Mealey's Emerging Insurance Disputes

  • October 15, 2021

    Judge:  Insurer Fails To Prove Applicability Of Professional Services Exclusion

    WILMINGTON, Del. — A Delaware judge on Oct. 11 refused to disturb an earlier ruling that granted an insured’s partial motion for judgment on the pleadings in its lawsuit seeking approximately $18 million in coverage arising from an underlying False Claims Act investigation, reiterating that a civil investigative demand (CID) falls within the policy’s definition of “claim” and the professional services exclusion does not bar coverage.

  • October 13, 2021

    Insured Did Not Reasonably Delay Seeking Coverage For Defamation Suit, Justice Rules

    NEW YORK — In an Oct. 12 published opinion, a New York justice held that an insured’s four-year delay between when an underlying defamation lawsuit was filed and when she sought commercial general liability coverage did not constitute a delay that prejudiced the insurer, rejecting the insurer’s argument that the insured’s failure to timely notify it of her claim deprived it of the ability to participate in her underlying defense.

  • October 13, 2021

    Firm Moves To Dismiss Insurers’ Suit Disputing Coverage For Surfside Collapse

    BALTIMORE — An engineering firm insured on Oct. 5 moved for a Maryland federal court to dismiss two commercial general liability insurers’ lawsuit disputing coverage for underlying lawsuits brought by victims of the June 24 partial collapse of a Surfside, Fla., condominium high-rise, arguing that the insurers failed to join necessary and indispensable parties.

  • October 12, 2021

    Magistrate: Software Developer Engaged In Pattern Of Not Complying With Court Rules

    LAS VEGAS — A federal magistrate judge in Nevada on Oct. 7 denied without prejudice a software provider’s motion to compel an insurer to produce documents in its lawsuit alleging that the insurer and another software provider misappropriated its trade secrets to develop a clone of its flood claims services system application, finding that the plaintiff has “engaged in a pattern of failing to comply with the local rules of this court.”

  • October 12, 2021

    Judge Grants Relators’ Emergency Motion For Protective Order In False Claims Suit 

    GULFPORT, Miss. — In a text only order issued on Oct. 7, a federal judge in Mississippi granted relators’ emergency motion and ordered State Farm Fire and Casualty Co. to reschedule its Federal Emergency Management Agency depositions after the completion of relevant documents to the relators in their 15-year-old qui tam suit accusing the insurer of filing false flood insurance claims after Hurricane Katrina.

  • October 12, 2021

    Golden Corral Franchisor Appeals Dismissal Of Coronavirus Coverage Dispute

    RALEIGH, N.C. — Golden Corral Corp. and Golden Corral Franchising Systems filed a notice in a North Carolina federal court on Oct. 6 indicating that they are appealing the court’s grant of an insurer’s motion for judgment on the pleadings and dismissal of their bad faith lawsuit seeking coverage for their financial losses arising from the suspension of their restaurant operations in response to the government orders prompted by the coronavirus pandemic.

  • October 12, 2021

    Coverage Suit Over Cancellation Of National Restaurant Association Show Dismissed

    CHICAGO — The same day an insured filed a notice of voluntary dismissal, a federal judge in Illinois on Oct. 7 dismissed with prejudice the insured’s breach of contract lawsuit seeking event cancellation coverage for its alleged several million dollars in losses arising out of its “necessary and unavoidable cancellation” of the May 2020 National Restaurant Association Show in Chicago due to circumstances that were created by the coronavirus pandemic.

  • October 07, 2021

    Federal Judge:  Bump-Up Exclusion Does Not Bar D&O Coverage For $90M Settlement  

    ALEXANDRIA, Va. — A federal judge in Virginia on Oct. 5 held that an insurance policy’s bump-up exclusion does not unambiguously preclude coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger, granting the insured’s motion for partial summary judgment in its lawsuit seeking directors and officers liability coverage for the underlying settlement.

  • October 06, 2021

    JPMDL:  Centralization Of GEICO Data Breach Putative Class Actions Is Not Necessary

    WASHINGTON, D.C. —The U.S. Judicial Panel on Multidistrict Litigation (JPMDL) on Oct. 4 denied GEICO’s motion to transfer and centralize five related putative class actions arising from a purported data security breach of its online sales system, finding that “informal coordination among the small number of parties and involved courts appears eminently feasible” as opposed to consolidated or coordinated pretrial proceedings as a multidistrict litigation.

  • October 06, 2021

    Judge Stands By Rulings In Favor Of Insurers In Opioid Epidemic Coverage Disputes

    PADUCAH, Ky. — A federal judge in Kentucky on Oct. 1 denied Quest Pharmaceuticals Inc.’s motions to alter, amend or vacate two earlier rulings granting summary judgment in favor of its insurers in a coverage dispute over underlying lawsuits alleging that Quest improperly distributed opioids, reiterating that Kentucky courts read the phrase “because of” the same as the word “for.”

  • October 06, 2021

    Insured Did Not Plausibly Allege Property Incurred Physical Alterations, Panel Says

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 1 affirmed a lower federal court’s dismissal of an insured’s putative class action seeking coverage for class members’ “substantial financial losses” resulting from the coronavirus and subsequent civil authority orders, rejecting the insured’s contention that pursuant to California’s rules of policy interpretation, the lower court had a duty to adopt the insured’s reasonable interpretation of the phrase “direct physical loss of or damage to property.”

  • October 06, 2021

    9th Circuit Rejects Retailer’s Appeal In Coronavirus Coverage Class Action

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 1 affirmed a lower federal court’s dismissal of a retailer insured’s class complaint seeking coverage under a comprehensive business insurance policy for its claimed losses following the state’s “Stay at Home” order in response to the coronavirus pandemic, finding that its interpretation that the phrase “direct physical loss of or damage to” insured property requires physical alteration of property is consistent with other policy provisions.

  • October 06, 2021

    Insured Allowed To Depose Attorney For Builders Risk Insurer, Magistrate Judge Says

    DENVER — A Colorado federal judge on Sept. 28 determined that a special master properly concluded that an insured seeking coverage for damage to a concrete slab at a condominium building project is permitted to depose the builders risk insurer’s attorney who was responsible for drafting the insurer’s reservation of rights letter because the attorney’s role in drafting the letter is crucial to the case.

  • October 06, 2021

    Court Overrules Insurer’s Demurrer Of Coverage Suit Over Postponed Metallica Shows

    LOS ANGELES — A California judge on Oct. 1 overruled an insurer’s demurrer to an insured’s breach of contract and bad faith lawsuit seeking coverage under a “Cancellation, Abandonment and Non-Appearance Insurance” policy for the postponement of the last six shows of Metallica’s South American tour in 2020, finding that the insurer “inadequately investigated” the claim and that the complaint adequately alleged that the coronavirus “is not the efficient proximate cause” of the concert cancellations.

  • October 06, 2021

    Panel:  Virus Exclusion Bars Coverage For Minor League Baseball Teams’ Losses

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 1 affirmed a lower federal court’s dismissal of a breach of contract and declaratory judgment lawsuit brought against insurers by small businesses that own and operate Minor League Baseball (MiLB) teams, finding that the virus exclusion bars business interruption coverage for their losses arising from the coronavirus pandemic.

  • October 05, 2021

    2nd Circuit Reverses Ruling In Coverage Dispute Arising From Subcontractor Injury

    NEW YORK — Predicting that the New York Court of Appeals would hold that an indemnity agreement in an underlying trade contract between insureds governs over insurance policy terms concerning the priority of coverage, the Second Circuit U.S. Court of Appeals on Oct. 5 reversed a lower court’s ruling as to coverage for the underlying settlement of a subcontractor employee’s injury.

  • October 05, 2021

    6th Circuit: ‘Direct Physical Loss Or Damage’ Imperative Is ‘North Star’ Of Policy

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Sept. 22 affirmed a federal court’s ruling that granted a property insurer’s motion to dismiss an Ohio Italian restaurant’s coronavirus coverage lawsuit, finding there is no coverage because the restaurant has not been tangibly destroyed and the owner has not been tangibly or concretely deprived of any of its restaurant.

  • October 01, 2021

    Judge: All Documents Withheld By Insured Are Protected By Attorney-Client Privilege

    CINCINNATI — A federal judge in Ohio on Sept. 29 denied an insurer’s motion to compel an insured to produce documents in a breach of contract and bad faith lawsuit seeking crime protection insurance coverage for an alleged fraudulent scheme through which the insured’s employee stole $1,954,329.13 in commission payments, finding that the requested documents are protected from disclosure under attorney-client privilege and the work product doctrine.

  • September 30, 2021

    Illinois Panel:  CGL Insurer’s Contribution Claims Against D&O Insurer Are Untimely

    CHICAGO — An Illinois appeals panel on Sept. 30 affirmed a lower court’s ruling that a commercial general liability insurer’s lawsuit seeking contribution from a directors and officers liability insurer for underlying claims against their mutual insured are barred by a two-year statute of limitations under Illinois Code of Civil Procedure.

  • September 30, 2021

    Judge Allows Filing Of Class Action Complaint With Support Of 46 Of 47 Plaintiffs

    ERIE, Pa. — A federal judge in Pennsylvania on Sept. 28 granted plaintiffs’ co-lead counsel’s motion for relief from an earlier order requiring unanimous consent of all plaintiffs to file a consolidated amended class action in a coronavirus business interruption coverage lawsuit against Erie Insurance Co., allowing the one hold-out plaintiff to join the class action within 10 days of its filing or alternatively file a notice that it will not join the complaint.