Mealey's Emerging Insurance Disputes

  • 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).

  • April 24, 2019

    Missouri Panel Reverses Ruling In Favor Of Professional Liability Insurer

    ST. LOUIS — A Missouri appeals panel on April 23 found that a lower court improperly held that negligence claims against a doctor insured are subject to a single liability limit under a professional liability insurance policy, reversing a judgment in favor of the insurer and entering judgment in favor of the appellants (John Patty, D.O., LLC, et al. v. Missouri Professionals Mutual Physicians Professional Indemnity Association, No. ED106747, Mo. App., 2019 Mo. App. LEXIS 594).

  • April 24, 2019

    Insured Seeks Reversal Of No Coverage Ruling For Au Pair Wage Class Action

    ATLANTA — An au pair broker services company recently asked the 11th Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that its errors and omissions professional liability insurer has no duty to defend or indemnify it against an underlying class action lawsuit alleging that it was part of a nationwide conspiracy to illegally suppress au pair wages, contending that the “prior knowledge” exclusion did not bar coverage because it did not expect to be sued for negligence by one of its au pairs (Berkley Assurance Company v. Expert Group International Inc., 18-14506, 11th Cir.).

  • April 24, 2019

    Claim For Professional Errors Coverage Is Not Fairly Debatable, Insured Argues

    POCATELLO, Idaho — A corporation insured on April 22 sued its insurer for breach of contract, bad faith and intentional and negligent infliction of emotional distress, alleging that its claim for professional errors coverage for underlying allegations by one of its customers was not fairly debatable (Nelson & Pade, Inc., et al. v. The Hanover Insurance Co., No. 19-00147, D. Idaho).

  • April 23, 2019

    No Coverage Owed For Suit Arising Out Of Hog Facility, Court Majority Determines

    PIERRE, S.D. — The majority of the South Dakota Supreme Court on April 10 affirmed a trial court’s ruling in favor of an insurer after determining that an underlying suit arising out of the construction of a hog facility does not allege an occurrence under the farm liability policy (Delray Geidel v. De Smet Farm Mutual Insurance Co., No. 28627, S.D. Sup., 2019 S.D. LEXIS 29).

  • April 22, 2019

    Insurer’s Indemnification Duty Is Not Ripe For Ruling, Federal Judge Says

    BIRMINGHAM, Ala. — An Alabama federal judge on April 19 granted a night club operator insured’s motion to dismiss an insurer’s claim seeking a declaration that it has no duty to indemnify the insured against an underlying “Dram Shop Act” lawsuit, finding that the issue is not ripe (Scottsdale Insurance Company v. I-20 HD Ultra Lounge, LLC, et al., No. 18-1155, N.D. Ala., 2019 U.S. Dist. LEXIS 66739).

  • April 19, 2019

    Intentional Acts, Abuse Exclusions Bar Coverage, 10th Circuit Affirms

    DENVER — The 10th Circuit U.S. Court of Appeals on April 18 affirmed a lower federal court’s ruling that policy exclusions for “intentional acts” and "molestation, misconduct or abuse” bar coverage for an underlying lawsuit brought against the insured by his ex-girlfriend (Nikos Hecht v. Great Northern Insurance Company, No. 18-1244, 10th Cir., 2019 U.S. App. LEXIS 11318).

  • April 19, 2019

    Attorney Should Have Reasonably Foreseen Malpractice Claim, Federal Judge Rules

    SEATTLE — A Washington federal judge on April 18 held that a professional liability insurer has no duty to defend or indemnify its attorney insured against an underlying malpractice lawsuit because the insured knew facts that could have reasonably caused him to foresee the malpractice claim before the insurance policy’s effective date (The Hanover Insurance Company v. Hurdelbrink Law Office, Inc., et al., No. C18-0651, W.D. Wash., 2019 U.S. Dist. LEXIS 66482).

  • April 19, 2019

    Connecticut High Court Answers Question In Insurer’s Negligence Suit Against Adjuster

    HARTFORD, Conn. — In opinion scheduled to be released on April 23, the Connecticut Supreme Court answered “no” to the Second Circuit U.S. Court of Appeals’ certified question asking whether trial evidence was legally sufficient to support a jury’s finding that Connecticut's "continuing course of conduct" doctrine tolled the applicable three-year statute of limitations for an insurer to commence a negligence lawsuit against an independent adjuster (Essex Insurance Company v. William Kramer & Associates LLC, No. SC 20130, Conn. Sup., 2019 Conn. LEXIS 102).

  • April 18, 2019

    Panel Reverses Arbitration Ruling In Coverage Dispute Over Environmental Damage

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 17 reversed a federal court’s finding that a site pollution legal liability insurer waived its subrogation rights under an onshore master services agreement (MSA) but affirmed the court’s dismissal of the breach of contract claim against the insurer for lack of personal jurisdiction (Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir., 2019 U.S. App. LEXIS 11255).

  • April 17, 2019

    Judge: Insurer Liable For Breach Of Contract In Dispute With Massage Therapist

    LAS VEGAS — A Nevada federal judge on March 31 allowed a massage therapist’s breach of contract, bad faith and declaratory judgment claims to proceed in a coverage dispute arising from underlying allegations that he engaged in inappropriate sexual acts while he was performing a massage (Starr Indemnity & Liability Company v. Limmie Young, III, et al., No. 14-00239, D. Nev., 2019 U.S. Dist. LEXIS 55467).