Mealey's Emerging Insurance Disputes : Mealey's : Legal News & Analysis

Mealey's Emerging Insurance Disputes

April 18, 2024
D&O Insurers File Defenses To Insurer In Rehabilitation’s Breach Of Contract Suit

INDIANAPOLIS — Primary and excess directors and officers (D&O) insurers that issued policies to an insurer now in rehabilitation filed defenses in an Indiana federal court to the insurer in rehabilitation’s suit against them that seeks a declaration that specified D&O policies apply to cover claims in underlying litigation.
April 18, 2024
English Panel Upholds Stay In Dispute Over Which Reinsurance Agreement Controls

LONDON — Upholding the stay of an English case in a reinsurance dispute and saying “the parties began by playing cricket but then switched to baseball,” a three-justice panel of the Court of Appeal of England and Wales agreed with a lower court that the operative agreement calls for arbitration in New York.
April 17, 2024
Judge Files Redacted Opinion Ruling For Under Armour In D&O Coverage Dispute

BALTIMORE — A federal judge in Maryland refiled an opinion with redactions granting Under Armour Inc.’s motion for judgment on the pleadings in its directors and officers liability insurers’ lawsuit seeking a declaration that they owe no coverage for underlying investigations brought by the U.S. Securities and Exchange Commission and the U.S. Department of Justice, shareholder demand letters and a securities class action.
April 17, 2024
Federal Judge Clarifies Claims Deadline For Preliminarily Approved Class Settlement

SAN FRANCISCO — A federal judge in California issued an order clarifying the claims deadline for the submission of claims for purposes of a $23,997,500 settlement and notice plan that received preliminary approval in a putative class action alleging claims for unfair business practices, false advertising, fraud, deceit, misrepresentation and breach of the duty of good faith against travel insurers.
April 17, 2024
IRS Adds To String Of Tax Court Wins In Case Over Purported Microcaptives

WASHINGTON, D.C. — In line with the handful of U.S. Tax Court rulings in similar cases, a judge has sustained Internal Revenue Service determinations regarding two purported microcaptive insurance companies, concluding that they “failed to distribute risk and were not selling insurance in the commonly accepted sense,” so the purported premiums cannot be deducted as insurance expenses on federal income taxes.
April 17, 2024
Insureds Sue Excess D&O Insurers For Bad Faith, Seek Coverage For Receiver’s Claims

CLEVELAND — The former chief executive officer and the general counsel of Dream Center Education Holdings LLC sued their excess directors and officers liability insurers for breach of contract and bad faith in an Ohio federal court, alleging that the insurers’ denials of coverage for a receiver’s underlying lawsuit “are both baseless and unreasonable.”
April 16, 2024
4th Circuit Dismisses Insured’s Appeal In Coverage Dispute Over Trespass Claim

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals granted an insured’s motion to dismiss its own appeal of a lower federal court’s grant of a commercial general liability insurer’s motion for summary judgment in the insurer’s declaratory judgment lawsuit disputing coverage for an underlying trespass claim brought against the insured.
April 15, 2024
Judge Partly Grants Insurer’s Motion To Compel In D&O Coverage Dispute Over Merger

WILMINTON, Del. — A Delaware judge on April 12 granted in part and denied in part a directors and officers liability insurer’s motion to compel discovery in a coverage dispute over claims that directors, officers and controlling shareholders breached their fiduciary duties in connection with the 2019 merger of Viacom and CBS Corp.
April 15, 2024
Judge Dismisses Malpractice Claimant From Professional Liability Coverage Suit

LAS VEGAS — One day after the parties filed a joint stipulation of dismissal, a federal judge in Nevada dismissed an underlying malpractice claimant from a professional liability insurer’s lawsuit alleging that the attorney insured fraudulently concealed one or more material facts on his renewal insurance applications.
April 15, 2024
Freddie Mac, Lead Insurer In D&O Coverage Dispute Finalize Settlement

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) notified a District of Columbia federal court that it has reached a settlement with the lead insurer in its breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
April 12, 2024
8th Circuit Dismisses Insurer’s Appeal In Class Action For Lack Of Jurisdiction

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals dismissed an automobile insurer’s appeal of a lower court’s partial denial of its motion to dismiss a putative class action challenging its practice of calculating a car’s actual cash value, finding that it lacks jurisdiction to hear the appeal.
April 11, 2024
English Justice: Unlikeliness Of Fair Trial In Russia Supports Denying Stay Bids

LONDON — An English justice considering dozens of aviation insurance coverage cases that arose after Russia’s invasion of Ukraine has concluded that — despite Russian law and exclusive jurisdiction clauses (EJCs) outlined in reinsurance slips — they should continue in the English court rather than being stayed to give effect to those clauses.
April 11, 2024
No Disparagement Alleged, No Advertising Injury Coverage Triggered, Panel Affirms

NEW YORK — The Second Circuit U.S. Court of Appeals held that an underlying class action lawsuit brought against the manufacturer of Wipe Out! wipes and sprays failed to allege disparagement and, therefore, its general liability insurance policy’s personal and advertising injury coverage was not triggered, affirming a federal court’s dismissal of the insured’s lawsuit seeking coverage for underlying allegations that it made false and misleading claims on the labels of three of its products.
April 10, 2024
9th Circuit Partly Reverses Ruling In Insurers’ Favor In Coronavirus Coverage Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on April 9 held that a lower federal court properly granted insurers’ motion to dismiss all claims in a coronavirus coverage dispute that include the triggering language “direct physical loss or damage” to restaurant and hotel insureds’ properties but reversed the lower court’s denial of leave to amend a claim under the Crisis Event provision, which, the panel noted, does not include any language regarding “direct physical loss or damage.”
April 09, 2024
Judge Orders Insurer To Pay $2M To Co-Defendant In Chris Brown Insurance Fraud Row

MEMPHIS, Tenn. — A Tennessee federal judge ordered the insurer of a recording studio owned by musician Chris Brown, who was previously found liable for submitting a fraudulent insurance claim for burglary and fire at his studio, to pay $2,066,217.30 of a $2.5 million jury verdict to a co-defendant and lessee of the studio, finding that the lessee is entitled to recover that amount, which is based on 90% of the earning value of the lessee’s studio as attributed to its “gear.”
April 09, 2024
Insurer Seeks Rehearing In Dispute Over $1M Settlement Of Canceled Music Festival

NEW ORLEANS — An insurer filed a petition asking the Fifth Circuit U.S. Court of Appeals to reconsider its reversal of a lower federal court’s summary judgment ruling in its favor in the insured’s lawsuit seeking coverage for an underlying $1 million class action settlement arising from its refusal to refund ticket sales for the South by Southwest festival that was canceled due to the COVID-19 pandemic, challenging the panel’s finding that the policy’s contract and professional services exclusions do not bar coverage.
April 09, 2024
6th Circuit Affirms Rulings In Professional Liability Coverage Dispute

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 8 affirmed a lower federal court’s summary judgment rulings in a professional liability coverage dispute arising from a financial adviser insured’s valuations for a bankrupt paper manufacturing company and its Employee Stock Ownership Plan, finding that the insurer had a duty to defend its insured until only claims falling under a policy exclusion remained and that the insured has to reimburse the insurer for defending it after the same exclusion applied.
April 08, 2024
Insured Asks 5th Circuit To Rehear Professional Liability Coverage Dispute

NEW ORLEANS — An insured on April 5 filed a petition seeking rehearing en banc of the Fifth Circuit U.S. Court of Appeals’ March 21 per curiam opinion that affirmed a lower federal court’s summary judgment ruling in favor of a professional liability insurer in the insured’s lawsuit seeking coverage for underlying claims that she breached a subcontract by wrongfully soliciting the underlying plaintiff’s clients, asserting that the way the panel affirmed the lower court “without writing on the issues” “appears to approve a faulty process for determining the duty to Defend.”
April 08, 2024
Driver Appeals Grant Of Summary Judgment On UCL Claim For ‘Unfair’ COVID Premiums

SAN FRANCISCO — A driver on April 5 appealed to the Ninth Circuit U.S. Court of Appeals a California federal judge’s grant of summary judgment in favor of GEICO after finding that it did not violate California’s unfair competition law (UCL) by unfairly profiting from a premium giveback program initiated during the COVID-19 pandemic.
April 08, 2024
Insurer Moves To Reargue Dismissal Of Breach Of Contract Claims In Subrogation Suit

WILMINGTON, Del. — An insurer asked a Delaware court if it can reargue the court’s dismissal of its breach of contract claims for pleading deficiencies and file an amended complaint before dismissal with prejudice is entered on the breach of contract claims in its subrogation lawsuit seeking recovery from an application service provider for the amount paid to nonprofit insureds for investigative and remediation steps arising from a ransomware attack.
April 08, 2024
6th Circuit Affirms Ruling In Favor Of Maritime Cargo Insurer

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a lower court’s summary judgment ruling in favor of a maritime cargo insurer in an insured’s breach of contract lawsuit seeking coverage for its $5 million in unanticipated shipping expenses, finding that the policy’s Risks Covered and Shipping Expenses clauses do not provide coverage.
April 05, 2024
Panel Affirms Court’s Denial Of Insurer’s Motion To Intervene In Wrongful Death Suit

KANSAS CITY, Mo. — A Missouri appeals panel held that a lower court did not err in refusing to grant a homeowners insurer’s motions to intervene and stay a wrongful death lawsuit, rejecting the insurer’s contention that it had an “undeniable right” to intervention and a stay pursuant to existing Missouri case law.
April 05, 2024
Panel Vacates Ruling In Favor Of Logistics Company In Insurer’s Subrogation Suit

NEW YORK — The Second Circuit U.S. Court of Appeals on April 4 vacated a lower federal court’s summary judgment ruling in favor of a logistics company in an insurer’s subrogation lawsuit seeking coverage for its pharmaceutical manufacturer insured’s loss of more than $1.8 million in damaged cargo, finding that there is a genuine dispute of material fact regarding whether the logistics company was a contracting carrier subject to the Montreal Convention and its two-year statute of limitations.
April 04, 2024
Insured Appeals Court’s Ruling That Bump-Up Exclusion Bars D&O Coverage

ALEXANDRIA, Va. — An insured on April 3 filed a notice of appeal in a Virginia federal court asking the Fourth Circuit U.S. Court of Appeals to review the lower court’s holding that a “bump-up” exclusion unambiguously precludes directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger.
April 03, 2024
Connecticut Panel Affirms Ruling In Insurer’s Favor In Tribe’s Coronavirus Suit

HARTFORD, Conn. — A Connecticut appeals court on April 2 affirmed a lower court’s judgment in favor of an insurer in an Indian tribe’s declaratory judgment lawsuit arising from the COVID-19 pandemic, rejecting the tribe’s contention that the lower court improperly determined that the policy’s contamination exclusion applied to bar the majority of its coverage.