2019

    11th Circuit Vacates, Remands Insurer’s Suit Brought Under Carmack Amendment

    ATLANTA — The 11th Circuit U.S. Court of Appeals on Nov. 5 vacated and remanded a lower federal court’s summary judgment ruling in favor of an insurer in its subrogation lawsuit seeking recovery of its losses involving a combine harvester that was damaged during transportation from Kentucky to Florida (Atlantic Specialty Insurance Company v. Digit Dirt Worx, Inc., et al., No. 19-11887, 11th Cir., 2019 U.S. App. LEXIS 33013).

  • November 06, 2019

    Insurer Owes Defense, But Its Refusal To Defend Was Not In Bad Faith, Panel Affirms

    CHICAGO — An Illinois appeals panel on Nov. 4 affirmed a lower court’s ruling that an insurer has a duty to defend its insured against an underlying class action alleging violations of the Chicago Residential Landlord Tenant Ordinance but that its refusal to provide a defense did not constitute bad faith (Evergreen Real Estate Services LLC v. Hanover Insurance Company, et al., No. 1-18-1867, Ill. App., 1st Dist., Div. 1, 2019 Ill. App. LEXIS 868).

  • October 21, 2019

    COMMENTARY: Does A Contractual Liability Exclusion In Professional Liability Policies Render Coverage Illusory?

    By Robert M. Hall

  • November 05, 2019

    Policy’s Subrogation Waiver Is Ambiguous, 6th Circuit Majority Says In Reversal

    CINCINNATI — A majority of the Sixth Circuit U.S. Court of Appeals on Oct. 30 reversed a lower federal court’s summary judgment ruling in favor of an insurer, concluding that the policy’s subrogation waiver is ambiguous as to whether the insurer can sue an additional insured for damage caused by negligence (Certain Underwriters at Lloyd's, London v. Sunbelt Rentals, Inc., No. 18-5617, 6th Cir., 2019 U.S. App. LEXIS 32461).

  • November 04, 2019

    Justice: No Defense Owed For Consolidated Class Action Over Parmesan Cheese Labels

    NEW YORK — A New York justice on Oct. 28 granted commercial general liability insurers’ motion for summary judgment in a coverage dispute arising from underlying claims that consumers were misled by grated parmesan cheese product labels, finding that none of the underlying allegations alleges personal injury, property damage or any other occurrence to trigger coverage under the policies (Travelers Property Casualty Company of America, et al. v. ICCO Cheese Co. Inc., No. 652787/2016, N.Y, Sup., New York Co., 2019 N.Y. Misc. LEXIS 5842).

  • November 04, 2019

    Certified Question In Insurance Dispute Is Too Broad, Florida High Court Told

    TALLAHASSEE, Fla. — A question certified to the Florida Supreme Court by a Florida state appellate panel in a malpractice insurance dispute is too broad and failed to properly recognize that, under state law, two “distinct types of tripartite relationship may be created,” a law firm argues in an Oct. 2 respondent’s brief filed in the state Supreme Court (Arch Insurance Company v. Kubicki Draper LLP, No. 19-673, Fla. Sup.).

  • November 01, 2019

    No Coverage Owed Under Pollution Condition Provision, New York Federal Judge Says

    NEW YORK — An insurer owes no coverage under a policy’s pollution loss coverage provision for underlying lawsuits arising out of a fire at a Texas oil refinery because the policy’s pollution loss provision does not apply to the underlying suits; however, the insurer may owe coverage under the policy’s professional services coverage provision as a question of fact exists on the type of services the insured provided prior to the refinery fire, a New York federal judge said Oct. 31 (James River Insurance Co. et al., v. Indian Harbor Insurance Co., No.18-767, S.D. N.Y., 2019 U.S. Dist. LEXIS 189286).

  • November 01, 2019

    Judge:  Insurer’s Duty To Defend School Against Misconduct Suits Remains Active

    PORTLAND, Ore. — A federal judge in Oregon on Oct. 31 denied a commercial general liability insurer’s motion for summary judgment in its interpleader and declaratory judgment lawsuit arising from underlying sexual and nonsexual misconduct claims against its preshool and elementary school insured, rejecting the insurer’s argument that it extinguished its duties to defend and indemnify by placing a $100,000 interpleader deposit into the court’s registry (United States Fire Insurance Company v. Mother Earth School, et al., No. 18-01762, D. Ore., 2019 U.S. Dist. LEXIS 188826).

  • October 30, 2019

    Judge:  Insurer Owes Insurers Pro Rata Share Of Defense Costs For Nuisance Suit

    SPRINGFIELD, Ill. — A federal judge in Illinois on Oct. 25 held that a commercial general liability insurer must pay two other CGL insurers a pro rata share of the costs they incurred defending their hog feeding operations insured against an underlying lawsuit, as well as prejudgment interest from the date the insured retendered the lawsuit to the first insurer  (Westfield Insurance Company v. Indemnity Insurance Company of North America, et al., Nos. 16-3298 and 14-3040, C.D. Ill., 2019 U.S. Dist. LEXIS 185978).

  • October 29, 2019

    Magistrate Grants Insured’s Motion To Strike Insurer’s 6 Affirmative Defenses

    MIAMI — A federal magistrate judge in Florida on Oct. 25 granted a hospital insured’s motion to strike its insurer’s six affirmative defenses in a declaratory judgment lawsuit seeking indemnification for an underlying negligence lawsuit brought by a mental health patient who alleged that she was injured by a hospital employee (Westchester General Hospital Inc. v. Evanston Insurance Company, No. 19-22831, S.D. Fla., 2019 U.S. Dist. LEXIS 184914).

  • October 28, 2019

    Dialysis Provider Portrays Assignment As Broad In ERISA, Medicare Claims Suit

    SAN FRANCISCO — A health care plan violated the Employee Retirement Income Security Act when it failed to notify insureds that the plan no longer offered in-network dialysis providers, a move that violated Medicare rules when prohibiting discrimination, and the assignment of “any cause of action” provides legal standing to pursue the claims, a provider tells the Ninth Circuit U.S. Court of Appeals in an Oct. 23 opening brief (DaVita Inc., et al. v. Amy’s Kitchen Inc., et al., No. 19-15963, 9th Cir.).

  • October 25, 2019

    Judge:  Employees’ Sexual Harassment Suit Fails To Allege Bodily Injury; No Coverage

    ST. LOUIS — A federal judge in Missouri on Oct. 23 granted an insurer’s motion for summary judgment in its declaratory judgment lawsuit challenging coverage for an underlying sexual harassment and wrongful termination lawsuit brought by former employees against a restaurant and bar insured, finding that the employees fail to allege that they have suffered a “bodily injury” to trigger coverage under the policy (State Farm Fire and Casualty Company v. Dado's Cafe, Inc., et al., No. 18-1095, E.D. Mo., 2019 U.S. Dist. LEXIS 183328).

  • October 24, 2019

    Judge Grants Insurer’s Motion For Separate Trials In Coverage Suit Over Dog Bite

    FORT WAYNE, Ind. — A federal judge in Indiana on Oct. 21 granted a homeowners insurer’s motion for separate trials of its declaratory judgment lawsuit challenging coverage for an underlying dog bite claim and a cross-claim filed against its insured, concluding that bifurcation under Federal Rule of Civil Procedure 42(b) is appropriate (The National Mutual Insurance Company v. Justin Hohenberger, et al., No. 19-79, N.D. Ind., 2019 U.S. Dist. LEXIS 182108).

  • October 24, 2019

    Insurer Disputes Coverage For Suit Arising From Flood Damage To Land Parcel

    JONESBORO, Ark. — An insurer on Oct. 15 filed suit in a federal court in Arkansas, seeking a declaration that it has no duty to defend or indemnify against an underlying lawsuit seeking damages for flooding on a parcel of land in Mississippi County, Ark. (Country Mutual Insurance Company v. Samuel Jackson, et al., No. 19-00278, E.D. Ark.).

  • October 23, 2019

    Insurer Reinforces Motion To Dismiss Coverage Suit Over $5.9M Fraudulent Transfer

    NEW YORK — In a reply brief filed Oct. 18, an insurer reinforces its motion to dismiss a financial services company insured’s breach of contract and bad faith lawsuit seeking indemnity for an underlying settlement arising from alleged “spoof emails” that resulted in a $5.9 million fraudulent wire transfer, contending that there “is no question that the loss at issue ‘arose out of’ dishonest, fraudulent and/or criminal conduct” that is excluded from coverage (SS&C Technology Holdings, Inc. v. AIG Specialty Insurance Company, No. 19-07859, S.D. N.Y.).

  • October 21, 2019

    Panel Reverses Summary Judgment Ruling In Insurer’s Favor In False Statements Case

    WEST PALM BEACH, Fla. — A Florida appeals panel on Oct. 16 held that a lower court erred in granting summary judgment in favor of an insurer, finding that the insurer failed to “conclusively negate” the appellants’ affirmative defenses to its complaint arising from claims that a former county commissioner made intentionally false statements that caused third parties to breach their agreement related to a mining project (Maggy Hurchalla, et al. v. Homeowners Choice Property & Casualty Insurance Co. Inc., Nos. 4D18-2740 and 4D18-2935, Fla. App., 4th Dist., 2019 Fla. App. LEXIS 15593).

  • October 21, 2019

    Insolvent Insurer Receiver’s $2M Consent Judgment Is Not Covered Under E&O Policy

    LITTLE ROCK, Ark. — A $2 million consent judgment sought by an insolvent insurer’s receiver is not covered under an errors and omissions insurance policy because a CEO is not a “covered person” under the E&O policy and the consent judgment does not qualify as “damages,” an Arkansas federal judge held Oct. 17, dismissing the case with prejudice (Allen W. Kerr v. Gotham Insurance Co., No. 18-423, E.D. Ark., 2019 U.S. Dist. LEXIS 180794).