Mealey's Emerging Insurance Disputes

  • 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.).

  • April 30, 2019

    9th Circuit Reverses Ruling In Insurer’s Favor In Directors, Officers Liability Suit

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 29 reversed a lower federal court’s summary judgment ruling in favor of a directors and officers liability insurer, finding that the lower court erred in finding that an investor’s written demand against real estate developer insureds constituted a claim made for a wrongful act under the policy (Scott G. Kelly, et al. v. Starr Indemnity & Liability Co., No. 17-56334, 9th Cir., 2019 U.S. App. LEXIS 12871).

  • April 30, 2019

    Pollution Exclusion Bars Coverage For Contaminated Swine Feed, Panel Says

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on April 29 affirmed a district court’s ruling that an insurer owes no coverage to an insured for contaminated fat products supplied to a pork producer because the pollution exclusion applies to the contaminant that was dispersed within the supplied fat products fed to the pork producer’s swine (Restaurant Recycling LLC, v. New Fashion Pork LLP, intervenor plaintiff, v. Employer Mutual Casualty Company, d/b/a EMC Insurance Companies and Hamilton Mutual Insurance Company, No. 17-2792, 8th Cir., 2019 U.S. App. LEXIS 12797).

  • April 29, 2019

    Federal Judge Refuses To Dismiss Claims Against Professional Liability Insurer

    LAS VEGAS — Following a remand from the Ninth Circuit U.S. Court of Appeals, a Nevada federal judge on April 23 denied an insurer’s motion to dismiss an insured’s first amended complaint in a coverage dispute over an underlying qui tam action except for the part of the bad faith claim based on the insurer’s conduct before the Ninth Circuit’s ruling (My Left Foot Children's Therapy, et al. v. Certain Underwriters at Lloyd's London subscribing to policy No. HAH15-0632, No. 15-0632, D. Nev., 2019 U.S. Dist. LEXIS 69236).

  • April 29, 2019

    Judge: Insurer Has No Duty To Defend Bed And Breakfast Owner Against Infringement Suit

    HONOLULU — A Hawaii federal judge on April 24 granted a business liability insurer’s motion for summary judgment in its declaratory judgment lawsuit, finding that it has no duty to defend its bed and breakfast owner insured against an underlying infringement lawsuit brought by a competitor (State Farm Fire and Casualty Company v. Joan Prescott, No. 18-00127, D. Hawaii, 2019 U.S. Dist. LEXIS 69804).

  • April 26, 2019

    Minor Was Not ‘Resident’ Of Mom’s Household At The Time Of Shooting, Panel Says

    DENVER — The 10th Circuit U.S. Court of Appeals on April 23 held that the term “resident” as contained in a homeowners insurance policy is ambiguous and might reasonably be construed in favor of coverage for a woman sued for negligently storing a handgun that her minor son used to fatally shoot someone, reversing and remanding (American National Property and Casualty Co. v. David James Burns, et al., No. 18-8006, 10th Cir., 2019 U.S. App. LEXIS 11846).

  • April 26, 2019

    Insured Established Potential For Exclusion’s Reasonable Force Exception To Apply

    BALTIMORE — Denying an insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for underlying battery and negligence claims, a Maryland federal judge on March 26 held that an insured satisfied its burden of establishing a potentiality that the “reasonable force exception” to the policy’s “battery exclusion” applies to trigger coverage (Nautilus Insurance Company v. 200 West Cherry Street, LLC, No. 18-434, D. Md., 2019 U.S. Dist. LEXIS 50043).

  • April 26, 2019

    New York Justice: Insurer Owes No Defense, Indemnification For Personal Injury Suit

    NEW YORK — A New York justice on April 5 granted a homeowners insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify its insureds against an underlying personal injury lawsuit, further finding that the insurer has no duty to provide "medical payments to others” coverage (Mountain Valley Indemnity Company v - Jean Serge Thelismon, et al., No. 1506012/2017, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 1838).