Mealey's Emerging Insurance Disputes

  • July 07, 2020

    Yahoo Claims District Court Erred In Enforcing Deductible Coverage Endorsement

    SAN FRANCISCO — A California federal judge erred in allowing a commercial general liability insurer to enforce its policy’s deductible coverage endorsement because enforcing the endorsement in the data privacy coverage dispute ignores the plan language of the policy, the insured contends in a May 18 brief to the Ninth Circuit U.S. Court of Appeals (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 19-16475, 9th Cir.).

  • July 07, 2020

    Insured Reinforces ‘Forum Shopping’ Argument In Coronavirus Coverage Suit

    LOS ANGELES — A law firm insured on July 6 replied to a business owners insurer’s opposition to its earlier motion asking a federal court in California to dismiss or, alternatively, stay the insurer’s lawsuit seeking a declaration that the presence or suspected presence of the novel coronavirus does not constitute “direct physical loss or damage” to trigger coverage for the insured’s claimed loss of income (Travelers Casualty Insurance Company of America v. Geragos & Geragos, No. 20-03619, C.D. Calif.).

  • July 07, 2020

    District Court Erred In Finding No Duty To Defend Exists For TCPA Claims, Insured Says

    CHICAGO — The Seventh Circuit U.S. Court of Appeals should reverse an Illinois federal judge’s ruling in favor of an insurer in a coverage dispute arising from underlying claims that its insured violated the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA) because the judge incorrectly found that the underlying claims are excluded from coverage, the insured says in a June 15 appellant brief (Zurich American Insurance Company, et al. v. Ocwen Financial Corporation, et al., No. 17-2873, N.D. Ill., 2018 U.S. Dist. LEXIS 175023).

  • July 07, 2020

    Property Insurer Breached Contract, Acted In Bad Faith In Denying COVID-19 Claim

    PHILADELPHIA — A property insurer breached its contract and acted in bad faith in using a pollution exclusion to deny coverage for business interruption and extra expenses arising out of the shutdown caused by the COVID-19 pandemic, an insured contends in a June 24 complaint filed in Pennsylvania court (Fegley Management & Energy, LLC, et al. v. The Cincinnati Insurance Co., et al., No. 200601426, Pa. Comm. Pls., Philadelphia Co.).

  • July 06, 2020

    Judge Permits Additional Discovery In Professional Liability Coverage Dispute

    SEATTLE — A federal judge in Washington on July 2 denied without prejudice a professional liability insurer’s motion for summary judgment and granted in part a law firm insured’s motion to continue the insurer’s motion for partial summary judgment to allow the insured to conduct additional discovery in a coverage dispute over underlying legal malpractice claims (Associated Industries Insurance Company, Inc. v. Cole, Wathen, Leid, Hall, P.C., No. 20-cv-00014, W.D. Wash., 2020 U.S. Dist. LEXIS 116847).

  • July 06, 2020

    Dentist Reinforces Argument In Favor Of Staying COVID-19 Suit Pending JPMDL Ruling

    SEATTLE — A dentist insured argues in a June 26 reply that stay of his class action seeking coverage for losses stemming from the interruption of business due to the novel coronavirus pandemic is warranted in “the interest of judicial economy, potential cost savings, and because there will be little, if any, prejudice” to the insurer “during the anticipated short duration of the requested stay” (Mark Germack DDS v. The Dentists Insurance Company, No. 20-00661, W.D. Wash.).

  • July 02, 2020

    Minor League Baseball Teams Voluntarily Dismiss COVID-19 Coverage Dispute

    PHILADELPHIA — Minor league baseball teams on July 2 filed a notice of voluntary dismissal without prejudice of their breach of contract and declaratory relief lawsuit seeking business interruption coverage for their “catastrophic financial losses” stemming from the “first-ever cessation of Minor League Baseball” due to the novel coronavirus pandemic and Major League Baseball’s decision that its teams will not satisfy their contractual duties to provide players under contract to their affiliated teams in the Minor League (Chattanooga Professional Baseball LLC, et al. v. Philadelphia Indemnity Insurance Co., et al., No. 20-03032, E.D. Pa.).

  • July 01, 2020

    Illinois Panel Affirms Court’s Ruling In Dispute Between County, Broker

    CHICAGO — An Illinois appeals panel on June 30 held that a complaint by Cook County, Ill., against its insurance broker was not time-barred and that a lower court did not err in denying the broker’s motion for judgment notwithstanding the verdict on a jury's findings on both breach of contract and setoff, further rejecting the county’s request for an additur on special damages and affirming the lower court’s ruling in favor of the broker on the county’s breach of fiduciary duty claim (County of Cook v. USI Insurance Services Corp of Illinois, Inc., No. 18-1889, Ill. App, 1st Dist., 3rd Div., 2020 Ill. App. Unpub. LEXIS 1169).

  • July 01, 2020

    Insured: Who Bears Risk When Government Orders Business Closed For Over 2 Months?

    BAY CITY, Mich. — A chiropractor insured filed a class action complaint in a Michigan federal court challenging insurers’ “systematic and uniform refusal to pay insureds” for their losses arising from Michigan’s March 24 executive order and related actions that suspended business operations in the wake of the novel coronavirus pandemic (Turek Enterprises, Inc. v. State Farm Mutual Automobile Insurance Company, et al., No. 20-11655, E.D. Mich.).

  • June 30, 2020

    Roundup Of Briefs, Complaints Over Coronavirus Coverage

    From minor league baseball teams’ federal complaint to an insurer’s motion to dismiss, Mealey Publications takes a look at the latest pleadings relating to business interruption coverage for COVID-19.

  • June 30, 2020

    Judge Allows Fraud, NJFCA Claims To Proceed In Suit Challenging Insurer’s Practices

    CAMDEN, N.J. — A federal judge in New Jersey on June 24 denied an insurer’s motion to dismiss an insured’s claims for common-law fraud and violation of the New Jersey Consumer Fraud Act (NJFCA), also denying the insured’s motion to amend his complaint to add a claim under the New Jersey’s Commercial Insurance Deregulation Act (Ira Trocki, et al. v. Penn National Mutual Casualty Insurance Company, Inc., No. 19-13638, D. N.J., 2020 U.S. Dist. LEXIS 111150).

  • June 30, 2020

    Judge: ‘Snafu’ Was Basis For Mishandling Of Corpses; Exclusion Does Not Bar Coverage

    VICTORIA, Texas — A federal judge in Texas on June 25 held that a professional services policy exclusion does not bar coverage for two underlying lawsuits brought against a funeral home insured because the “snafu” that resulted in the insured’s mix-up or corpses was clerical or administrative and not a result of professional services (Ohio Security Insurance Company, et al. v. Grace Funeral Home, Inc., No. 19-0041, S.D. Texas, 2020 U.S. Dist. LEXIS 113222).

  • June 30, 2020

    Day Care Sues Insurer For Bad Faith Handling Of Business Interruption Claim

    BOSTON — An operator of day care centers sued its commercial property insurance provider in Massachusetts federal court on June 29, alleging that the insurer breached its contract with the insured and acted in bad faith in failing to provide business interruption coverage after the day care centers were forced to limit their business operations to families of first responders in response to the commonwealth’s implementation of a stay-at-home order in the wake of the novel coronavirus pandemic (Pakachoag Acres Day Care Center Inc. v. Philadelphia Indemnity Insurance Co., No. 20-40083, D. Mass.).

  • June 30, 2020

    Expenses Incurred In Cleaning Up COVID-19 Contamination, Restaurants Argue

    PHILADELPHIA — Philadelphia restaurants on June 19 sued their insurers for breach of contract and bad faith in a Pennsylvania court, contending that they “have had to incur expenses in cleaning up the pollution and contamination caused by the novel coronavirus and this clean-up continues to the present and likely will continue into the foreseeable future” (The Marathon Grill Inc., et al. v. State Automobile Mutual Insurance Co., et al., No. 200600918, Pa. Comm. Pls., Philadelphia Co.).

  • June 29, 2020

    Judge Issues 2 Rulings In Favor Of Insurers In Coverage Disputes Over DPPA Claims

    WINSTON-SALEM, N.C. — A federal judge in California on June 24 issued two separate rulings granting business liability insurers’ motions for judgment on the pleadings in their lawsuits disputing coverage for underlying claims that their insureds violated the Driver's Privacy Protection Act (DPPA), finding that two policy exclusions “unambiguously bar coverage” (Sentinel Insurance Company Ltd., et al. v. James S. Farrin P.C., et al., No. 17-211, 2020 U.S. Dist. LEXIS 111919; Sentinel Insurance Company Ltd.. v. George Salama D.C., et al., No. 17-328, M.D. N.C., 2020 U.S. Dist. LEXIS 111918).

  • June 29, 2020

    Delaware Law Governs D&O Policies, Federal Judge Says, Stays Coverage Dispute

    WILMINGTON, Del. — After finding that Delaware law governs directors and officers liability insurance policies, a federal judge in Delaware on June 25 stayed a coverage dispute pending the Delaware Supreme Court’s ruling in In re Solera Coverage Appeals (Calamos Asset Management, Inc. v. Travelers Casualty and Surety Company of America, No. 18-1510, D. Del., 2020 U.S. Dist. LEXIS 111895).

  • June 26, 2020

    JPMDL To Hear Oral Arguments In COVID-19 Business Interruptions Suits

    WASHINGTON, D.C. —The U.S. Judicial Panel on Multidistrict Litigation on June 26 issued an order indicating that it will hear oral arguments on July 30 to determine whether the U.S. District Court for the Eastern District of Pennsylvania or the Northern District of Illinois is the better forum to transfer lawsuits seeking business interruption coverage for losses arising from governmental closure orders prompted by the coronavirus pandemic (In re:  COVID-19 Business Interruption Insurance Coverage Litigation, No. 2942, JPMDL).

  • June 26, 2020

    Restaurant Seeks To Stay COVID-19 Coverage Suit Pending JPMDL Ruling

    HARRISBURG, Pa. — A self-proclaimed “mom and pop” South Carolina restaurant owner on June 25 moved a Pennsylvania federal court to stay its class action breach of contract, bad faith and unjust enrichment complaint against its all-risk commercial insurer for “swiftly” denying its claim for coverage for its closure due to the COVID-19 pandemic, arguing that the insurer will suffer no prejudice if the lawsuit is stayed pending the U.S. Judicial Panel on Multidistrict Litigation’s resolution of two motions to transfer “this and nearly 200 other related cases in 38 federal districts” “for centralized pretrial proceedings” (Richard Kahn, et al. v. Pennsylvania National Mutual Casualty Insurance Company, No. 20-00781, M.D. Pa.).

  • June 26, 2020

    No Coverage For Insured’s Criminal Acts, Georgia Majority Affirms

    ATLANTA — A majority of a Georgia appeals court on June 24 held that an insured’s acts that caused underlying injuries were criminal in nature and, as a result, do not trigger coverage under a homeowners insurance policy, affirming a lower court’s grant of summary judgment in favor of the insurer  (Marcus, et al. v. Country Mutual Insurance Co., No. A20A0391, Ga. App., 3rd Div., 2020 Ga. App. LEXIS 383).

  • June 25, 2020

    Ohio Panel Reverses, Remands No Coverage Ruling In Dispute Over Opioid Epidemic

    CINCINNATI — An Ohio appeals court on June 24 reversed and remanded a lower court’s summary judgment ruling in favor of a commercial general liability insurer, finding that some of the underlying losses claimed by governmental entities against a pharmaceutical distributor insured arising from the opioid epidemic are arguably “because of” bodily injury to trigger coverage under the policy (Acuity v. Masters Pharmaceutical, Inc., No. C-190176, Ohio App., 1st Dist., 2020 Ohio App. LEXaIS 2381).