Mealey's Emerging Insurance Disputes

  • March 31, 2020

    Invasion Of Privacy Exclusion Bars Coverage For TCPA Suit, Insurer Argues

    RIVERSIDE, Calif. — An insurer on March 14 filed suit in a federal court in California seeking  a declaration that its policy’s “invasion of privacy” exclusion bars directors, officers and organization liability insurance coverage for an underlying putative class action alleging that the insured violated the Telephone Consumer Protection Act (TCPA) and state law (Atlantic Specialty Insurance Company v. HOSOPO Corporation, No. 20-00545, C.D. Calif.).

  • March 31, 2020

    6th Circuit Reverses No-Coverage Ruling In Suit Over Wrongful Conviction

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on March 30 reversed a federal court’s ruling in favor of insurers in their declaratory judgment lawsuit disputing coverage for an underlying malicious prosecution suit brought against their mutual insured by a man exonerated for a murder charge, finding that his injuries were caused by malicious prosecution and were continuous during the relevant coverage period (St. Paul Guardian Insurance Company, et al. v. City of Newport, Ky., et al., No. 19-5948, 6th Cir.).

  • March 31, 2020

    Business Owners Say Coverage Owed For Losses Stemming From Coronavirus Shutdown

    CHICAGO — A group of restaurant and movie theater owners and operators claim in a March 27 complaint filed in Illinois federal court that their insurer breached its contracts and acted in bad faith in denying the insureds’ claims for business interruption losses sustained as a result of the state-ordered shutdown of nonessential businesses in Illinois in the wake of the coronavirus pandemic (Big Onion Tavern Group LLC et al., v. Society Insurance Inc., No. 20-2005, N.D. Ill.).

  • March 31, 2020

    Amusement Devices Exclusion Bars Coverage For Negligence Suit, 11th Circuit Affirms

    ATLANTA — The 11th Circuit U.S. Court of Appeals on March 30 affirmed a lower court’s ruling that a commercial general liability insurance policy’s “amusement devices” exclusion bars coverage for an underlying negligence lawsuit brought against the insured, finding that the lower court properly found that the exclusion is unambiguous (Princeton Excess and Surplus Lines Insurance Company v. Hub City Enterprises, Inc., et al., No. 19-14193, 11th Cir., 2020 U.S. App. LEXIS 9744).

  • March 31, 2020

    2nd Indian Tribe Sues Insurers In Oklahoma Seeking Coverage For Coronavirus Losses

    DURANT, Okla. — Choctaw Nation of Oklahoma is one of two Native American Indian tribes to sue its insurers on March 24 in an Oklahoma court, arguing that they are responsible for its losses and expenses related to the COVID-19 infection and coronavirus pandemic that has allegedly damaged its property and prevented it from being used for its intended purpose (Choctaw Nation Department of Commerce v. Lexington Insurance Co., et al., No. 20-35, Okla. Dist., Bryan Co.).

  • March 30, 2020

    COMMENTARY: Tracking The Flurry Of COVID-19 Related Legislative & Regulatory Activity Impacting Insurers

    By Scott M. Seaman and Judith A. Selby

  • March 30, 2020

    Insureds:  Denial Of Reality Of Coronavirus’ Physical Damage Could Endanger Public

    NAPA, Calif. — Owners, operators and managers of two Napa Valley, Calif., restaurants on March 25 sued their insurers in a California superior court, seeking a declaration that their insurance policy provides coverage for any current and future civil authority closures of Napa County restaurants because of physical loss or damage from the coronavirus and provides business income coverage in the event that coronavirus has caused a loss or damage at their restaurants (French Laundry Partners, LP, et al. v. Hartford Fire Insurance Company, et al., Calif. Super., Napa Co.).

  • March 30, 2020

    No Coverage Owed For Son’s Exposure To Secondhand Smoke, Panel Affirms

    CINCINNATI — No coverage is owed for a son’s exposure to secondhand smoke as a result of his father’s smoking because the father intended to smoke in front of the son, the Sixth Circuit U.S. Court of Appeals said March 27, noting that there was there was no occurrence as required for coverage to exist under the policies at issue (Liberty Mutual Insurance Co., et al. v. Estate of Hugo Bobzien Jr., et al., No. 19-5457, 6th Cir., 2020 U.S. App. LEXIS 9654).

  • March 30, 2020

    Chickasaw Nation Indian Tribe:  Policies Cover Losses Related To Coronavirus

    ADA, Okla. — The Chickasaw Nation Department of Commerce on March 24 sued its insurers in Oklahoma court, seeking a declaration that its insurance policies cover its losses and expenses that are related to the coronavirus pandemic and COVID-19 infection (Chickasaw Nation Department of Commerce v. Lexington Insurance Co., et al., No. 20-35, Okla. Dist., Pontotoc Co.).

  • March 30, 2020

    Panel Affirms Take-Nothing Judgment In Employment Discrimination Coverage Suit

    HOUSTON — A Texas appeals panel on March 26 affirmed a lower court’s ruling that an insurer owes no coverage for an underlying $87,598 default judgment entered against its hospital insured in an employment discrimination lawsuit because the hospital failed to timely report the claim (Junious R. Valentine v. Federal Insurance Company, No. 14-18-00438, Texas App., 14th Dist., 2020 Tex. App. LEXIS 2537).

  • March 27, 2020

    Panel Reverses Ruling In Insurer’s Favor In Professional Liability Coverage Dispute

    DETROIT — A Michigan appeals panel on March 24 held that a lower court erred in holding that underlying allegations against a lawyer insured did not, as a matter of law, come under a professional liability insurance policy’s definition of a “wrongful act,” reversing and remanding the court’s ruling in favor of the insurer (Hanover Insurance Company, Inc. v. Paul M. Lubienski, No. 346942, Mich. App., 2020 Mich. App. LEXIS 2286).

  • March 26, 2020

    Breach Of Contract Claim Fails, Bad Faith Claim Proceeds In Ammonia Leak Dispute

    ROCHESTER, N.Y. — A New York federal judge on March 25 determined that an insured’s breach of contract claim cannot proceed but said that the insured’s bad faith claim can proceed because questions of fact exist regarding the insurer’s investigation and handling of the insured’s claim for product contamination following an ammonia leak in its warehouse (SatisPie LLC v. Travelers Property Casualty Company of America, No. 17-6234, W.D. N.Y., 2020 U.S. Dist. LEXIS 51861).

  • March 25, 2020

    Panel:  Exclusion Bars Coverage For $1.4M Judgment Against Attorney Acting As Trustee

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on March 24 affirmed a lower federal court’s finding that a lawyers professional liability insurance policy’s negligent supervision exclusion bars coverage for a $1,382,653 judgment arising from an attorney insured’s breach of fiduciary duty as a trustee for his management of trust assets (ALPS Property & Casualty Insurance Co., et al v. Ivan L. Higgerson Sr., et al., No. 18-2245, 4th Cir.).

  • March 24, 2020

    Insurers, Merged Company Brief Delaware Supreme Court Over Appraisal Action

    WILMINGTON, Del. — Three insurers and a merged company recently briefed the Delaware Supreme Court about whether a judgment awarding dissenting shareholders additional funds from the company’s merger constituted a securities action sufficient to activate its insurance policies (In re Solera Insurance Coverage Appeals, Nos. 413,2019, 418,2019, Del. Sup.).

  • March 24, 2020

    Insured: Insurer Denied Coverage For Seized Aircraft’s Damage ‘On Frivolous Grounds’

    DANBURY, Conn. — The owner of a Falcon 10 jet airplane in a March 11 complaint tells a Connecticut court that its insurer breached their contract, acted in bad faith and violated Connecticut Unfair Trade Practices Act (CUTPA) when it denied coverage for the aircraft that was allegedly damaged after it was seized by the U.S. government in connection with a drug trafficking criminal investigation (Maule Group, LLC  v.  Great American Insurance Group, Conn. Super., Danbury).

  • March 24, 2020

    Judge Refuses To Let Insurer Intervene In Wrongful Death Suit Against Sorority

    CHICAGO — A federal judge in Illinois on March 22 denied an insurer’s motion to intervene in a mother’s lawsuit alleging 16 wrongful death and survival claims against a national sorority, local sorority chapters and individual sorority members who allegedly hazed her suicidal daughter or failed to protect her from hazing, finding that the insurer fails to identify a claim or defense for which it seeks intervention (Felicia Hankins v. Alpha Kappa Alpha Sorority, Inc., et al., No. 19-00147, N.D. Ill., 2020 U.S. Dist. LEXIS 49099).

  • March 23, 2020

    Judge Tosses Negligence, UCL, Antitrust Claims Against Insurer, Software Developers

    SAN FRANCISCO — A federal judge in California on March 4 dismissed with prejudice insureds’ claims alleging that their homeowners insurer’s undervaluation of insurance policy values was negligent, fraudulent and the product of a conspiracy with the developers of two software programs that were used to determine their initial insurance policy value and the cost to rebuild or repair their property following wildfire damage (Brian Sheahan, et al. v. State Farm General Insurance Company, et al., No. 18-cv-06186, N.D. Calif., 2020 U.S. Dist. LEXIS 37590).

  • March 23, 2020

    Defense Owed For Suit Alleging Insured Violated Biometric Information Privacy Act

    CHICAGO — An Illinois appeals panel on March 20 affirmed a lower court’s ruling that an insurer has a duty to defend its insured against claims that it violated the Biometric Information Privacy Act, further affirming the lower court’s finding that the insured is not entitled to bad faith damages (West Bend Mutual Insurance Company v. Krishna Schaumburg Tan, Inc., et al., No. 19-1834, Ill. App., 1st Dist., 6th Div., 2020 Ill. App. LEXIS 179).

  • March 19, 2020

    COMMENTARY: COVID-19: The Consequences On Contract Performance And The Resolution Of Disputes

    By Mark Mangan, Lukas Lim and Daniel Gaw

  • March 20, 2020

    Office Depot: Court ‘Again Misapplied California Insurance Law’ As To Duty To Defend

    SAN FRANCISCO — Office Depot Inc. recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling in favor of an insurer in its lawsuit seeking coverage for an underlying whistleblower complaint alleging that it improperly charged California government entities for office supplies (Office Depot Inc. v. AIG Specialty Insurance Company, No. 19-55819, 9th Cir.).