CHICAGO — An Illinois appeals panel on June 5 held that commercial general liability insurance coverage for an underlying incident that occurred at a Chicago nightclub insured’s parking lot is barred by the policy’s “assault and battery” and “firearms” exclusions, reversing a lower court (Markel International Insurance Company Limited v. Amber Montgomery, et al., No. 1-19-1175, Ill. App., 1st Dist., 6th Div., 2020 Ill. App. Unpub. LEXIS 990).
DENVER — The 10th Circuit U.S. Court of Appeals on June 10 affirmed a district court’s ruling that an insurer owes no coverage for the spraying of pesticides because the policy’s pollution exclusion clearly bars coverage (MJH Properties LLC v. Westchester Surplus Lines Insurance Co., No. 20-6002, 10th Cir., 2020 U.S. App. LEXIS 18209).
STANISLAUS, Calif. — A hotel operator insured on June 4 filed a class action complaint for breach of contract and declaratory relief against insurers for denying business interruption coverage claims, alleging that they have proven during the novel coronavirus pandemic that their “solid reputation for doing the right thing for the right reason” is undeserved (American Traders Inc. v. Mid-Century Insurance Company, et al., No. 20-002477, Calif. Super., Stanislaus Co.).
ATLANTA — An insured’s assignee recently asked the 11th Circuit U.S. Court of Appeals to reverse a federal district court’s finding that coverage for an underlying $60,413,112 consent judgment entered against the insured in a Telephone Consumer Protection Act (TCPA) violation dispute is barred by the insurance policy's “invasion of privacy” exclusion (Jacob Horn, et al. v. Liberty Insurance Underwriters, Inc., No. 19-12525, 11th Cir.).
LOS ANGELES — A class action complaint for breach of contract, bad faith and violations of California Business and Professions Code Sections 17200 and 17500 was filed against a travel insurer in a California federal court on June 2, alleging that the insurance policy “specifically provides coverage benefits for trip cancellation due to various stated occurrences, including ‘Being hijacked or Quarantined’” (Richard Robbins v. Generali Global Assistance, Inc., et al., No. 20-04904, C.D. Calif.).
DES MOINES, Iowa — The Iowa Supreme Court on June 5 reversed a lower court’s summary judgment ruling in favor of a commercial general liability insurer in its lawsuit disputing coverage for an underlying gross negligence lawsuit brought by the estate and spouse of an employee who was fatally injured while he was an employee of the amusement park insured (T.H.E. Insurance Company v. Stuart R. Glen, et al., No. 18-1550, Iowa Sup., 2020 Iowa Sup. LEXIS 64).
BOSTON — A majority of a Massachusetts appeals court held June 5 that there are genuine issues of material fact regarding whether a warehouse legal liability insurance policy’s emergency removal coverage extension that a broker could have obtained for a cold storage facility would have provided coverage for spoilage to frozen snow crab that occurred when it was removed from one of the facility’s freezers after a forklift accident, vacating a lower court’s ruling in favor of the broker and remanding for further proceedings (Whitecap International Seafood Exporters Inc. v. Eastern Insurance Group LLC, No. 18-P-1570, Mass. App., 2020 Mass. App. LEXIS 66).
PHILADELPHIA — An insurer on June 5 moved for judgment on the pleadings in a Pennsylvania federal court challenging a restaurant owner insured’s complaint seeking a declaration 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.).
RIVERSIDE, Calif. — A California appeals panel on June 3 affirmed a lower court’s ruling that a landlord’s commercial general liability insurer has no duty to defend against an underlying personal injury lawsuit because the landlord had not paid the required $250,000 self-insured retention and its policy was excess to a tenant’s CGL policy pursuant to the “other insurance” clause (State Farm General Insurance Company v. Columbia Casualty Company, No. E072918, Calif. App., 4th Dist., Div. 2, 2020 Cal. App. Unpub. LEXIS 3475).
NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on June 4 denied an insurer’s petition to rehear a professional liability coverage dispute, standing by a previous reversal of a lower federal court’s ruling in favor of the insurer in its lawsuit challenging coverage for an underlying malpractice claim brought against its attorney insured (Landmark American Insurance Company v. Lonergan Law Firm, P.L.L.C., et al., No. 19-10385, 5th Cir.).
PHILADELPHIA — A Philadelphia law firm sued its insurer for breach of contract in a Pennsylvania court on May 26, seeking a declaration that it has a duty to provide “Business Income” and “Civil Authority” coverage for its continuing operating expenses due to the novel coronavirus pandemic and the resulting closure of its offices (Spector Gadon Rosen Vinci P.C. v. Valley Forge Insurance Company, No. 00501636, Pa. Comm. Pls., Philadelphia Co.).
LOS ANGELES — A law firm insured on June 2 asked a federal court in California to dismiss or, alternatively, stay a business owners 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.).
By Peter B. Steffen and John M. O’Bryan
PITTSBURGH — One day after an insurer filed an amended and renewed notice of removal of a restaurant insured’s lawsuit seeking recovery of its damage caused by the novel coronavirus pandemic and governmental closure orders, a federal judge in Pennsylvania on May 27 dismissed the amended notice of removal for lack of jurisdiction (DiAnoia’s Eatery LLC v. Motorists Mutual Insurance Co., No. 20-706, W.D. Pa.).
From insurers seeking dismissal of novel coronavirus coverage lawsuits to the proposed Pandemic Risk Insurance Act bill, Mealey Publications takes a look at the latest pleadings relating to business interruption coverage for COVID-19.
CHARLESTON, S.C. — A federal judge in South Carolina on May 29 denied without prejudice an insured’s motion to compel a professional liability insurer to produce its communications with outside counsel, rejecting the insured’s argument that the insurer waived its attorney-client privilege over the communications (Susan Harriman v. Associated Industries Insurance Company, Inc., No. 18-02750, D. S.C., 2020 U.S. Dist. LEXIS 93649).
KANSAS CITY, Kan. — Retailer insureds on May 22 sued their all-risk commercial property insurers for breach of contract in a federal court in Kansas, alleging that the insurers are part of an industry that has taken a “uniform approach” to the novel coronavirus pandemic by denying coverage even when the policy does not include an exclusion for losses related to a pandemic or virus (RPR Enterprises, Inc. et al. v. Continental Western Group, LLC, et al., No. 20-02256, D. Kan.).
WASHINGTON, D.C. —Restaurant owners on May 4 moved for expedited summary judgment the same day they filed a lawsuit against their all-risk insurer in a District of Columbia court, arguing that the loss of use of their properties due to the novel coronavirus and related governmental orders constitutes “direct physical loss” under their insurance policies and asserting that this “is clearly a case in which justice delayed is justice denied” (Rose’s 1, LLC, et al. v. Erie Insurance Exchange, D.C. Super.).
PHILADELPHIA — A federal judge in Pennsylvania on June 1 denied a law firm insured’s former client motion to intervene in its professional liability insurer’s lawsuit seeking a declaration as to coverage for an underlying malpractice lawsuit (Allied World Insurance Co. v. Kenney & McCafferty, P.C., et al., No. 20-00469, E.D. Pa., 2020 U.S. Dist. LEXIS 95663).
CHICAGO — An Illinois appeals panel on May 28 affirmed a lower court’s finding that a directors and officers liability insurer did not act vexatiously or unreasonably when it denied coverage for an underlying lawsuit alleging breach of fiduciary duty, minority member oppression, breach of the covenant of good faith and fair dealing and civil conspiracy, finding that the existence of a bona fide dispute precludes recovery for bad faith (Nine Group II, LLC, et al. v. Liberty International Underwriters, Inc., No. 19-0320, Ill. App., 1st Dist., 4th Div., 2020 Ill. App. Unpub. LEXIS 927).