Mealey's Emerging Insurance Disputes

  • July 07, 2021

    Court Prematurely Dismissed COVID-19 Coverage Suit, Florida Restaurant Argues

    ATLANTA — A Florida restaurant owner in a July 2 brief argues that its insurance policy contemplates recovery for its lost income caused by business interruption when its business activities are suspended due to direct physical loss or damage, asking the 11th Circuit U.S. Court of Appeals to reverse a lower federal court’s “overhasty” dismissal of its coronavirus coverage lawsuit.

  • July 06, 2021

    New York Justice Grants Insurer’s Motion To Dismiss Coronavirus Coverage Suit

    BROOKLYN, N.Y. — A New York justice on July 2 granted an insurer’s motion to dismiss a pizza place insured’s breach of contract lawsuit seeking coverage for its business losses and extra expenses stemming from the coronavirus pandemic, finding that the insurer’s documentary evidence “is of undisputed authenticity, unambiguous and undeniable, and has established defenses to the plaintiff’s claims as a matter of law, requiring dismissal of the complaint.”

  • July 06, 2021

    8th Circuit Affirms No Coverage For Oral Surgeons’ Losses Arising From COVID-19

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on July 2 affirmed a lower federal court’s dismissal of Oral Surgeons PC’s lawsuit seeking business interruption coverage for its losses arising from its closure prompted by the coronavirus pandemic, finding that the insured fails to allege any physical alteration of its property to trigger coverage.

  • July 02, 2021

    Federal Judge Rules For Insurer In Hampton Hotel Owner’s COVID-19 Coverage Suit

    OKLAHOMA CITY — A federal judge in Oklahoma on June 28 granted an insurer’s motion for summary judgment in a declaratory judgment lawsuit brought by the owner and operator of a Hampton Inn seeking overage for its losses arising from the slowdown of its business in the wake of the coronavirus pandemic, finding that the term “direct physical loss” is not ambiguous and that the insurer’s “proffered interpretation is the only reasonable one.”

  • July 02, 2021

    Judge: Virus Exclusions Bar Coverage For Business Losses Caused By Coronavirus

    WATERBURY, Conn. — A Connecticut judge on June 15 granted an insurer’s motion for summary judgment in its lawsuit disputing coverage for its insureds’ business losses arising from the coronavirus pandemic, finding that a package policy’s New York-related virus exclusion bars all of the insureds’ losses in New York and that the general virus exclusion applies to all of their other claimed losses.

  • July 02, 2021

    No Coverage Owed For Cleanup Of Methamphetamine Contamination, Panel Says

    ST. LOUIS — The Second Division Eastern District Missouri Court of Appeals on June 29 affirmed a trial court’s finding that no coverage is owed for the cleanup of methamphetamine contamination because the policy’s law and ordinance provision bars coverage for the cleanup of pollutants necessary to comply with an ordinance or law.

  • July 01, 2021

    Judge: Boscov’s Losses ‘Bear No Causal Connection’ To Properties’ Physical Condition

    ALLENTOWN, Pa. — A federal judge in Pennsylvania on June 29 held that although Boscov's Department Store Inc.’s business has undoubtedly been impacted by the coronavirus pandemic, its “alleged losses bear no causal connection to the physical condition of its properties,” granting an insurer’s motion for judgment on the pleadings in Boscov’s breach of contract and bad faith lawsuit.

  • July 01, 2021

    Insurer Reasonably Believed Policy Did Not Cover Insured’s Conduct, Majority Rules

    DENVER — A majority of the Seventh Circuit U.S. Court of Appeals on June 29 affirmed a lower federal court’s summary judgment ruling in favor of an insurer as to a third-party complaint alleging that the insurer breached its fiduciary duties and breached the implied covenant of good faith and fair dealing by not settling an underlying aggravated assault lawsuit within policy limits, finding that the insurer reasonably believed that the policy did not cover the insured’s conduct because it knew the insured pleaded guilty to aggravated assault and knew the underlying complaint alleged intentional conduct in part.

  • June 30, 2021

    Default Judgment Awarded To Insurer In Fraud Suit Against Insured’s Employee

    FRESNO, Calif. — A federal judge in California on June 28 adopted a federal magistrate judge’s recommendation that an entry of default be entered against an insured’s employee in an insurer’s lawsuit alleging that the employee misappropriated $263,888 from its insured, ruling that the magistrate judge’s findings and recommendation were supported by the record and that the magistrate judge conducted a sufficient analysis of the facts.

  • June 30, 2021

    Fund Owes More Than $1M In Indemnity Coverage, S.C. Majority Rules In Reversal

    COLUMBIA, S.C. — A majority of the South Carolina Supreme Court on June 16 held that a town’s negligent acts of hiring, retaining and supervising a police officer and the police officer’s use of deadly force to kill the town’s former mayor are separate occurrences under the terms of the town’s insurance policy, reversing an appeals court’s determination as to the amount of indemnity coverage available and vacating its finding that a bad faith claim against the insurer is barred by the South Carolina Tort Claims Act.

  • June 30, 2021

    Panel Affirms Denial Of Insurers’ Motion To Intervene In Arbitration Proceeding

    ST. LOUIS — A Missouri appeals panel on June 29 held that the plain and unambiguous language of Missouri Revised Statutes Section 537.65.2 did not afford insurers the right to intervene as of right in a proceeding confirming a $11,437,009.90 arbitration award in an employment dispute with their insured.

  • June 29, 2021

    Ambiguities In Policy Warrant Reversal Of No Coverage Ruling, 7th Circuit Says

    CHICAGO — Reversing a lower court’s summary judgment ruling that the insurer has no duty to defend against an underlying negligence lawsuit brought against the operator of a horse farm and equestrian center and its employee and vacating the lower court’s finding that the insurer had a duty to indemnify, the Seventh Circuit U.S. Court of Appeals on June 28 interpreted the ambiguous policy as a commercial general liability insurance policy that provided coverage for the underlying claims.

  • June 29, 2021

    Indemnification Provision Violates Public Policy, Alabama Majority Affirms

    MONTGOMERY, Ala. — A majority of the Alabama Supreme Court on June 25 held that the indemnification provision contained in a Temporary Services Agency Agreement between a steel manufacturing facility and a personnel staffing agency violated public policy and is, therefore, void and a general liability insurer had a legitimate reason for denying coverage for an underlying wrongful death lawsuit.

  • June 29, 2021

    Judge:  ‘Single Claim’ Policy Language Defeats Contractor’s Coverage Suit

    DETROIT — A county commission’s claims against a contractor for faulty construction design work for a water runoff drainage project are part of a “single claim” that was made outside of a claims-made insurance policy’s coverage period, so the insurer is entitled to summary judgment in the contractor’s coverage lawsuit, a Michigan federal judge ruled June 23.

  • June 29, 2021

    Judge Remands Spa’s Suit Against Professional Liability Insurer To Jersey Court

    CAMDEN, N.J. — A federal judge in New Jersey on June 24 granted a beauty spa insured’s motion to remand its lawsuit seeking a declaration that its professional liability insurer has a duty to defend and indemnify it against underlying claims that one of its employees perpetuated a sexual act against one of its former customers, finding that complete diversity does not exist.

  • June 29, 2021

    Delaware Judge Dismisses 1 Insurer From Private Equity Firms’ Coverage Suit

    WILMINGTON, Del. — Three days after the parties filed a stipulation of dismissal, a Delaware judge on June 24 dismissed one insurer from private equity firm insureds’ lawsuit seeking coverage for their $120 million settlement with the bankruptcy estate of a retail fashion holding company they acquired.

  • June 29, 2021

    Panel:  Subcontractor’s Contribution Liability To Contractor Barred From Coverage

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on June 28 affirmed a lower federal court’s ruling in favor of an insurer in its lawsuit seeking a declaration that its workers’ compensation and employers liability insurance policy obligated it to pay nothing more for a construction site injury than the amounts that the Illinois workers’ compensation law required its subcontractor insured to pay its injured employees, finding that the insured’s liability in contribution to the contractor was specifically excluded from the coverage.

  • June 29, 2021

    Panel Affirms Summary Judgment Ruling In Favor Of Professional Liability Insurer

    ATLANTA — The 11th Circuit U.S. Court of Appeals on June 28 affirmed a lower federal court’s summary judgment ruling in favor of a professional liability insurer in a coverage dispute arising from underlying claims that attorney insureds helped a client perpetuate a Ponzi scheme, finding that the insureds’ claim for underlying fees and costs is barred by the doctrine of collateral estoppel and that the insureds failed to provide sufficient evidence that the insurer’s alleged bad faith caused their damages from lost profits.

  • June 28, 2021

    Attorney: Judgment Was Not ‘Collectable’ Under Insolvent Insurer’s CGL Policy

    LOS ANGELES — A law firm and its attorney who were sued for professional negligence tell a California appeals court in a May 26 brief that an underlying $3.5 million default judgment against a contractor was not “collectable” under a commercial general liability insurance policy even if the insurer had not gone into receivership, seeking affirmance of a lower court’s ruling in their favor arising from clients’ claims that they would have been able to collect a $2 million judgment against the insurer but for the law firm and attorney’s lack of due diligence in obtaining the default judgment against the contractor.

  • June 28, 2021

    Insurer Seeks Interlocutory Appeal Of Court’s Refusal To Dismiss Duke’s Lawsuit

    ELIZABETH, N.C. — An excess insurer on June 18 moved for a federal court in North Carolina to certify for interlocutory appeal its June 8 order refusing to dismiss Duke University’s suit seeking coverage for underlying antitrust claims.