Mealey's Emerging Insurance Disputes

  • May 29, 2020

    Insurers Seek Dismissal Of Coronavirus Class Action Brought By Nevada Restaurants

    LAS VEGAS — Insurers on May 26 moved to dismiss restaurant insureds’ class action seeking coverage for suspension of business operations, business income losses and extra expenses following the governor’s emergency directives that suspended all on-site dining for Nevada restaurants in response to the novel coronavirus pandemic (Egg and I, LLC, et al. v. U.S. Specialty Insurance Company, et al., No. 20-00747, D. Nev.).

  • May 28, 2020

    Insurer Refutes Claim That Coronavirus Is ‘Physically Impacting’ Restaurant

    PHILADELPHIA — Asserting 16 affirmative defenses, an insurer on May 26 answered a restaurant owner insured’s complaint asking a Pennsylvania federal court to declare that its all-risk insurance policy covers any current and future civil authority closures of Philadelphia County restaurants due to physical loss or damage from the novel coronavirus and provides business income coverage if the coronavirus causes a loss or damage at its restaurant (LH Dining L.L.C. v Admiral Indemnity Company, No. 20-01869, E.D. Pa.).

  • May 28, 2020

    Panel Majority Reverses Ruling On Breach Of Contract Claim, Affirms On Bad Faith Claim

    RIVERSIDE, Calif. — A trial court did not err in granting a homeowners insurer’s motion for summary judgment on a bad faith claim but did err in granting the insurer’s motion for summary judgment on a breach of contract claim because there is no evidence regarding what, if anything, the homeowners could have done to discover or stop their tenant’s marijuana-growing operation, a Fourth District California Court of Appeal majority said May 26 (James Mosley v. Pacific Specialty Insurance Co., No. E071287, Calif. App., 4th Dist., Div. 2, 2020 Cal. App. LEXIS 451).

  • May 28, 2020

    Panel Affirms Arbitration Award In Suit Arising From Accident Caused By Lyft Driver

    SAN FRANCISCO — A California appeals panel on May 26 affirmed a lower court’s ruling that confirmed an arbitration award in favor of Lyft Inc. and denied its commercial general liability insurer’s petition to vacate the award in an insurance coverage dispute stemming from an accident that was caused by a driver who was using the Lyft platform (Tokio Marine Specialty Insurance Company v. Lyft, Inc., No. A155908, Calif. App., 1st Dist., Div. 4, 2020 Cal. App. Unpub. LEXIS 3261).

  • May 28, 2020

    Majority Vacates, Remands No Coverage Ruling In Suit Over False Medicaid Claims

    RICHMOND, Va. — A majority of the Fourth Circuit U.S. Court of Appeals on May 26 vacated a lower federal court’s finding that an excess insurer has no duty to defend or indemnify its insureds against an underlying lawsuit seeking recovery for the government's alleged injuries for false claims for Medicaid reimbursements (Affinity Living Group, LLC, et al. v. StarStone Specialty Insurance Company, No. 18-2376, 4th Cir., 2020 U.S. App. LEXIS 16686).

  • May 27, 2020

    New York Lawmaker Proposes Pandemic Risk Reinsurance Program

    NEW YORK — With support from industry and trade association leaders, a senior member of the House Financial Services Committee on May 26 proposed the creation of a risk reinsurance program for insurers that provide business interruption coverage for future pandemics.

  • May 27, 2020

    Suspension Was Not Caused By Physical Loss, Insurer Rebuts In Coronavirus Suit

    TAMPA, Fla. — A commercial property insurer on May 21 replied to a sports bar insured’s response to its motion to dismiss the insured’s amended complaint seeking business interruption coverage for its losses arising from the governmental suspension of its business operations in response to the coronavirus pandemic, arguing that the policy terms “Covered Cause of Loss” and “direct physical loss” are not the same (Prime Time Sports Grill, Inc. v. DTW 1991 Underwriting Limited, No. 20-00771, M.D. Fla.).

  • May 22, 2020

    Kentucky Panel Affirms No Coverage Owed For Fatal ATV Accident

    FRANKFORT, Ky. — The Kentucky Court of Appeals on May 22 affirmed a lower court’s ruling that a homeowners insurer has no duty to defend its insured against an underlying wrongful death lawsuit arising from a fatal all-terrain vehicle (ATV) accident, finding that the exception to  a policy exclusion for the use of “motorized land conveyances” does not apply (Natasha Marshall, et al. v. Kentucky Farm Bureau Mutual Insurance Company, No. 2019-001059, Ky. App., 2020 Ky. App. LEXIS 62).

  • May 26, 2020

    Insured’s Appeal In Oil, Gas Well Suit Dismissed For Lack Of Jurisdiction

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 12 dismissed an insured’s appeal for lack of jurisdiction after determining that a district court’s ruling that coverage is excluded for damage to an oil and gas well was not a final and appealable order (CBX Resources LLC v. ACE American Insurance Co., et al., No. 18-50740, 5th Cir.).

  • May 22, 2020

    California Insurance Code Section 533.5 Is ‘Unconstitutional,’ Insureds Argue In D&O Coverage Suit

    SAN FRANCISCO — Insureds recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that held, under California Insurance Code Section 533.5, that a directors and officers liability insurer has no duty to defend or indemnify them against an underlying unfair competition and false advertising lawsuit brought by the California attorney general (Adir International LLC et al. v. Starr Indemnity and Liability Company, No. 19-56320, 9th Cir.).

  • May 22, 2020

    Insurer: Bad Faith Damages Claim Barred; Arbitration Award Stands

    ATLANTA — An insurance company on May 18 filed a brief in the 11th Circuit U.S. Court of Appeals contending that the claims of attorneys suing it for bad faith are barred by collateral estoppel.  The insurer also contends that the district court correctly ruled that the attorneys were not permitted to seek damages that were “fully litigated” but not awarded in arbitration (Abbey Kaplan, et al. v. Nautilus Insurance Company, No. 19-14820, 11th Cir.).

  • May 22, 2020

    Illinois Panel:  Stay Of Insurer’s Declaratory Judgment Suit Was ‘Unwarranted’

    SPRINGFIELD, Ill. — An Illinois appeals panel on May 21 held that a lower court abused its discretion when it granted an insured’s motion to stay a commercial general liability insurer’s declaratory judgment lawsuit disputing coverage for an underlying Lanham Act lawsuit brought against the insured, reversing the lower court (Pekin Insurance Company v. KCJ Consulting, Inc., et al., No. 4-19-0831, Ill. App., 4th Dist., 2020 Ill. App. Unpub. LEXIS 888).

  • May 22, 2020

    Professional Liability Insurer Owes $3.8M For Settlement, Did Not Act In Bad Faith

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 21 held that a professional liability insurer did not act in bad faith but owes indemnification for the $3.8 million balance of a $4.3 million settlement of an underlying lawsuit alleging errors and omissions in the insureds’ management of a trust account (Bradley D. Sharp v. Evanston Insurance Company, et al., Nos. 18-56565 and 18-56566, 9th Cir., 2020 U.S. App. LEXIS 16232).

  • May 22, 2020

    Cal Alumnus Dismisses Insurer In Suit Over Canceled Cruise Due To Pandemic

    SAN FRANCISCO — A University of California alumnus on May 19 notified a California federal court that he voluntarily dismissed a travel insurer from his breach of contract and bad faith class complaint arising from a deluxe travel company’s failure to provide a refund for a cruise canceled because of the novel coronavirus pandemic and the insurer’s subsequent denial of trip cancellation benefits (Guy Saperstein v. Thomas P. Gohagan & Company, et al., No. 20-03143, N.D. Calif.).

  • May 22, 2020

    Insured’s Bad Faith Counterclaim Violated Anti-SLAPP Statute, Panel Told

    SAN FRANCISCO — A federal district court erred in declining to strike a bad faith counterclaim in an excess insurance lawsuit because the counterclaim, which was based on an insurer’s rescission and payment recoupment claims, was a retaliatory claim under California’s strategic lawsuit against public participation (anti-SLAPP) statute, the insurer argues in a May 13 appellant brief filed in the Ninth Circuit U.S. Court of Appeals (RLI Insurance Co. v. Langan Engineering, Environmental, Surveying and Landscape Architecture D.P.C., et al., No. 19-17545, 9th Cir.).

  • May 22, 2020

    Montana High Court:  Court Properly Exercised Personal Jurisdiction Over Insurer

    HELENA, Mont. — The Montana Supreme Court on May 19 held that a lower court properly exercised personal jurisdiction over an insurer under Montana's long-arm statute and the due process clause of the 14th Amendment, affirming the lower court’s denial of the insurer’s motion to dismiss the insureds’ breach of contract lawsuit seeking coverage for an underlying class action employment dispute (Gateway Hospitality Group Inc., et al. v. Philadelphia Indemnity Insurance Company, No. DA 19-0502, Mont. Sup., 2020 Mont. LEXIS 1460).

  • May 21, 2020

    Judge: Insurer’s Removal Of Restaurant’s Coronavirus Coverage Suit Is ‘Deficient’

    PITTSBURGH — A federal judge in Pennsylvania on May 19 held that a business insurer’s removal of a restaurant insured’s lawsuit seeking recovery of its damage caused by the novel coronavirus pandemic and governmental closure orders is “deficient,” further declining to exercise subject matter jurisdiction under the Declaratory Judgment Act because the insured’s complaint “raises novel insurance coverage issues under Pennsylvania law which are best reserved for the state court to resolve in the first instance” (DiAnoia’s Eatery LLC v. Motorists Mutual Insurance Co., No. 20-706, W.D. Pa.).

  • May 21, 2020

    Missouri Panel Affirms Dismissal Of Coverage Suit Arising From Alleged Stabbing

    KANSAS CITY, Mo. — A Missouri appeals court on May 19 affirmed a lower court’s judgment in favor of a security company’s insurer in a garnishment, breach of contract and bad faith lawsuit arising from an underlying personal injury claim that resulted in a $3 million arbitration award (David McConnell, et al. v. West Bend Insurance Company, No. WD82865, Mo. App., Western Dist., 2020 Mo. App. LEXIS 661).

  • May 20, 2020

    Roundup Of Briefs, Complaints And Governmental Orders Over Coronavirus Coverage

    A nonprofit's amicus curiae brief calling an insurer’s dismissal motion one of the “earliest challenges” to coronavirus claims is just one of the many pleadings relating to business interruption coverage for COVID-19 that have inundated state and federal courts across the country.

  • May 19, 2020

    Amicus Curiae: Dismissal Motion Is One Of Earliest Challenges To Coronavirus Claims

    TAMPA, Fla. — A nonprofit organization on May 18 moved for leave to appear as amicus curiae in support of a sports bar insured’s response to a commercial property insurer’s motion to dismiss the insured’s amended complaint seeking business interruption coverage for its losses arising from the governmental suspension of its business operations in response to the coronavirus pandemic (Prime Time Sports Grill, Inc. v. DTW 1991 Underwriting Limited, No. 20-00771, M.D. Fla.).