From a convention center owner’s appeal to the Seventh Circuit U.S. Court of Appeals to an insurer accusing an art gallery of “misdirection,” Mealey Publications takes a look at the latest pleadings relating to insurance coverage for COVID-19.
FRESNO, Calif. — A federal magistrate judge in California on May 24 recommended that an entry of default judgment be entered against an insured’s employee in an insurer’s lawsuit alleging that the employee misappropriated $263,888 from its insured, finding that all of the factors in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), weigh in favor of granting the default judgment and granting the insurer’s request for of $263,888 in damages.
ATLANTA —A majority of the 11th Circuit U.S. Court of Appeals on June 1 affirmed a lower federal court’s ruling that an insurance policy’s “invasion of privacy” exclusion unambiguously bars coverage for an underlying $60,413,112 consent judgment entered against the insured in a Telephone Consumer Protection Act (TCPA) violation dispute.
SIOUX FALLS, S.D. — A federal judge in South Dakota on June 1 certified a question to the South Dakota Supreme Court involving the state’s insurance liquidation statute in a lawsuit brought by the liquidator of ReliaMax Surety Co. (RSC) seeking a declaration that coverage exists under a claims-made excess insurance policy above a directors and officers (D&O) policy with regard to a $21 million wrongful acts claim.
WILMINGTON, Del. — A federal judge in North Carolina on May 26 ordered as final and appealable his ruling that a professional liability insurer has a duty to defend against an underlying class action alleging that a senior living facility and its owners breached their contractual duties to provide adequate staffing and personal care, staying the separate claims for indemnity, breach of contract, unfair claims practices/trade practices and breach of the covenant of good faith pending consideration of the insurer’s appeal to the Fourth Circuit U.S. Court of Appeals.
NEW ORLEANS — A federal judge in Louisiana on May 26 granted a strip mall and hotel owner insured’s second motion to remand its lawsuit seeking business interruption and extra expense coverage for its alleged losses arising from the government stay-at-home orders in response to the coronavirus pandemic, finding that “it is imperative that the Court defer to the Louisiana judiciary in interpreting the emerging questions of Louisiana state law implicated by this case.”
ALLENTOWN, Pa. — A federal judge in Pennsylvania on May 26 held that an “all-risks” insurance policy does not provide coverage for an insured’s business income losses incurred while its operations were suspended following Gov. Tom Wolf’s March 19, 2020, order in response to the coronavirus pandemic, further finding that there is no coverage available under the policy’s civil authority provision and the policy’s virus exclusion also bars recovery.
CHICAGO — An insurer on May 19 filed suit in an Illinois court, seeking a declaration that is has no duty to defend or indemnify McDonald’s and its franchisees against two underlying lawsuits alleging violations of the Illinois Biometric Information Privacy Act (BIPA), arguing that the underlying claims do not assert “bodily injury” or “property damage” that was caused by an “occurrence” nor do they allege “personal and advertising injury” under the policy.
LEXINGTON, Ky. — A federal judge in Kentucky on May 26 denied a funeral home insured’s motion to dismiss an insurer’s declaratory judgment lawsuit disputing coverage for underlying allegations that the insured placed electronic devices that captured and transmitted video images of individuals using the men's restroom at the funeral home, rejecting the insured’s argument that the complaint must be dismissed for lack of subject matter jurisdiction.
NEW YORK — The Second Circuit U.S. Court of Appeals on May 27 affirmed a lower federal court’s ruling that a construction company and its insurer have no duty to defend and indemnify an employee assigned to work at a Wegmans Food Markets Inc. construction site against an underlying injury lawsuit, finding that the employee worked for a staffing company and not Wegmans and neither a staffing agreement or a construction contract contains any language suggesting that the employee was an “agent” of Wegmans.
PHILADELPHIA — A Philadelphia property owner on May 24 sued its insurer for breach of contract and bad faith in a Pennsylvania court, seeking more than $200,000 in property damage caused by looting and subsequent water damage.
ATLANTA — A district court correctly found that an insured restaurant chain’s claim for loss of business income caused by shutdown orders issued by state governors in the wake of the COVID-19 pandemic is not covered because the decision is clearly supported by the insurance policy’s language and because the policy’s contamination exclusion bars coverage, an insurer says in a May 26 appellee brief filed in the 11th Circuit U.S. Court of Appeals.
PHILADELPHIA — The plaintiff law firm of Hagens Berman in Seattle cannot give privileged material to an expert in support of the firm’s claim of adequate representation and then object to the material being available to adversaries, a Pennsylvania federal judge ruled May 24.
NEWARK, N.J. — A federal judge in New Jersey on May 24 denied a motion to vacate filed by the owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton, refusing to disturb her dismissal of their breach of contract lawsuit alleging $40,798,390 in damages for their losses resulting from the coronavirus pandemic.
MINNEAPOLIS — The virus that causes COVID-19 does not constitute a pollution condition under a premises pollution liability policy, a Minnesota federal judge said May 25 in granting an insurer’s motion to dismiss the insured’s complaint seeking business interruption losses caused by the shutdown of nonessential businesses in the wake of the COVID-19 pandemic.
WILMINGTON, Del. — A federal judge in Delaware on May 17 issued an oral order denying without prejudice an insured’s motion for reconsideration or clarification of an April 30 ruling in the insured’s lawsuit seeking coverage for an underlying stockholder action alleging that directors and officers breached their fiduciary duties, noting that the motion failed to comply with Rule 7.1.1 of the Local Rules of Civil Practice and Procedure of the U.S. District Court for the District of Delaware.
WILMINGTON, Del. — An insurer recently asked the Delaware Supreme Court to reverse a lower court’s ruling that there is coverage under a 2015 insurance policy for underlying lawsuits seeking damages for the costs arising out of Rite Aid Corp.’s distribution and its pharmacies’ dispensing of opioids, challenging the lower court’s finding that some of the underlying economic losses sought against the insured by governmental entities “are arguably because of bodily injury” and the governmental entities’ lawsuits and similar opioid actions assert one occurrence.
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 24 affirmed a lower federal court’s summary judgment ruling that a tenant discrimination liability insurance policy does not cover underlying claims but reversed and remanded for a determination of whether the insurer sent a reservation of rights letter in July 2017.
NEW ORLEANS — Insureds on May 22 filed a notice in a Louisiana federal court indicating that they are appealing an April 23 ruling that granted a businessowners insurer’s motion for judgment on the pleadings in their lawsuit seeking coverage for their alleged losses prompted by the coronavirus pandemic.
FRANKFORT, Ky. — A Kentucky appeals panel on May 21 affirmed a lower court’s summary judgment ruling in favor of a commercial general liability insurer, finding that the insurer has no duty to defend and indemnify against an underlying personal injury lawsuit brought against a rodeo company insured.