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

Mealey's Emerging Insurance Disputes

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.”
December 15, 2023
Ohio Panel: Insurer, Insured Fail To Show Freight Broker Breached Agreement

MIDDLETOWN, Ohio — An Ohio appeals panel affirmed a lower court’s summary judgment ruling in favor of a freight broker in a breach of contract lawsuit seeking recovery of a property loss arising from stolen cargo, finding that an insurer and its insured failed to demonstrate that the broker breached its agreement with the insured.
December 15, 2023
No Coverage Owed For $20M Wrongful Death Default Judgment, California Panel Affirms

SAN DIEGO — A California appeals panel held that an insured would not reasonably expect that his son’s conduct that resulted in a fatal shooting would fall under a homeowners insurance policy’s scope of coverage for an “accident” and outside the intentional acts exclusion, affirming a lower court’s ruling in favor of insurers in a breach of contract and bad faith lawsuit seeking coverage for an underlying $20 million wrongful death default judgment.
December 15, 2023
Panel: Appellants Failed To Establish Defendants Had Duty To Provide E&O Coverage

SAN DIEGO — A California appeals panel held Dec. 14 that appellants have not presented evidence to demonstrate a triable issue or material fact as to whether a business office liability insurer and an insurance agent had a duty to provide or suggest errors and omissions coverage, affirming a lower court’s summary judgment ruling in favor of the insurer and agent in a negligence lawsuit.
December 15, 2023
Judge Denies Insurer’s Summary Judgment Motion In Ransomware Coverage Suit

SEATTLE — A Washington judge denied an insurer’s motion for summary judgment in an insured’s breach of costs and bad faith lawsuit seeking coverage under a Cyber and Multimedia Liability Insurance Policy for its losses arising from a ransomware attack, finding that there are genuinely disputed issues of material fact regarding the insured’s claims.
December 15, 2023
Insureds Breached Terms Of Policy By Failing To Provide Proof Of Loss, Judge Says

SACRAMENTO, Calif. — Insureds’ claims for breach of contract and bad faith against their homeowners insurers in a dispute over damages and losses caused by a California wildfire cannot proceed because the insureds breached the terms of the insurance policy by failing to file a proof of loss for their personal property losses, a California federal judge said in granting the insurers’ motion for summary judgment.
December 14, 2023
Anti-Subrogation Rule Bars Excess Insurer’s Indemnification Claim, Panel Affirms

NEW YORK — The Second Circuit U.S. Court of Appeals held that a straightforward application of New York’s anti-subrogation rule prevents an excess general liability insurer from bringing an indemnification or contribution claim against a subcontractor insured, affirming a lower federal court’s summary judgment ruling in favor of the primary insurer’s in its declaratory judgment lawsuit brought against the excess insurer.
December 14, 2023
Question Certified To Florida High Court In Coverage Suit Over Hate Mail

WEST PALM BEACH, Fla. — A Florida appeals court panel majority on Dec. 13 certified a question to the Florida Supreme Court regarding the state’s pleading requirement for punitive damages claims and reiterated in its substituted opinion that a trial court improperly granted residential community residents’ motions to amend their counterclaims to seek punitive damages against a fellow resident, his insurer and the insurer’s in-house counsel.
December 13, 2023
Duke Sues Insurers In N.C. Court, Seeks D&O Coverage For Antitrust Settlement

RALEIGH, N.C. — Duke University filed suit in a North Carolina court seeking directors and officers liability coverage for its settlement of an underlying antitrust lawsuit, arguing that the primary insurer’s no-coverage position cannot be squared with its insurance “policy’s express antitrust coverage grant” and the absence of any exclusions for restitution or disgorgement.
December 13, 2023
Panel: Insured’s Argument In COVID-19 Dispute ‘Runs Into A Wall Of Precedent’

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of an insurer’s motion to dismiss an insured’s lawsuit seeking coverage for its losses arising from the shutdown of its event venue in response to the coronavirus pandemic, finding that the insured has failed to plausibly assert any “direct physical loss of or damage to” its property.
December 12, 2023
Minnesota Panel: Insured Failed To Allege Coronavirus Was Present At Its Properties

ST. PAUL, Minn. — A Minnesota appeals panel on Dec. 11 affirmed a lower court’s ruling dismissing an insured’s breach of contract lawsuit against its insurers, finding that the insured failed to assert that the coronavirus was present at and contaminated its insured casino and golf course properties and, therefore, it did not cause direct physical loss or damage.
December 12, 2023
Court Lacked Authority To Coordinate Not-Yet-Filed COVID-19 Coverage Suits

PITTSBURGH — A majority of the Pennsylvania Supreme Court held that Pennsylvania Rule of Civil Procedure 213.1 does not allow the coordination of actions that have not been filed at the time of the motion for coordination and that an insurer waived its argument that insureds were not entitled to seek coordination in the first place, affirming a Superior Court’s partial reversal of a lower court’s order coordinating coronavirus coverage lawsuits against Erie Insurance Exchange in the Allegheny County Court of Common Pleas.
December 12, 2023
Dental Practice Incurred No Direct Physical Loss, Insurers Argue To Pa. High Court

PITTSBURGH — Insurers filed a reply brief in the Pennsylvania Supreme Court defending their appeal of a Pennsylvania Superior Court majority’s ruling that at the very least, it is reasonable to interpret the phrase “direct physical loss of . . . property” to encompass the loss of use of a dental practice’s property due to the spread of the coronavirus “absent any actual damage to property.”
December 12, 2023
Insured Failed To Show Coronavirus Is A Pollution Condition, Panel Says

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeal on Dec. 11 affirmed a district court’s ruling that no coverage is owed to an insured for business interruption losses sustained as a result of the COVID-19 pandemic because the insured failed to show that the coronavirus qualifies as a pollution condition as required by the policy at issue.
December 12, 2023
California Judge Sustains Insurer’s Demurrer To Nonprofit’s COVID-19 Coverage Suit

LOS ANGELES — A California judge sustained an insurer’s demurrer to its nonprofit insured’s breach of contract, bad faith, negligent misrepresentation and declaratory relief complaint seeking coverage for its losses arising from the coronavirus pandemic, holding that the coronavirus and the subsequent governmental orders “are inextricably intertwined.”
December 12, 2023
Panel: Professional Services Exclusion Bars CGL Coverage For Defamation Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of a commercial general liability insurer in an errors and omissions insurer’s lawsuit seeking a declaration that the CGL insurer has a duty to defend their mutual insured against an underlying defamation lawsuit, finding that the CGL policy’s financial professional services exclusion bars coverage.
December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
December 11, 2023
2nd Circuit Dismisses Appeals In D&O Coverage Dispute For Want Of Jurisdiction

NEW YORK — The Second Circuit U.S. Court of Appeals on Dec. 11 dismissed an insurer’s appeal and an insured’s cross-appeal in a directors and officers liability coverage dispute arising from underlying proceedings brought by a bankruptcy trustee, finding that a lower federal court’s “Stipulated Conditional Final Judgment Subject to Reservation of Rights of Appeal” is not a “final decision” because it fails to resolve all claims of all of the parties to the lawsuit.
December 08, 2023
8th Circuit Reverses Ruling In Coverage Dispute Over Construction Site Accident

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals reversed a lower court’s grant of partial summary judgment in favor of an engineer insured in an insurer’s lawsuit disputing coverage for an underlying $2.5 million construction worker injury settlement arising from a bridge deck collapse, finding that summary judgment is unavailable because coverage hangs on the resolution of a factual dispute over the insured’s role on the construction project.
December 08, 2023
2nd Circuit: Insurer Not Obligated To Defend Lawyer In Underlying Elder Abuse Suit

NEW YORK — The Second Circuit U.S. Court of Appeals on Dec. 7 affirmed a district court’s grant of judgment on the pleadings to an insurer seeking a declaration that it is not obligated to defend or indemnify a law firm and former partner accused of malpractice, breach of fiduciary duty, elder abuse and fraud in an underlying suit related to a land sale to the former partner’s company, finding that the lower court correctly determined that the policy exclusion related to activities of another business applied.
December 07, 2023
Majority: Insurance Code Does Not Bar Indemnification For Retaliation Settlement

LOS ANGELES — Addressing an “important” question of first impression “whose answer will influence enforcement of our employment laws,” a majority of a California appeals court held Dec. 6 that not all California Labor Code Section 1102.5 claims involve necessarily willful conduct and, therefore, a lower court erred in finding that California Insurance Code Section 533 barred indemnification for a $3 million underlying settlement of police officers’ retaliation lawsuit against a California city.