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

Mealey's Emerging Insurance Disputes

January 11, 2024
Judge: University’s Claims Forge At Least 1 Path To Coverage In Coronavirus Suit

SEATTLE — A Washington judge denied an insurer’s motion to dismiss the University of Washington’s lawsuit seeking coverage for losses allegedly incurred by its medical and athletic properties in the wake of the coronavirus pandemic, finding that the time element losses endorsement may establish coverage based on the insured’s alleged facts.
January 10, 2024
Coverage Owed For Insured’s Loss Of 502,315 Soybean Bushels, New York Justice Rules

NEW YORK — A New York justice granted a physical commodities trader insured’s motion for partial summary judgment on declaratory judgment and breach of contract counterclaims against its insurers in their lawsuit disputing coverage for the insured’s loss of 502,315 bushels of soybeans, finding that the insured established an actual loss under the policies.
January 10, 2024
Ruling A Microcaptive Arrangement Not Insurance, Tax Court Upholds Penalties

WASHINGTON, D.C. — A microcaptive arrangement was “not insurance for federal income tax purposes,” and the three shareholders of a California corporation are liable for accuracy-related penalties totaling 20% of the amount the corporation understated income tax from 2012 to 2014 as a result, a U.S. Tax Court judge ruled.
January 09, 2024
Hearing Canceled Due To Settlement Of Coverage Dispute Over Arbitration Proceeding

BOSTON — A Massachusetts federal court canceled a jury trial and indicated in an electronic notice entered on the docket on Jan. 8 that parties have reportedly settled a dispute over whether a private company management liability insurer has a duty to defend its insured against an underlying arbitration proceeding alleging that it violated its fiduciary duty and breached an operating agreement.
January 09, 2024
Alaska Judge Denies Judgment For Insurer In Dispute Over Water Damage Coverage

ANCHORAGE, Alaska — An Alaska federal judge on Jan. 8 denied an insurer’s motion for summary judgment in its suit seeking a declaratory judgment that a homeowners policy does not provide coverage for the insured’s water damage, finding that fact issues remain regarding whether the insured advised the insurer that the second mortgage on his property “was subject to litigation.”
January 09, 2024
Washington Panel Affirms Stay Of Subcontractor’s Pass-Through Coronavirus Claim

SEATTLE — A Washington appeals court panel on Jan. 8 held that a lower court did not abuse its discretion by staying a subcontractor’s pass-through coronavirus-related claim in its lawsuit against the port of Seattle, a prime contractor and their sureties pending final resolution of the prime contractor’s suit against the port, finding that the plain language of the subcontract explicitly waives the subcontractor’s right to sue under Washington’s Little Miller Act.
January 08, 2024
New Jersey Panel Affirms Dismissal Of Wawa’s Coronavirus Coverage Dispute

TRENTON, N.J. — A New Jersey appeals court panel on Jan. 5 affirmed a lower court’s ruling dismissing with prejudice Wawa Inc.’s first amended complaint seeking coverage for its losses arising from the COVID-19 pandemic, finding that the court’s holdings and reasonings in Mac Prop. Grp., LLC v. Selective Fire & Cas. Ins. Co. apply to Wawa's commercial liability insurance policies and, therefore, no coverage is owed.
January 05, 2024
Merck, Insurers Ask N.J. High Court To Dismiss Cyberattack Coverage Dispute

TRENTON, N.J. — Merck & Co. Inc. and certain insurers filed stipulations in the New Jersey Supreme Court seeking dismissal of the insurers from Merck’s lawsuit seeking coverage for its losses arising from a June 2017 malware/cyberattack.
January 05, 2024
No Professional Liability Coverage Owed For Attorney, 4th Circuit Affirms

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Jan. 4 affirmed a lower federal court’s ruling in favor of insurers in an attorney insured’s lawsuit seeking professional liability coverage for his claim arising from a grand jury subpoena that the U.S. Department of Justice served on his law firm, 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 05, 2024
Clothing Retailer Asks North Carolina High Court To Review COVID-19 Coverage Suit

RALEIGH, N.C. — A clothing retailer insured petitioned the North Carolina Supreme Court to review an appeals court’s ruling that affirmed a lower court’s dismissal of its lawsuit seeking coverage for its losses arising from the coronavirus pandemic, challenging the lower courts’ reliance on North State Deli v. Cincinnati Ins. Co. in dismissing its case.
January 05, 2024
Federal Judge Remands Professional Liability Insurance Coverage Dispute

SCRANTON, Pa. — A federal judge in Pennsylvania adopted a magistrate’s report recommending that a professional liability insurance coverage dispute be remanded to state court, finding that the plaintiffs’ joinder of a defendant was not fraudulent and that no basis for supplemental jurisdiction exists.
January 05, 2024
3rd Circuit Refers Motions To Dismiss To Merits Panel In Boy Scouts Plan Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals referred debtors’ motions to dismiss appeals and certain insurers’ motion to dismiss the appeals of two sets of abuse claimants to the merits panel in a dispute over the Boy Scouts of America’s third modified fifth amended Chapter 11 reorganization plan, which contemplates the creation of a settlement trust to “assume liability for all Abuse Claims.”
January 05, 2024
Louisiana Majority Denies Certified Questions In Coverage Suit Over Mine Death

NEW ORLEANS — A majority of the Louisiana Supreme Court denied the Fifth Circuit U.S. Court of Appeals’ request to certify two questions in a coverage dispute arising from a worker’s death at a salt mine, refusing to consider whether the Louisiana Oilfield Anti-Indemnity Act applies to invalidate certain indemnification and additional insured provisions in contracts between the salt mine owner and its contractors.
January 04, 2024
P.F. Chang’s Coverage For COVID-19 Losses Limited To $1M, California Panel Affirms

LOS ANGELES — A California appeals court on Jan. 3 concluded that P.F. Chang's China Bistro Inc.’s insurance policy language “clearly and unambiguously” provided only $1 million in coverage for its losses arising from the coronavirus pandemic, affirming a lower court’s ruling granting summary adjudication in favor of the insurer.
January 04, 2024
New York Justice Allows Property Owner, Contractor To Intervene In Coverage Suit

NEW YORK — A New York justice in an opinion published Jan. 3 granted a property owner and general contractor’s motion to intervene in a concrete company insured’s lawsuit seeking defense and indemnification from its insurer for two underlying lawsuits brought by employees of the insured who were injured at a construction site.
January 04, 2024
Marine Cargo Policy Ambiguous As To Whether Warehouse Was ‘Approved Location’

NEW YORK — The Second Circuit U.S. Court of Appeals found that a marine cargo insurance policy is ambiguous as to whether a warehouse that was consumed by fire was an “Approved Location,” vacating a lower federal court’s judgment in favor of the insurer and remanding for the lower court to entered judgment in favor of the insured in its lawsuit seeking coverage for its more than $600,000 in lost goods.
January 04, 2024
Federal Ruling Bars Church Volunteer From Compelling Arbitration In California Court

SAN FRANCISCO — A California judge denied a church volunteer’s motion to compel arbitration under the church’s general liability insurance policy, finding that the volunteer is barred from seeking arbitration by a federal court’s finding that the insurer has no duty to defend or indemnify the volunteer against an underlying libel and slander lawsuit arising from his negative review of a solar company on social media.
January 04, 2024
Public Official Liability Policy Is Ambiguous, Illinois Panel Rules In Reversal

CHICAGO — An Illinois appeals panel reversed a lower court’s ruling on reconsideration in favor of an insurer in its lawsuit disputing coverage for an underlying action alleging that the insured wrongfully demolished a residential building, finding that the public official liability insurance policy “contains reasonable, irreconcilably inconsistent provisions and is ambiguous” and, therefore, must be construed in favor of the insured.
January 03, 2024
Professional Liability Insurer Dismisses Fraudulent Wire Transfer Coverage Dispute

BURLINGTON, Vt. — A professional liability insurer entered a stipulation in Vermont federal court dismissing with prejudice its lawsuit disputing coverage for an underlying state court action seeking $459,411.77 from the insured for losses arising from a fraudulent wire transfer.
January 02, 2024
Defendants Must Pay $72.5M In Oil Seizure Row Involving Insurrection Clause

NEW YORK — After a New York federal jury found for plaintiff CITGO Petroleum Corp. on three of four issues in a suit stemming from the February 2020 seizure of crude oil at a Venezuelan port and involving a marine cargo reinsurance policy, judgment of $54,235,187.24 plus $18,321,092.02 in prejudgment interest was entered against the defendants.
December 21, 2023
Jury Awards More Than $49M In Damages Relating To Insurrection Clause

NEW YORK — A New York federal jury found for plaintiff CITGO Petroleum Corp. on three of four issues in a breach of contract case involving a marine cargo reinsurance policy, awarding damages of more than $49.3 million for claims stemming from the seizure of crude oil at a Venezuelan port in February 2020.
December 21, 2023
3rd Circuit: Suit Not ‘Ripe’ In Insurer’s Row With Care Homes Over COVID Coverage

PHILADELPHIA — The Third Circuit U.S. Court of Appeals vacated and remanded a district court’s grant of judgment for an insurer seeking a declaration that a nursing home’s COVID-19-related policies’ provision requiring the nursing home to pay the first $3 million in litigation and claims costs applies to multiple events, one for each facility, finding that the district court lacked jurisdiction to determine “whether COVID-19 constitutes multiple health care events” is “ripe for review.”
December 06, 2023
N.J. Panel Affirms Dismissal Of Tory Burch LLC’s Coronavirus Coverage Dispute

TRENTON, N.J. — A New Jersey appeals panel on Dec. 6 affirmed a lower court’s grant of an insurer’s motion to dismiss Tory Burch LLC’s breach of contract and declaratory judgment lawsuit seeking coverage for its losses arising from the COVID-19 pandemic, finding that New Jersey Gov. Phil Murphy’s executive orders issued in response to the virus did not physically deprive the insured from possessing its property.
December 15, 2023
Virus Exclusion Unambiguously Bars Coverage, Panel Affirms In COVID-19 Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of an insured’s breach of contract and bad faith lawsuit seeking coverage for its business losses incurred as a result of the coronavirus and subsequent government shutdown orders, finding that the commercial insurance policy's virus exclusion unambiguously precludes coverage for the insured’s claims for loss and damage.
December 15, 2023
Court ‘Wrongly Expanded’ Electronic Data Exclusion, Home Depot Tells 6th Circuit

CINCINNATI — Home Depot Inc. filed an appellant brief in the Sixth Circuit U.S. Court of Appeals challenging an Ohio federal court’s finding that a commercial general liability insurance policy’s electronic data exclusion bars coverage for the retailer’s losses stemming from a 2014 data breach, arguing that the lower court “wrongly expanded the narrow electronic-data exclusion beyond its natural meaning, based on assumed facts outside the record.”