Mealey's Emerging Insurance Disputes : Mealey's : Legal News & Analysis

Mealey's Emerging Insurance Disputes

February 09, 2024
8th Circuit: Court Erred In Failing To Apply Policy’s Intrafamily Immunity Exclusion

ST. LOUIS — The Eight Circuit U.S. Court of Appeals held that an insurance policy’s “Intrafamily Immunity” exclusion unambiguously precludes coverage for an underlying bodily injury claim, reversing a lower federal court’s summary judgment ruling.
February 09, 2024
Insurer Petitions 9th Circuit For Panel Rehearing Of Pollution Exclusion Ruling

SAN FRANCISCO — A district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris should be affirmed because a panel majority of the Ninth Circuit U.S. Court of Appeals failed to consider two applicable California appellate decisions before concluding that the insurer’s pollution exclusion does not apply to toxic dust, an insurer argues in its petition for panel rehearing.
February 09, 2024
3rd Circuit: Appellant Is Precluded From Relitigating Indemnification Issue

PHILADELPHIA — The Third Circuit U.S. Court of Appeals held that an appellant is precluded from relitigating whether a commercial general liability insurer must indemnify its deli owner insured for liability arising from the appellant’s underlying state court injury lawsuit over a stabbing at the deli, affirming a lower federal court’s grant of the insurer’s motion to dismiss.
February 08, 2024
Insurer Does Not Owe Regulatory Defense Fees To Doctor, Panel Rules In Reversal

RALEIGH, N.C. — A North Carolina appeals court held that a medical professional liability insurer has no duty to reimburse its doctor insured for regulatory defense fees incurred in an underlying investigation by the North Carlina Medical Board, reversing a lower court’s ruling that the policy required the insurer to reimburse $50,000 to the insured.
February 08, 2024
Insured Fails To Establish Coverage ‘Occurrence’ Under Policy, 9th Circuit Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of an advertising company insured’s breach of contract lawsuit against its commercial general liability insurer, finding that the insured failed to demonstrate facts establishing a covered “occurrence” under its policy.
February 07, 2024
Texas Panel: Exclusion Bars Coverage For Baylor College Of Medicine’s COVID-19 Losses

HOUSTON — A Texas appeals court on Feb. 6 affirmed a lower court’s summary judgment ruling in favor of insurers in Baylor College of Medicine’s lawsuit seeking commercial property insurance coverage for its lost business income arising from the coronavirus pandemic, finding that the Pollution and Contamination exclusion unambiguously bars coverage.
February 06, 2024
Bank’s Claim ‘Insurable’ As A Matter Of Ohio Law, 6th Circuit Rules In Reversal

CINCINNATI — The Sixth Circuit U.S. Court of Appeals reversed a lower federal court’s summary judgment ruling in favor of professional liability insurers in a bank insured’s breach of contract and bad faith lawsuit, finding that the bank’s underlying settlement payment to a bankruptcy trustee is “insurable” pursuant to Ohio law and that an ambiguous exclusion should be construed in the insured’s favor.
February 05, 2024
Judge: No Coverage Owed For Unfair Competition Suit Brought Against Insured

SAN DIEGO — A federal judge in California concluded that an insurer has no duty to defend its furniture delivery company insured against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, granting the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit.
February 02, 2024
Insured Seeks Coverage For Claims It Violated BIPA By Using Biometric Time Clocks

CHICAGO — An insured filed a breach of contract lawsuit in an Illinois federal court, seeking a declaration as to coverage for an underlying putative class lawsuit alleging that it violated the Illinois Biometric Privacy Act (BIPA) by using biometric time clocks to track employee working hours.
February 02, 2024
7th Circuit Refuses To Rehear Coverage Dispute Arising From Bodily Injuries

CHICAGO — The Seventh Circuit U.S. Court of Appeals on Feb. 1 denied a commercial general liability insurer’s petition for panel rehearing challenging its holding that the insurer has a duty to defend against an underlying bodily injury lawsuit arising from a construction site accident, standing by its ruling that an operations exclusion relieves a commercial auto insurer from defending their mutual insured.
January 31, 2024
Magistrate Recommends Granting Judgment For Insurer In Yacht Fire Coverage Dispute

MIAMI — A Florida federal magistrate judge issued a report and recommendation advising granting summary judgment for a marine insurer seeking a declaratory judgment that it is not obligated to cover its insured’s loss related to fire damage of an 85-foot yacht, finding that because the insured made material misrepresentations in the policy application, the insurer is entitled to a ruling that the policy is void and there is no coverage.
January 31, 2024
4th Circuit Denies Attorney’s Request To Reconsider Professional Liability Dispute

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Jan. 30 rejected an attorney insured’s petition for rehearing en banc challenging the appeals court’s affirmation of a lower federal court’s ruling in favor of insurers in his lawsuit seeking professional liability coverage for his claim arising from a grand jury subpoena the U.S. Department of Justice served on his law firm, standing by its finding that the insurers never made a clear promise to provide coverage for the insured’s underlying expenses and his lack of good faith claim at a minimum required him to demonstrate that he was entitled to coverage.
January 31, 2024
Insurer Amends Complaint In Coverage Dispute Over State’s Suit Against Puppyland

TACOMA, Wash. — A commercial insurer amended its complaint seeking dismissal of the insureds’ counterclaims in its federal lawsuit seeking a declaratory judgment that its policy does not cover Washington’s unfair trade practices claims against Puppyland stores, reiterating its argument that it has no duty to defend or indemnify because the underlying claims arise out of conditions that are not covered or are specifically barred from coverage.
January 30, 2024
Insurer Granted More Time To Seek High Court Review Of Remanded Class Action

CHICAGO — The U.S. Supreme Court issued a letter granting an insurer extended time to file its petition seeking review of the Seventh Circuit U.S. Court of Appeals’ finding that a class action challenging the insurer’s practices fits within the internal affairs and home state controversy exceptions to the Class Action Fairness Act (CAFA).
January 30, 2024
Insurer Files Subrogation Suit Seeking $3M For Manufacturer’s Contamination Losses

PITTSBURGH — An insurer filed a subrogation suit on behalf of its sports nutrition snack manufacturer insured in a Pennsylvania court, seeking more than $3 million for the insured’s losses arising from its use of contaminated collagen in its manufacturing process.
January 30, 2024
Policy’s Aircraft Exclusion Bars Coverage For Injuries, Alaska Supreme Court Says

ANCHORAGE, Alaska — Considering the reasonable expectations of the insured, the Alaska Supreme Court held that a homeowners insurance policy’s “aircraft exclusion” precludes coverage for underlying personal injuries because they “arose out of” the insured’s ownership and maintenance of an airplane.
January 29, 2024
Judge Stays Deadlines Pending Mediation Of Directors And Officers Coverage Dispute

FORT MYERS, Fla. — A federal judge in Florida granted a joint motion filed by primary and excess directors and officers liability insurers and a global medical device company insured to stay deadlines pending their mediation to resolve the insured’s breach of contract lawsuit seeking coverage for defense and settlement costs arising from an underlying False Claims Act lawsuit.
January 29, 2024
Panel: Opioid Suits Describe ‘Exclusively Deliberate’ Conduct, No Coverage Owed

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 26 held that underlying allegations brought against a prescription drug distributor insured “describe exclusively deliberate conduct” and, therefore, there is no coverage owed, affirming a lower federal court’s summary judgment ruling in favor of insurers in their lawsuit disputing coverage for the underlying lawsuits prompted by the opioid epidemic.
January 29, 2024
Burger King Franchisee Seeks Coverage For Suit Alleging BIPA Violations

CHICAGO — A franchisee of the Burger King chain sued its umbrella insurer in Illinois federal court for breach of contract, seeking a declaration that the insurer has a duty to defend it against an underlying putative class lawsuit alleging that it violated the Illinois Biometric Information Protection Act (BIPA).
January 26, 2024
4th Circuit Affirms Ruling For Professional Liability Insurer, Finds No Bad Faith

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of a professional liability insurer in a breach of contract and bad faith lawsuit, finding that the insured failed to create a genuine dispute of fact about the reasonableness of the insurer’s refusal to defend her against an underlying lawsuit.
January 25, 2024
N.J. High Court: Casino Fails To Allege ‘Direct Physical Loss’ In COVID-19 Suit

TRENTON, N.J. — The New Jersey Supreme Court on Jan. 24 affirmed an appeals panel’s finding that a lower court erred in denying insurers’ motion to dismiss an insured’s lawsuit seeking property and business interruption insurance coverage for its alleged loss of income during the closure of its Atlantic City casino in response to COVID-19 pandemic shutdown orders, finding that the insured has failed to plead that its business losses were caused by direct physical loss or damage under the policy and that the contamination exclusion further bars coverage.
January 25, 2024
Summary Judgment Granted For Insurer In Row Over Overvalued Sunken Fishing Boat

FORT LAUDERDALE, Fla. — A Florida federal judge granted summary judgment to a commercial marine insurer seeking a declaratory judgment that it did not need to provide coverage for a fishing vessel it believes was intentionally sunk, finding no remaining issues of material fact that the insured made material misrepresentations in the policy application, including overvaluing the vessel by more than $35,000.
January 25, 2024
Panel: LLC Was Sole Tenant, No Personal And Advertising Injury Coverage Owed

SAN FRANCISCO — A California appeals court affirmed a lower court’s ruling in favor of an insurer in a breach of contract and bad faith lawsuit seeking coverage for an underlying cross-complaint in response to the insureds’ unlawful detainer lawsuit, finding that the policy’s personal and advertising injury coverage was not triggered because a limited liability company and not an actual person was the sole tenant sued.
January 24, 2024
9th Circuit Panel Majority Reverses Ruling On Pollution Exclusion’s Applicability

SAN FRANCISCO — The majority of the Ninth Circuit U.S. Court of Appeals on Jan. 23 reversed a district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris after determining that a potential for coverage exists because the mechanism of exposure does not clearly constitute an event that is commonly thought of as pollution event pursuant to California precedent.
January 24, 2024
Viacom Dismisses Another Insurer From D&O Coverage Dispute In Delaware Court

WILMINGTON, Del. — Viacom Inc. and QBE Insurance Corp. stipulated and agreed to dismiss without prejudice all claims against QBE in Viacom’s lawsuit seeking directors and officers liability coverage for underlying claims that its directors, officers and controlling shareholders breached their fiduciary duties in connection with a 2019 merger with CBS Corp.