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Mealey's Emerging Insurance Disputes

  • January 22, 2019

    Magistrate Tosses Coverage Suit Over Employee Theft After Parties Reach Settlement

    PHILADELPHIA — A Pennsylvania federal magistrate on Jan. 14 signed an order dismissing with prejudice a coverage dispute arising from the alleged theft of an insured's employee stock ownership plan assets by a former employee after the parties announced that they had reached a settlement (Barbie Spear, et al. v. Westfield Insurance Company, No. 15-00582, E.D. Pa.).

  • January 22, 2019

    3rd Circuit Affirms Dismissal Of Coverage Dispute Over Stolen Trade Secret Claims

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Jan. 16 affirmed a lower federal court’s dismissal of an insured's declaratory judgment lawsuit seeking coverage for underlying claims that it stole a competitor's employees and trade secrets to develop and sell competing products (Tela Bio, Inc., et al. v. Federal Insurance Company, No. 18-1717, 3rd Cir., 2019 U.S. App. LEXIS 1399).

  • January 18, 2019

    Insurer, Agents, Adjusters, Attorneys Seeks Dismissal Of Hurricane Maria Lawsuit

    ST. CROIX, Virgin Islands — In the last of a series of motions to dismiss a restaurant insured’s lawsuit over the adjustment of its claim for property damage and business interruption losses arising from looting after Hurricane Maria, an insurance agency in a Jan. 16 filing argues that the material allegations reveal there is no substantive conduct supporting any claims against it (The Doctor and the Professor LLC v. Those Certain Underwriters at Lloyds of London, et al., No. 19-0004, D. V.I.).

  • January 18, 2019

    Professional Services, ERISA Exclusions Do No Bar Coverage, 1st Circuit Affirms

    BOSTON — The First Circuit U.S. Court of Appeals on Jan. 16 affirmed a lower federal court’s ruling that a business and management indemnity insurance policy’s professional services and Employment Retirement Income Security Act exclusions do not relieve the insurer of its duty to defend its real estate investment vehicle insured against underlying claims for negligence and ERISA violations (Scottsdale Insurance Company v. Timothy L. Byrne, et al., No. 18-1526, 1st Cir., 2019 U.S. App. LEXIS 1440).

  • January 17, 2019

    Panel Certifies Question To California High Court In Yahoo’s Dispute With Insurer

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 16 certified a question to the California Supreme Court in a coverage dispute between Yahoo! Inc. and its commercial general liability insurer arising from claims brought under the Telephone Consumer Protection Act (TCPA) (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 17-16452, 9th Cir., 2019 U.S. App. LEXIS 1409).

  • January 16, 2019

    Coverage Owed For Malicious Prosecution Claim, Illinois Majority Says In Reversal

    ELGIN, Ill. — A majority of an Illinois appeals court on Jan. 15 held that a lower court erred in finding that coverage for an underlying malicious prosecution claim was triggered by the initiation of a wrongfully convicted man’s prosecution and not by his subsequent exoneration, reversing and remanding the dismissal of a breach of contract and improper claims practices lawsuit against two insurers (Rodell Sanders, et al. v. Illinois Union Insurance Company, et al., No. 1-18-0158, Ill. App., 1st Dist., Second Div., 2019 Ill. App. LEXIS 16).

  • January 16, 2019

    Alabama Court: No Fact Issue As To Advice Agent Gave On Business Income Coverage

    MONTGOMERY, Ala. — The Alabama Supreme Court on Dec. 21 held that a mattress manufacturer insured failed to present substantial evidence that created a genuine issue of material fact regarding the advice an insurance agent gave in 2012 with respect to the insured obtaining business income coverage, further finding that the insured did not establish that the agent voluntarily assumed a duty to advise it as to the adequacy of its insurance coverage (Somnus Mattress Corporation v. Stephen Hilson and Crutchfield & Graves Insurance Agency, LLC, No. 1170250, Ala. Sup., 2018 Ala. LEXIS 139).

  • January 16, 2019

    4th Circuit Considers Malpractice Insurer’s Duty When Insured Flees

    RICHMOND, Va. — A federal appeals court is set to decide whether a medical malpractice insurer should have defended against liability when the insured left the country, or whether its insured’s failure to communicate prevented it from mounting a defense in his shoes (Claudia M. Mora, et al. v. Lancet Indemnity Risk Retention Group Inc., No. 18-1566, 4th Cir.).

  • January 15, 2019

    Insured Appeals Take-Nothing Judgment In Superstorm Sandy Dispute In 2nd Circuit

    NEW YORK — An insured on Nov. 26 appealed to the Second Circuit U.S. Court of Appeals a lower federal court’s Sept. 28 ruling that entered a take-nothing judgment after adopting in its entirety a magistrate's report that recommended dismissal of his lawsuit alleging that he was wrongfully denied $141,274.50 in insurance proceeds for Superstorm Sandy damage to his Long Beach, N.Y., home (David Clutter v. William B. Long, et al., No. 18-3520, 2nd Cir.).

  • January 14, 2019

    Panel: Employer’s Liability, Texas Abuse Or Molestation Exclusions Bar Coverage

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Jan. 11 affirmed a lower federal court’s finding that employer’s liability and Texas abuse or molestation exclusions in commercial general liability and commercial liability umbrella insurance policies excuse the insurer from defending its insured against an underlying negligence lawsuit arising from the alleged attack and sexual assault of one of its employees by another employee (United Fire and Casualty Company v. Kent Distributors, Inc., No. 18-50134, 5th Cir., 2019 U.S. App. LEXIS 1025).

  • January 10, 2019

    Disney Insurer Asks 9th Circuit To Reverse Arbitration Ruling In ‘Pink Slime’ Suit

    SAN FRANCISCO — A Walt Disney Co. insurer recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that granted the insured’s motion to compel arbitration in a coverage dispute stemming from "pink slime" defamation claims against Disney’s subsidiary (The Walt Disney Co. v. AIG Specialty Insurance Co., No. 17-56840, 9th Cir.).

  • January 10, 2019

    Judge: Insurer Owes Defense To Battery Manufacturer In Product Recall Dispute

    CHICAGO — An Illinois federal judge on Dec. 20 found that an insurer has a duty to defend its battery manufacturer insured against underlying counterclaims arising from a product recall of battery-operated window shades (Great American E&S Insurance Co. v. Power Cell LLC, No. 17-6658, N.D. Ill., 2018 U.S. Dist. LEXIS 215828).

  • January 10, 2019

    Federal Judge Dismisses Coverage Suit Arising From Fatal Shooting At Hunting Club

    MONTGOMERY, Ala. — An Alabama federal judge on Dec. 26 dismissed a commercial general liability insurer’s declaratory judgment lawsuit disputing coverage for an underlying lawsuit arising from a fatal shooting that occurred at a hunting club (Scottsdale Insurance Company v. Calhoun Hunting Club and Lounge, et al., No. 18-475, M.D. Ala., 2018 U.S. Dist. LEXIS 215968).

  • January 10, 2019

    N.Y. Justice: Insurers Have Duty To Defend Hulk Hogan’s Suit Against Talent Agency

    NEW YORK — A New York justice on Dec. 21 held that primary and excess commercial general liability insurers have a duty to defend their talent agency insured and its employee against an underlying lawsuit brought by professional wrestler Hulk Hogan, further finding that the insureds are entitled to monetary damages resulting from the insurers’ breach of contract as well as legal fees and costs (Zurich American Insurance Company, et al. v. Don Buchwald & Associates, Inc., et al., No. 655533/16, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 6402).

  • January 10, 2019

    Insurers Say PG&E ‘Places Profits Over Public Safety’ In California Camp Fire Suit

    SACRAMENTO, Calif. — Four insurers standing in the shoes of their Butte County, Calif., insureds filed one of four lawsuits in a California Superior Court on Dec. 21, alleging that PG&E Corp. and/or Pacific Gas & Electric Co.’s “well-documented disregard for safety regulations and risk management practices” and “blind eye towards the use of effective maintenance and inspection practices for their facilities and equipment” triggered various factors that caused and/or contributed to causing the “most destructive and deadly wildfire California has ever experienced” (United Services Automobile Association, et al. v. Pacific Gas and Electric Co., No. 34-2018-00247013, Calif. Super., Sacramento Co.).

  • January 9, 2019

    Federal Judge Again Dismisses Suit Seeking Directors, Officers Liability Coverage

    TAMPA, Fla. — After allowing directors and officers of an insured beef company to amend their declaratory judgment complaint against their insurer, a Florida federal judge on Jan. 3 entered judgment in favor of the insurer after finding that the policy excluded coverage for an underlying lawsuit arising from the purchase of company shares (Colorado Boxed Beef Co., Inc., et al. v. Evanston Insurance Co., No. 18-01237, M.D. Fla., 2018 U.S. Dist. LEXIS 217936).

  • January 9, 2019

    Judge Allows Insured To Amend Complaint In Professional Liability Coverage Dispute

    NEW ORLEANS — A Louisiana federal judge on Jan. 7 partly granted a professional liability insurer and a claims investigator’s motion to dismiss an insured’s complaint, denied the motion without prejudice in part and granted the insured leave to amend its complaint in a coverage dispute arising from an administrative services contract the insured entered into with the state of New Jersey (Hammerman & Gainer, LLC v. Lexington Insurance Co., No. 18-6729, E.D. La., 2019 U.S. Dist. LEXIS 2807).

  • January 8, 2019

    8th Circuit Affirms No Coverage Ruling For Claim Insured Violated TCPA

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Jan. 3 affirmed a lower federal court’s ruling in favor of an insurer in a coverage dispute arising from a lawsuit alleging that its insured violated the Telephone Consumer Protection Act, finding that the appellant has failed to show that the insured did not receive adequate notice of the policy exclusion for “distribution of material in violation of statutes” (American Family Mutual Insurance Company v. Vein Centers for Excellence, Inc., et al., No. 17-3266, 8th Cir., 2019 U.S. App. LEXIS 98).

  • January 4, 2019

    Pennsylvania Elected Leaders Appeal Federal Judge’s Constitutional Rights Ruling

    HARRISBURG, Pa. — Elected leaders of the Pennsylvania General Assembly on Jan. 3 appealed a Pennsylvania federal judge’s ruling in favor of the Pennsylvania Professional Liability Joint Underwriting Association (JUA) that certain sections of Pennsylvania Act 41 are unconstitutional in violation of the U.S. Constitution’s Fifth and 14th Amendments (Pennsylvania Professional Liability Joint Underwriting Association v. Tom Wolf, et al., No. 18-1308, M.D. Pa.).

  • January 3, 2019

    Panel Affirms $914,390 Award Against Insurance Agency, Errors & Omissions Insurer

    NEW ORLEANS — A Louisiana appeals panel on Dec. 12 affirmed a lower court’s $914,390.51 judgment against an insurance agency, its employee and its errors and omissions insurer for negligently failing to procure commercial general liability insurance that was requested by an oyster harvester and seller (Breton Sound Oyster Company, LLC v. Stiel Insurance Co. of New Orleans Inc., et al., No. 2017-CA-0955, La. App., 4th Cir., 2018 La. App. LEXIS 2497).