Mealey's Emerging Insurance Disputes

  • August 28, 2019

    Panel: Claims Are Potentially Subject To Employment Practices Liability Coverage

    SANTA ANA, Calif. — A California appeals panel on Aug. 27 held that a lower court erred in finding that an employment practices liability insurance policy’s wage-and-hour exclusion bars coverage for an underlying lawsuit brought against the owner and operator of more than 250 Pizza Hut and Wing Street restaurants, finding that many of the underlying allegations are potentially subject to coverage (Southern California Pizza Co., LLC v. Certain Underwriters at Lloyd's, London, No. G056243, Calif. App., 4th Dist., Div. 3, 2019 Cal. App. Unpub. LEXIS 5712).

  • August 28, 2019

    Panel: Insured’s Conduct ‘Cannot Reasonably Be Deemed An Accident’ Under Policy

    FRESNO, Calif. — A California appeals panel on Aug. 27 held that an insured’s conduct “cannot reasonably be deemed an accident,” affirming a lower court’s ruling that a homeowners insurer did not breach its duty to defend against an underlying lawsuit alleging elder abuse, assault with a deadly weapon and intentional infliction of emotional distress against the insured (Michael Komin v. Travelers Property Casualty, No. F075381, Calif. App., 5th Dist., 2019 Cal. App. Unpub. LEXIS 5713).

  • August 28, 2019

    Panel: Insureds Did Not Show They Owned $1.7M In Undelivered Fine Wine

    DENVER — The 10th Circuit U.S. Court of Appeals on Aug. 28 held that there is no insurance coverage for $1.7 million in 2,448 bottles of undelivered fine wine because the insureds did not present adequate evidence that they were the owners of any wine bottles that were not delivered to them, affirming a lower court’s summary judgment ruling in favor of the insurer on different grounds (Malik M. Hasan, et al. v. AIG Property Casualty Co., No. 18-1309, 10th Cir., 2019 U.S. App. LEXIS 25761).

  • August 28, 2019

    Judge: Intellectual Property Exclusion Bars Coverage For Copyright Infringement Suit

    NEW YORK — A federal judge in New York on Aug. 26 held that a commercial general liability insurance policy’s intellectual property (IP) exclusion bars coverage for an underlying copyright infringement lawsuit against an insured, rejecting the insured’s argument that the exclusion’s “advertising exception” applies (Spandex House, Inc. v. Hartford Fire Insurance Company, et al., No. 18-8367, S.D. N.Y., 2019 U.S. Dist. LEXIS 144646).

  • August 28, 2019

    Commissioner Orders State Farm To Stop Imposing Hurricane Duration Deductible

    BATON ROUGE, La. — The commissioner of the Louisiana Department of Insurance on Aug. 20 issued a cease-and-desist order and a notice of proposed regulatory action against State Farm Fire and Casualty Co. after receiving notice of a complaint that the insurer is imposing a hurricane duration deductible on claims made by its insureds for Hurricane Barry losses that allegedly occurred before the hurricane duration period.

  • August 27, 2019

    Federal Judge: No Excess Coverage Owed For Attack At Kissimmee, Fla., Hotel

    ORLANDO, Fla. — A federal judge in Florida on Aug. 26 held that a commercial general liability insurance policy’s $25,000 coverage limit for assault claims is a "sublimit of liability" and, as a result, an excess insurer owes no coverage for an underlying assault against a guest of the hotel insured (Starstone National Insurance Company v. Polynesian Inn, LLC, et al., No. 18-1048, M.D. Fla., 2019 U.S. Dist. LEXIS 144507).

  • August 26, 2019

    Coverage Suit Over Injury Arising From World War II Demonstration Dismissed

    PORTLAND, Ore. — A federal magistrate judge in Oregon on Aug. 19 dismissed with prejudice a coverage dispute for an underlying personal injury lawsuit arising from a demonstration involving the firing of a projectile from a World War II-era tank destroyer after the parties filed a stipulation to dismiss all claims (Scottsdale Insurance Co. v. National Wings & Armor Foundation, et al., No. 17-01407, D. Ore.).

  • August 26, 2019

    Insurer Owes No Defense For Pill Mill Claims, Maryland Panel Affirms

    ANNAPOLIS, Md.— The Maryland Court of Special Appeals on Aug. 20 affirmed a lower court’s finding that an insurer has no duty to defend against an underlying lawsuit alleging that its insureds participated in a scheme to mass market and distribute “powerful and addictive prescription opioid painkillers” for their financial gain (Rosen-Hoffberg Rehabilitation and Pain Management Associates, P.A., et al. v. Medical Mutual Liability Insurance Society of Maryland, No. 713, September Term, 2018, Md. App., 2019 Md. App. LEXIS 711).

  • August 23, 2019

    Assault And Battery Exclusion Bars Coverage In Suit Over Shooting, Majority Affirms

    CINCINNATI — A majority of the Sixth Circuit U.S. Court of Appeals on Aug. 22 affirmed a lower federal court’s ruling that an insurance policy’s assault and battery exclusion bars coverage for underlying claims that a nightclub owner insured’s failed to protect six people from a foreseeable harm, further concluding that the lower court did not abuse its discretion in exercising jurisdiction over the lawsuit pursuant to the Declaratory Judgment Act (United Specialty Insurance Company v. Cole's Place, Inc., No. 18-5545, 6th Cir., 2019 U.S. App. LEXIS 25064).

  • August 23, 2019

    No Coverage Owed For Defamation Suit Against Attorney, Federal Judge Says

    GRAND RAPIDS, Mich. — Granting a business owners insurer’s motion for summary judgment, a federal judge in Michigan on Aug. 9 held that a policy endorsement “unambiguously excises ‘personal and advertising injury’ from the policy” (Allstate Insurance Company v. Bryan Punturo, et al., No. 18-326, W.D. Mich., Southern Div., 2019 U.S. Dist. LEXIS 134842).

  • August 21, 2019

    Insurers: Hurricane Maria Damages Were Not Caused By Peril Other Than Windstorm

    ST. CROIX, Virgin Islands — Two commercial property insurers on Aug. 16 filed a declaratory judgment lawsuit against their shopping mall insured in a federal court in the Virgin Islands, alleging that the insured has failed to establish that its more than $12.4 million in alleged Hurricane Maria damage was caused by covered perils that are not subject to the policies’ $3.25 million windstorm limit (Great Lakes Insurance S.E., et al. v. Sunshine Shopping Center, Inc., No. 19-00039, D. Virgin Islands).

  • August 21, 2019

    10th Circuit Affirms No Coverage For Uber Driver’s Injuries On Return Journey

    DENVER — The 10th Circuit U.S. Court of Appeals on Aug. 20 affirmed a lower federal court’s ruling that two business auto coverage insurance policies do not provide coverage for the accident injuries sustained by a ride-share driver during her return journey from completing her fare (Bonni J. Genzer v. James River Insurance Company, No. 18-6105, 10th Cir., 2019 U.S. App. LEXIS 24732).

  • August 20, 2019

    9th Circuit Affirms Dismissal Of UCL Claim Against Insurer

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 16 found that an insurer’s purported statements and conduct in denying an insured’s claim were not fraudulent or unfair under California's unfair competition law (UCL), affirming a lower court’s dismissal of an insured’s lawsuit without leave to amend (Deborah Quattrocchi, v. Allstate Indemnity Company, No. 18-15208, 9th Cir., 2019 U.S. App. LEXIS 24514).

  • August 20, 2019

    Panel Affirms Ruling In Insurer’s Favor In Suit Brought By Company’s Directors

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Aug. 16 affirmed a lower court’s summary judgment ruling in favor of a directors and officers liability insurer in a coverage lawsuit arising from underlying claims that an energy company’s subsidiary breached a finance agreement and contractual warranties, finding that the lower court properly held that the insured’s directors did not satisfy their burden of proving an allocation of the underlying costs that was different from the one proposed by the insurer (John Brand, et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 18-1372, 8th Cir., 2019 U.S. App. LEXIS 24488).

  • August 19, 2019

    Insured, Assignee Ask 9th Circuit To Reverse Dismissal Of Bad Faith Insurance Suit

    PASADENA, Calif. — An insured and his assignee, who were involved in a motor vehicle accident, recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of their bad faith lawsuit against the insured’s personal automobile insurer, arguing that the insurer “unreasonably rejected” the assignee’s $100,000 policy limits settlement offer by failing to comply with the terms of the offer (Ethan Volungis, et al v. Liberty Mutual Fire Insurance, No. 18-16600, 9th Cir.).

  • August 19, 2019

    Insurer Asks Florida High Court To Find That It Has Standing To Sue Counsel

    TALLAHASSEE, Fla. — After a Florida appeals court certified a question of “great public importance” to the Florida Supreme Court, an insurer recently told the Florida high court that it has standing to maintain a malpractice lawsuit against counsel who was hired to represent its insured where it has a duty to defend (Arch Insurance Company v. Kubicki Draper LLP, No. 19-673, Fla. Sup.).

  • August 16, 2019

    Panel Certifies Question To Arizona High Court In Suit Over Backdating Litigation

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Aug. 15 certified a question to the Arizona Supreme Court in a dispute over whether an insurer was obligated to fund a settlement reached in underlying backdating litigation, staying the lawsuit until the question is answered (Apollo Education Group, Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa, No. 17-17293, 9th Cir., 2019 U.S. App. LEXIS 24300).

  • August 14, 2019

    Vermont High Court:  Claims Failed To Trigger Errors And Omissions Liability Coverage

    MONTPELIER, Vt. — The Vermont Supreme Court on Aug. 9 affirmed a lower court’s ruling that a vendor’s underlying lawsuit alleging that an engineering and project-management firm breached its commission and teaming agreements did not trigger an insurance policy’s errors and omissions liability coverage (Integrated Technologies, Inc. v. Crum & Forster Specialty Insurance Company, No. 18-262, Vermont Sup., 2019 Vt. LEXIS 105).

  • August 14, 2019

    Majority Affirms Ruling In Favor Of Excess Directors, Officers Liability Insurer

    SAN FRANCISCO — A majority of a Ninth Circuit U.S. Court of Appeals panel on Aug. 12 affirmed a lower court’s summary judgment ruling in favor of a first-level excess directors and officers liability insurer on a software company insured’s breach of contract and bad faith claims, finding that the insured was not liable for any portion of an underlying settlement and the insured’s alleged breach was not the proximate cause of the insured’s purported damages (Genesis Insurance Co. v. National Union Fire Insurance Company of Pittsburgh, Pa., et al., No. 17-17362, 9th Cir., 2019 U.S. App. LEXIS 23956).

  • August 13, 2019

    Judge Awards Law Firm Attorney Fees In Professional Liability Coverage Dispute

    LOS ANGELES — A federal judge in California on Aug. 1 awarded Dickstein Shapiro $346,697.50 in reasonable attorney fees in a dispute over professional liability coverage for an underlying $17.5 million settlement of a malpractice lawsuit brought against one of the law firm’s former partners and denied an excess insurer’s motion for reconsideration of a previous ruling as to coverage allocation (Scottsdale Insurance Company v. Dickstein Shapiro LLP, et al., No. 18- 02893, C.D. Calif., 2019 U.S. Dist. LEXIS 133045).