Mealey's Emerging Insurance Disputes

  • June 17, 2019

    No Directors, Officers Liability Coverage For Suit Over Sale Of Equity Securities

    ATLANTA — The 11th Circuit U.S. Court of Appeals on June 13 affirmed a lower federal court’s finding that an exclusion in a Profit Management Liability Insurance Policy excluded directors and officers liability coverage for an underlying lawsuit over the purchase of shares in a beef company insured (Colorado Boxed Beef Co., Inc., et al. v. Evanston Insurance Co., No. 19-10326, 11th Cir., 2019 U.S. App. LEXIS 17696).

  • June 17, 2019

    Majority Affirms Allocation Of $6M Settlement In Product Liability Coverage Dispute

    ST. LOUIS — A majority of the Eighth Circuit U.S. Court of Appeals on June 14 affirmed a lower federal court’s ruling that an excess insurer owes a designer and manufacturer insured $2.76 million for an underlying $6 million settlement of an underlying product liability lawsuit involving defective air ducts, rejecting the excess insurer’s argument that the lower court improperly interpreted the batch clause endorsement (National Union Fire Insurance Company of Pittsburgh, PA, et al. v. Donaldson Company Inc. v. Federal Insurance Co., No. 18-1063, 8th Cir., 2019 U.S. App. LEXIS 17897).

  • June 14, 2019

    Panel:  Policy’s ‘Classification Limitation’ Does Not Bar Coverage For $5M Judgment

    ST. LOUIS — A Missouri appeals panel on June 11 reversed a garnishment court’s finding that an insurance policy’s “Classification Limitation” barred coverage for an underlying $5 million judgment arising from a fatal shooting outside of a night club, finding that the garnishment court was not at liberty to decide whether the night club owner was acting on behalf of another business such that the named insured could not be liable for his negligence (Latronya Adams v. Certain Underwriters at Lloyd's of London, et al., No. ED106121, Mo App., Eastern Dist., Div. 3, 2019 Mo. App. LEXIS 931).

  • June 13, 2019

    New York High Court Affirms Ruling Relieving Auto Insurers Of $20M In Claims

    ALBANY, N.Y. —New York’s highest court on June 11 affirmed an appeals court’s ruling that stood by a jury’s verdict that 54 New York automobile insurers and self-insurers are not responsible for paying $20 million in pending claims because a physician did not own and control the professional medical corporation under whose name he sought to collect first-party no-fault benefits from the insurers, finding that the lower court did not err in declining to give a jury charge that required a finding of fraudulent intent or conduct that was "tantamount to fraud" to reach its verdict in the insurers’ favor (Andrew Carothers, M.D., P.C. v. Progressive Insurance Company, No. 39, N.Y., App., 2019 N.Y. LEXIS 1641).

  • June 11, 2019

    Judge: Insurer Established That Exclusion Limits Coverage For Insured’s Loss

    TACOMA, Wash. — A Washington federal judge on May 31 granted an insurer’s motion to dismiss a lawsuit over the insured’s losses arising from fraudulently diverted funds, rejecting the insured’s argument that a policy exclusion relied on by the insurer is ambiguous (Tidewater Holdings Inc., et al. v. Westchester Fire Insurance Company, No. 18-6006, W.D. Wash., 2019 U.S. Dist. LEXIS 91584).

  • June 11, 2019

    Commercial Insurer Breached Policy By Refusing To Defend Entire Suit, Panel Rules

    ATLANTA — A Georgia appeals court panel on June 5 affirmed a lower court’s ruling in favor of an insured in a commercial insurance coverage dispute, finding that the insurer breached the policy by refusing to defend the entire lawsuit brought against its insured and that its failure to file a declaratory action as to coverage is “fatal to its claims” (Southern Trust Insurance Company v. Mountain Express Oil Company, No. A19A0018, Ga. App., 4th Div., 2019 Ga. App. LEXIS 302).

  • June 11, 2019

    Insured’s Suit Over Damaged Computer Chips Dismissed For Lack Of Jurisdiction

    SAN FRANCISCO — A California federal magistrate judge on June 7 held that a global manufacturer of semiconductor microelectronic devices has failed to demonstrate that 17 foreign underwriters “purposefully availed themselves of the privilege of conducting activities in California,” granting the underwriters’ motion to dismiss the insured’s lawsuit seeking coverage for damaged computer-memory chips and equipment for lack of personal jurisdiction (Micron Technology, Inc., et al. v. Factory Mutual Insurance Company, et al., No. 18-07689, N.D. Calif., 2019 U.S. Dist. LEXIS 96257).

  • June 11, 2019

    9th Circuit Majority Finds Sexual Molestation Exclusion Bars Coverage, Reverses

    PASADENA, Calif. — A majority of the Ninth Circuit U.S. Court of Appeals on June 10 held that a sexual molestation exclusion in a renter insurance policy’s child care liability endorsement expressly excluded coverage for the operator of a small child-care facility for claims arising from acts of sexual molestation committed by her adult son “regardless of the theory for liability” (Holly Bayes v. State Farm General Insurance Company, No.  17-56035, 9th Cir.).

  • June 11, 2019

    5th Circuit Panel Refuses To Rehear Environmental Damage Coverage Dispute

    NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals on June 3 denied  a petition for rehearing filed by a company that conducted fracking operations on an insured's facility asking it to reconsider its ruling that reversed a federal court's finding that a site pollution legal liability insurer waived its subrogation rights under an onshore master services agreement (MSA) (Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir.).

  • June 10, 2019

    Panel:  Exclusion Does Not Bar Coverage For Suit Over ‘Dangerous’ Soccer Field

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on June 7 reversed a lower federal court’s finding that a policy exclusion barred coverage for an underlying lawsuit alleging personal injury and damages for the "dangerous condition” of a soccer field, finding that the terms of the exclusion are ambiguous (Oak Park Unified School District v. Philadelphia Indemnity Insurance Company, No. 18-55033, 9th Cir., 2019 U.S. App. LEXIS 17182).

  • June 05, 2019

    Assignees Fail To State Unfair Practices, Insurer Argues To Connecticut Court

    HARTFORD, Conn. — An insurer on May 28 asked a Connecticut Superior Court to grant it judgment on claims that it violated the Connecticut Unfair Insurance Practices Act (CUIPA), arguing that its insured’s assignees have failed “to plead more than a single instance of insurance misconduct involving other claims or unrelated insureds” as required to state a CUIPA claim (William Ghio v. Liberty Insurance Underwriters, Inc., No. X07-HHD-CV-19-6104759-S, Conn. Super., 2019 Conn. Super. LEXIS 849).

  • June 05, 2019

    Insured Files Notice Of Appeal Challenging Finding That Exclusion Bars Coverage

    MIAMI — An insured filed a notice in a federal court in Florida on May 29 indicating that it is appealing to the 11th Circuit U.S. Court of Appeals the lower court’s finding that an insurance policy's liquor liability exclusion bars coverage for underlying claims that a nightclub violated Florida's Dram Shop Law (AIX Specialty Insurance Company v. Members Only Management, LLC, et al., No. 18-60471, S.D. Fla.).

  • June 05, 2019

    Federal Judge Dismisses Insurer’s Third-Party Suit Against Rutgers Football Player

    TRENTON, N.J. — A day after the parties filed a stipulation of dismissal with prejudice, a New Jersey federal judge on May 29 dismissed a homeowners insurer’s third-party claims against a former Rutgers University football player in a lawsuit alleging that he and another student sexually assaulted a female student (K.L. v. Rutgers, The State University of New Jersey, et al., No. 16-9270, D. N.J.).

  • June 04, 2019

    Judge: TCPA Violations Arise Out Of ‘Invasion Of Privacy’; Coverage Barred

    WEST PALM BEACH, Fla. — A Florida federal judge on May 30 held that coverage for an underlying $60,413,112 consent judgment entered against an insured in a Telephone Consumer Protection Act (TCPA) violation dispute is barred by the insurance policy’s “invasion of privacy” exclusion, finding that the alleged TCPA violations arise ou tof an invasion of privacy (Jacob Horn, et al. v. Liberty Insurance Underwriters, Inc., No.18-80762, S.D. Fla., 2019 U.S. Dist. LEXIS 90194).

  • June 03, 2019

    Directors And Officers Liability Insurer Has No Duty To Defend, 6th Circuit Affirms

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on May 31 affirmed a lower federal court’s finding that a directors and officers liability insurer has no duty to defend its insureds against an underlying lawsuit stemming from a Federal Communications Commission waiver involving a particular maritime frequency spectrum for emergency land-based communications, finding that one insured failed to timely report the underlying lawsuit and another insured made a material misrepresentation on the insurance application (US HF Cellular Communications, LLC, et al. v. Scottsdale Insurance Co., No. 18-3653, 6th Cir., 2019 U.S. App. LEXIS 16294).

  • June 03, 2019

    Criminal Acts Exclusion Does Not Bar Coverage For Class Action, Panel Affirms

    SANTA ANA, Calif. — A California appeals panel on May 31 affirmed a lower court's finding that coverage is owed for claims that an insured violated California Penal Code Section 632 by improperly recording a private interview without her knowledge and published it to third parties,  rejecting an insurer’s argument that coverage is excluded under a commercial general liability insurance policy’s criminal acts exclusion (Nautilus Insurance Company v. Monique Mingione, No. G055914, Calif. App., 4th Dist., Div. 3, 2019 Cal. App. Unpub. LEXIS 3759).

  • May 30, 2019

    Panel Reverses, Remands For Reasonableness Hearing Of $25M Sexual Abuse Settlements

    TACOMA, Wash. — A Washington appeals panel on May 29 held that a lower court erred when it dismissed plaintiffs from a lawsuit arising from the sexual abuse of two minors at an early learning center, reversing and remanding for the lower court to hold a reasonableness hearing regarding 12 separate settlement agreements totaling $25 million (Lisa Steel, et al. v. Olympic Early Learning Center, et al., No. 50981-4-II, Wash. App., Div. 2, 2019 Wash. App. LEXIS 1343).

  • May 30, 2019

    Assault And Battery Exclusion Does Not Bar Coverage, New Jersey Panel Affirms 

    TRENTON, N.J. — A New Jersey appeals panel on May 28 affirmed a lower court’s ruling that a commercial general liability insurance policy’s assault and battery exclusion does not bar coverage for an underlying claim alleging that the insured’s negligent maintenance of the property caused an injury, further affirming the lower court’s finding that the insurer was estopped from denying coverage (C.M.S. Investment Ventures, Inc., et al. v. American European Insurance Company, et al., No. A-2056-17T3, N.J. Super., App. Div., 2019 N.J. Super. Unpub. LEXIS 1215).

  • May 30, 2019

    Panel:   Bodily Injuries Alleged During Policy Periods Are Distinct From Convictions

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 29 held that law enforcement liability policies issued to a local Mississippi government in the mid-1980s cover claims by three individuals wrongfully arrested and imprisoned in 1980 and later exonerated in 2010, finding that the estates of the wrongfully accused allege bodily injuries during the policy periods that were distinct from the wrongful convictions themselves (The Travelers Indemnity Co., et al. v. Ethel Mitchell, et al., No. 17-60291, 5th Cir., 2019 U.S. App. LEXIS 15915).

  • May 30, 2019

    Judge:  Insurer Has Duty To Defend Engineering Firm Against Negligent Design Suit

    CINCINNATI — An Ohio federal judge on May 28 held that a professional liability insurer has a duty to defend its engineering and construction firm insured against an underlying lawsuit alleging negligent design, negligent construction and breach of contract but stayed the indemnification issue pending resolution of the underlying action (Allied World Surplus Lines Insurance Company v. Richard Goettle, Inc., No. 17-670, S.D. Ohio, 2019 U.S. Dist. LEXIS 88545).