Mealey's Insurance Pleadings

  • May 13, 2020

    Business Interruption Claims Excluded By Virus Exclusion, State Farm Argues

    SAN ANTONIO — Dismissal of insured barbershops’ claims in an insurance breach of contract and bad faith lawsuit stemming from their insurer’s denial of their business interruption coverage claims due to the novel coronavirus is necessary because the insureds failed to show that they have suffered any physical loss to property and because their claims are excluded under a virus exclusion in the policies, the insurer argues in a May 8 motion to dismiss filed in Texas federal court (Diesel Barbershop LLC, et al. v. State Farm Lloyds, No. 20-461, W.D. Texas).

  • May 12, 2020

    Cal Alumnus Sues Travel Company, Insurer Over Cruise Canceled Due To Coronavirus

    SAN FRANCISCO — A University of California alumnus on May 7 filed a class complaint in California federal court against a deluxe travel company and a travel insurer, alleging breach of contract, bad faith, intentional misrepresentation, unjust enrichment and violations of the state unfair competition law (UCL) and seeking a permanent injunction to prohibit the travel company from withholding refunds as a result of trip cancellations due to the novel coronavirus pandemic and prohibit the insurer from denying trip cancellation benefits resulting from the coronavirus quarantine (Guy Saperstein v. Thomas P. Gohagan & Company, et al., No. 20-03143, N.D. Calif.).

  • May 12, 2020

    Philadelphia Law Firm Seeks Coverage For Losses Arising From Coronavirus

    PHILADELPHIA — A Philadelphia law firm and its co-owners on May 6 sued their insurer in a Philadelphia court, seeking a declaration that it has a duty to pay their business interruption losses that are attributable to the COVID-19 pandemic (Greg Prosmushkin PC, et al. v. The Hanover Insurance Group, No. 200500342, Pa. Comm. Pls., Phila. Co.).

  • May 12, 2020

    Insurer Says No Coverage Owed For Underlying Asbestos Exposure Lawsuits

    GREENVILLE, S.C.— No coverage is owed to an insured for underlying suits arising out of asbestos claims because the insured failed to timely notify the insurer of the underlying suits, the insurer maintains in a May 1 complaint filed in South Carolina federal court (Pennsylvania National Mutual Insurance Co. v. Covil Corp., et al., No. 20-1729, D. S.C.).

  • May 12, 2020

    No Coverage Due For Injuries Caused By Diacetyl Exposure, Insurer Contends

    CHICAGO — An insurer maintains in a May 5 complaint filed in Illinois federal court that no coverage is owed to its insureds for underlying lawsuits arising out of bodily injuries caused by exposure to diacetyl, a toxic chemical flavoring, because the policies’ continuous injury exclusion bars coverage for injuries that occurred prior to the inception of the policies (Associated Industries Insurance Co. Inc. v. Vernon Stutts, et al., No. 20-2714, N.D. Ill.).

  • May 07, 2020

    Insurers ‘Trying To Minimize Exposure,’ Restaurant Insureds Argue In Coronavirus Suit

    SAN FRANCISCO — Owners of two San Francisco restaurants on May 4 sued their property insurer in a California federal court for breach of contract, bad faith, unfair business practices and declaratory relief, arguing that although the insurer “collected at least tens of millions of dollars in property insurance premiums in 2019 alone,” it “appears to be categorically denying claims brought by businesses ordered to close following the Coronavirus” as part of a “premeditated strategy” (Nari Suda LLC v. Oregon Mutual Insurance Company, No. 20-3057, N.D. Calif.).

  • May 06, 2020

    Valid Arbitration Clause Exists In Reinsurer’s Breach Of Contract Case, Insurer Says

    NEW YORK — A Puerto Rico insurer argues in a May 4 reply brief to a New York federal court that a Bermuda reinsurer’s breach of contract case over improper asset divestments for a reinsurance trust should be arbitrated because there is a valid arbitration clause in their reinsurance agreement (PB Life and Annuity Co. Ltd. v. Universal Life Insurance Co., No. 20-02284, S.D. N.Y.).

  • May 06, 2020

    Insolvent Insurer’s Directors Seek Dismissal Of Breach Of Fiduciary Duty Case

    BATON ROUGE, La. — An insolvent insurer’s directors and officers filed motions on April 30 asking a Louisiana federal court to dismiss a rehabilitator’s breach of fiduciary duty lawsuit alleging that they intentionally misled state insurance regulators on the insurer’s true financial condition (James J. Donelon v. Jeffrey C. Pollick, et al., No. 20-177, M.D. La.).

  • May 06, 2020

    Sports Bar Fails To Allege ‘Direct Physical Loss,’ Insurer Says In Coronavirus Suit

    TAMPA, Fla. — A commercial property insurer on May 4 moved to dismiss a sports bar insured’s amended complaint seeking business interruption coverage for its losses arising from the governmental suspension of its business operations in response to the coronavirus pandemic, contending that the insured has failed to alleged any “direct physical loss” to its property and “in good faith cannot do so” (Prime Time Sports Grill, Inc. v. DTW 1991 Underwriting Limited, No. 20-00771, M.D. Fla.).

  • May 05, 2020

    Underwriter: Insurer’s Claims Should Be Arbitrated In Proceeding With Reinsurer

    BOSTON — A dispute over the binding of a medical stop loss excess reinsurance contract should be sent to a Cayman Islands captive insurer and reinsurer’s pending arbitration, a managing general underwriter argues in an April 30 reply brief in Massachusetts federal court, because the insurer’s coverage claims will be arbitrated anyway with its and the underwriter’s involvement (Wellforce Indemnity Company Ltd. v. StarLine USA, LLC, No. 20-10173, D. Mass.).

  • May 05, 2020

    Insured Tells 7th Circuit: Arbitration Clause With Reinsurer Is Not Enforceable

    CHICAGO — A lower court erred in dismissing a complaint against a reinsurer because an arbitration delegation clause in a reinsurance participation agreement (RPA) is not enforceable pursuant to Section 25-2602.01(f)(4) of the Nebraska Uniform Arbitration Act, an insured argues in a May 1 opening brief to the Seventh Circuit U.S. Court of Appeals (Nandorf, Inc., et al. v. Applied Underwriters Captive Risk Assurance Company, Inc., No. 19-3090, 7th Cir.).

  • May 05, 2020

    Insured Says Insurers Acted In Bad Faith By Refusing To Pay Outstanding Costs, Fees

    CHARLESTON, W.Va. — An insured named in an underlying suit filed by a coal mining operator claims in an April 30 complaint filed in West Virginia federal court that its insurers breached their contracts and acted in bad faith by refusing to pay the insured’s outstanding defense costs incurred in an underlying suit (Mission Coal Wind Down Co. LLC v. National Union Fire Insurance Company of Pittsburgh, PA, et al., No. 20-302, S.D. W.Va.).

  • May 05, 2020

    Manufacturer: Coverage Acquired To Ensure Survival Due To Civil Authority Shutdown

    PHILADELPHIA —A manufacturing facility insured on April 20 sued its insurer in a federal court in Pennsylvania, arguing that it has “faithfully paid policy premiums” to provide additional coverage in the event of a business interruption or civil authority closure orders, adding that it has incurred and continues to incur “a substantial loss of business income and additional expenses” following the novel coronavirus shutdown that are covered under its insurance policy (C. A. Spalding Company v. Selective Insurance Group, Inc., et al., No. 20-01967, E.D. Pa.).

  • May 04, 2020

    Insurers ‘Intentionally Chose Not To Use Force Majeure Clauses,’ Restaurants Say

    SAN FRANCISCO — Two restaurant owners sued their insurers April 28 for breach of contract, bad faith, unfair business practices and declaratory relief in California court, alleging that the insurers’ denial of their business interruption claims after less than 48 hours “underscores the extent to which this denial was part of a premeditated strategy to deny all claims related to the ‘shelter in place’ orders and COVID-19” and that the insurers “intentionally chose not to use force majeure clauses in their insurance policies” (New Restaurant Group LP, et al. v. Farmers Group Inc., et al., No. N/A, Calif. Super., San Francisco Co.).

  • May 01, 2020

    Insurer Says Additional Reimbursement For Adult Film Suit Is Warranted

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals should reverse a district court’s ruling that an insurer is not entitled to reimbursement of more than $150,000 incurred to settle an underlying lawsuit filed against an insured commercial landlord by actors who allege that they contracted the human immunodeficiency virus (HIV) in the course of filming sexual activity at the insured’s premises because the insurer satisfied the necessary obligations to seek reimbursement, the insurer says in an April 13 response brief (Atain Specialty Insurance Company Inc. v. Armory Studios LLC, et al., Nos. 19-15745 and 19-15820, 9th Cir.).

  • May 01, 2020

    Insurer Denied Business Interruption Losses Without ‘Reasonable Investigation’

    CHICAGO —A dental services provider insured filed suit in a federal court in Illinois on April 6, alleging that its insurer committed breach of contract and acted in bad faith in denying its business interruption claims arising from the state-ordered closure of its business due to the novel coronavirus “within a very short period of receiving” the claims and “without first conducting any meaningful coverage investigation, let alone a ‘reasonable investigation based on all available information’ as required under Illinois law” (Sandy Point Dental PC v. The Cincinnati Insurance Company, et al., No. 20-2160, N.D. Ill., N.D. Ill., Eastern Div.).

  • April 30, 2020

    Reinsurer Offers Ruling For Court Consideration In Wrongful Acts Coverage Case

    TAMPA, Fla. — A reinsurer in an April 17 brief asks a Florida federal court to consider a decision that interpreted related language in insurance policies when ruling on competing summary judgment motions filed by it and a Florida self-insured intergovernmental risk management association on whether alleged wrongful acts against a city are covered under a reinsurance agreement (Public Risk Management of Florida v. Munich Reinsurance America Inc., No. 18-1449, M.D. Fla.).

  • April 30, 2020

    Coronavirus Would Not Be Naturally Included As ‘Pollutant,’ Insured Argues

    LOS ANGELES — A global Jewish human rights organization and its two-time Academy Award-winning film division on April 29 sued their insurer in a California federal court, seeking a declaration that Los Angeles Mayor Eric Garcetti’s March 19 “Safer at Home Emergency Order” triggers business interruption coverage because their all-risk insurance policy does not include an exclusion for a virus or global pandemic (Simon Wiesenthal Center, Inc., et al. v. Chubb Group of Insurance Companies/Federal Insurance Company, No. 20-03890, C.D. Calif.).   

  • April 30, 2020

    Retailer Files Coronavirus Class Suit Seeking Business Income, Extra Expense Coverage

    SAN DIEGO — A California retailer on April 28 brought a federal class action against its insurer, alleging breach of contract and seeking a declaration that business interruption losses incurred by compliance with civil authority orders in response to the novel coronavirus pandemic triggered business income, civil authority and extra expense coverage under the national class and California subclasses’ all-risk commercial property insurance policies (Pigment Inc. v. The Hartford Financial Services Group, Inc., et al., No. 20-00794, C.D. Calif.).

  • April 29, 2020

    Executives To 2nd Circuit: No Error In Securities Fraud Convictions Being Set Aside

    NEW YORK — Two former hedge fund executives filed response briefs April 28 arguing to the Second Circuit U.S. Court of Appeals that there was no error in a new trial being given to them over allegations of securities fraud in a scheme to transfer the hedge fund’s assets to a reinsurance company and related entities to defraud bondholders in an oil and gas company (United States of America v. Uri Landesman, et al., No. 19-3207 c/w 19-3209, 2nd Cir.).

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