SANTA ANA, Calif. — Dismissal of an insured business’s breach of contract and bad faith lawsuit against its business interruption insurers for failure to pay lost income benefits stemming from government closures due to the novel coronavirus pandemic is warranted because the plain language of the policy precludes coverage under its virus exclusion, one of the insurers argues in an Oct. 8 motion to dismiss filed in California federal court (Long Affair Carpet and Rug Inc. v. Liberty Mutual Insurance Co., et al., No. 20-1713, C.D. Calif.).
CHICAGO — A federal judge in Illinois on Oct. 22 granted a homeowners insurer’s motion to dismiss with prejudice a lawsuit alleging that it breached its duty to defend an underlying defamation and tortious interference lawsuit that resulted in a $100,000 judgment against its insured, finding that the underlying claims fail to suggest “bodily injury” or “property damage” under the policy (Karen J. Taaffe v. Selective Insurance Company of the Southeast, No. 20-3417, N.D. Ill., 2020 U.S. Dist. LEXIS 195870).
LOS ANGELES — Two days after ruling that FedEx Office and Print Services Inc. is entitled to coverage for underlying class actions alleging that it violated the Fair and Accurate Credit Transactions Act (FACTA), a federal judge in California on Oct. 22 ordered FedEx and its professional solutions insurer to private mediation (FedEx Office and Print Services, Inc. v. Continental Casualty Company, No. 20-4799, C.D. Calif.).
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 21 affirmed a lower federal court’s summary judgment in favor of an insurer in its lawsuit disputing coverage for an underlying wrongful death lawsuit brought against its doctor insured who pleaded guilty to distributing controlled substances in violation of 21 U.S. Code Sections 841(a)(1) and (b)(1)(C), finding that the professional liability insurance policy “obviously and unambiguously” precludes coverage for willful violations of law (National Fire & Marine Insurance Company v. Scott Hampton, et al., No. 19-17235, 9th Cir., 2020 U.S. App. LEXIS 33215).
POUGHKEEPSIE, N.Y. — A New York judge on Oct. 13 awarded summary judgment to a plaintiff in declaring that the exhaustion of a claims-made professional liability insurance policy in the year in which a medical malpractice claim was made invoked the coverage afforded by the first-layer excess occurrence insurance policy for the occurrence year, further declaring that “where the claim was made in a tail period, exhaustion of the coverage provided by the tail triggers the excess coverage in the same manner” (Christine Steele v. Healthcare Professionals Insurance Company, et al., No. 2019-54012, N.Y. Sup., Dutchess Co., 2020 N.Y. Misc. LEXIS 7386).
PORTLAND, Ore. — A federal magistrate judge in Oregon on Oct. 15 granted insureds’ motion to stay an insurer’s lawsuit disputing employment practices liability coverage for underlying sexual harassment and discrimination claims, finding that a stay is appropriate until the underlying lawsuits are resolved (Kinsale Insurance Company v. Northwest Surgical Development of Portland LLC, No. 19-01286, D. Ore., 2020 U.S. Dist. LEXIS 19127).
OWENSBORO, Ky. — An insurer has no duty to defend insured directors and officers who were indicted for violating the Federal Mine Safety and Health Act by allegedly manipulating dust sampling equipment and testing processes at a company mine because the policies’ pollution exclusion clearly bars coverage for the underlying claims against the insureds, a Kentucky federal judge said Oct. 15 (Charley Barber, et al. v. Arch Insurance Co., No. 19-142, W.D. Ky., 2020 U.S. Dist. LEXIS 191204).
NEWARK, N.J. — The owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton on Oct. 12 sued their all-risk commercial business insurer in a federal court in New Jersey for breach of contract and reformation, alleging that physical loss and damage caused by the novel coronavirus “directly led” to their subsequent $40,798,390 in economic damages (Manhattan Partners LLC, et al. v. American Guaranty and Liability Insurance Company, No. 20-cv-14342, D. N.J.).
SAN FRANCISCO — In a Sept. 16 cross-appeal filed in the Ninth Circuit U.S. Court of Appeals, a commercial general liability insurer argues that Yahoo forfeited its claim to $618,380 in attorney fees under Brandt v. Superior Court in their data privacy coverage dispute but defends the lower court’s ruling that the policy’s deductible coverage endorsement is enforceable and precludes coverage for additional damages (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 19-16475, 9th Cir.).
ASHEVILLE, N.C. — A chief federal judge in North Carolina on Oct. 13 stayed all proceedings as to whether an insurer has a duty to indemnify its insured against an underlying qui tam lawsuit alleging that it submitted false or fraudulent claims to Medicare pending the outcome of the underlying lawsuit, but refused to stay the lawsuit as to the insurer’s duty to defend (Those Certain Underwriters at Lloyd's, London v. Medical Fusion, LLC, et al., No. 20-00041, W.D. N.C., 2020 U.S. Dist. LEXIS 189617).
SALT LAKE CITY — A federal judge in Utah on Sept. 16 granted an insurer’s motion to dismiss a doctor insured’s declaratory judgment lawsuit seeking professional liability coverage for an underlying action brought by a patient and awarded the insurer $24,228.36 in attorney fees and costs in connection with its motion to compel arbitration (Brevan Baugh v. Allied Professionals Insurance Company, No. 18-0074, D. Utah, 2019 U.S. Dist. LEXIS 51652).
From a federal coverage lawsuit brought by the franchisee of Outback Steakhouse restaurants to a theater operator’s voluntary dismissal of a French reinsurance company from its proposed class action, Mealey Publications takes a look at the latest pleadings relating to insurance coverage for COVID-19.
By David P. Leno, Peter P. McNamara, Matthew V. Spero and Michael J. Heller
BALTIMORE — A federal judge in Maryland on Aug. 26 entered a $10,314.51 judgment in favor of an insured in an insurer’s declaratory judgment lawsuit disputing coverage for underlying battery and negligence claims, declaring that the insurer has a duty to defend its insured against all underlying claims (Nautilus Insurance Company v. 200 West Cherry Street, LLC, No. 18-434, D. Md., 2020 U.S. Dist. LEXIS 159585).
MINNEAPOLIS — A magistrate judge in Minnesota on Oct. 5 said that a settlement conference will be held before him on Oct. 28 in Target’s breach of contract lawsuit seeking coverage for its settlement with a group of financial institutions (FIs) over a 2013 data breach (Target Corp. v. ACE American Insurance Co., et al., No. 0:19-cv-02916, D. Minn.).
CHICAGO — A federal judge in Illinois on Sept. 30 denied an insured’s motion to dismiss an insurer’s breach of contract claim to the extent that it relies on an implied duty of good faith but dismissed the remaining claims in finding that the insured does not owe an excess carrier a duty to settle and that the insured has failed to plausibly alleged an express breach of contract claim (North American Elite Insurance Company v. Menard Inc., No. 19-6528, N.D. Ill., Eastern Div., 2020 U.S. Dist. LEXIS 180572).
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Oct. 9 affirmed a lower federal court’s ruling that a courier company insured failed to raise a genuine dispute of material fact that underlying putative class claims brought by its delivery drivers potentially triggered employment practices liability coverage, finding that the insurer has no duty to defend (Unity Courier Services, Inc., et al. v. Hudson Insurance Company, No. 19-56168, 9th Cir., 2020 U.S. App. LEXIS 32067).
CINCINNATI — Granting an insurer’s motion for summary judgment in its declaratory judgment lawsuit, a federal judge in Ohio on Oct. 7 found that the insurance policy’s assault and/or battery exclusion precludes coverage for any claims arising out of an April 22, 2018, incident at the insured’s bar that caused injuries to patrons by another patron who pleaded guilty to aggravated vehicular assault (Atlantic Casualty Insurance Company v. Kenneth Rutz, et al., No. 18-00776, S.D. Ohio, 2020 U.S. Dist. LEXIS 186500).
SAN ANTONIO — A magistrate on Oct. 7 issued a report recommending that a Texas federal court grant a dental office insured’s motion to remand its coronavirus coverage lawsuit to Texas court, finding that the insured has properly stated a claim against one of the defendants for her conduct as an individual insurance adjuster (Louis G. Orsatti, DDS, P.C v. Allstate Insurance Company, et al., No. 20-00840, W.D. Texas, 2020 U.S. Dist. LEXIS 185935).
DALLAS — A federal judge in Texas on Oct. 7 granted an “all risk” commercial property insurer’s motion to dismiss its restaurant insured’s lawsuit seeking business interruption coverage for its losses arising from the novel coronavirus, allowing the insured to replead (Vandelay Hospitality Group LP v. The Cincinnati Insurance Company, et al., No. 20-01348, N.D. Texas, 2020 U.S. Dist. LEXIS 185581).