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

Mealey's Emerging Insurance Disputes

October 25, 2023
8th Circuit Refuses To Reconsider Remand Of Coronavirus Coverage Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Oct. 24 denied an insurer’s petition seeking rehearing or rehearing en banc of its Sept. 11 ruling that reversed and remanded a coronavirus coverage ruling for an Iowa federal court to determine whether federal diversity jurisdiction exists.
October 24, 2023
Judgment Granted For Lessee In $2.5M Insurance Fraud Row Involving Chris Brown

MEMPHIS, Tenn. — A Tennessee federal judge on Oct. 23 granted summary judgment to the lessee of a recording studio owned by musician Chris Brown, who was previously found liable for submitting a fraudulent insurance claim for burglary and fire at his studio, finding that claim preclusion prevents the insurer from asserting claims against the lessee, who had received a $2.5 million jury award.
October 24, 2023
Court Erred In Finding Exclusion Barred D&O Coverage, Panel Says In Reversal

CHICAGO — An Illinois appeals panel reversed a lower court’s finding that an insurance policy’s exclusion for insureds’ failure to “establish or maintain adequate reserves” barred directors and officers liability coverage for an underlying breach of fiduciary lawsuit that condominium unit owners brought against a condominium association and its directors.
October 23, 2023
Lawyer Insured: Panel’s Ruling Guts Professional Liability Insurer’s Duty To Defend

NEW YORK — A lawyer insured on Oct. 21 filed a petition for rehearing en banc seeking to reverse the Second Circuit U.S. Court of Appeals’ ruling that a professional liability insurer has no duty to defend its construction management company against a lawsuit arising from a home renovation project because the underlying complaint fails to allege professional services that the insured provided as a lawyer to trigger coverage, arguing that the panel’s decision “abrogates decades of black-letter New York insurance law that favors insureds, effectively gutting an insurer’s duty to defend.”
October 23, 2023
Insurer Says Coverage Suit Over Legionnaire’s Disease Should Stay In Federal Court

LOUISVILLE, Ky. — A Kentucky federal court should exercise its discretion and permit an insurer’s declaratory judgment suit to proceed because litigating the issue of coverage in federal court is more judicially efficient than transferring the suit to a state court where the underlying bodily injury suit arising out of an apartment tenant’s contraction of Legionnaire’s disease is pending, the insurer says in its response to a motion to dismiss.
October 23, 2023
5th Circuit Affirms Refusal To Remand And Dismissal Of Coronavirus Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower federal court’s denial of insureds’ motion to remand a coronavirus coverage dispute and its grant of the commercial property insurer’s motion to dismiss a breach of contract lawsuit seeking coverage for losses arising from the coronavirus pandemic, finding that the insureds failed to plausibly plead that the coronavirus caused direct physical damage to their insured property.
October 23, 2023
Insurer And Its Officers Challenge 7th Circuit’s Remand Of Class Action

CHICAGO — An insurer and its directors and officers filed petitions for rehearing en banc seeking review of the Seventh Circuit U.S. Court of Appeals’ holding 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), challenging the panel’s reversal of a lower federal court’s denial of the insured’s motion to remand.
October 23, 2023
7-Eleven Seeks Coverage For Bodily Injury Lawsuit Involving Store Employee

MIAMI — A 7-Eleven sued its insurers for declaratory relief in a federal court in Florida, seeking general liability and liquor liability coverage for a customer’s underlying bodily injury lawsuit alleging that a 7-Eleven employee physically struck him numerous times.
October 23, 2023
Panel: Reformation Of Businessowners Insurance Policy Was Proper Under Georgia Law

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower court’s ruling in favor of assignees of a restaurant owner insured in a breach of contract and reformation lawsuit against a businessowners insurer, finding that reformation of the policy was proper under Georgia law.
October 23, 2023
Government, Amicus Disagree On Review Of Insurance Info Reverse-Preemption Row

WASHINGTON, D.C. — In the latest filings in a corporate privacy case involving microcaptive insurance company information and the McCarran-Ferguson Act (MFA), the government urges the U.S. Supreme Court to deny certiorari, and amicus National Association of Insurance Commissioners (NAIC) argues that case merits review.
October 20, 2023
Umbrella Policy Is Not Ambiguous, Kentucky Panel Says, Reversing Ruling

FRANKFORT, Ky. — A majority of the Kentucky Court of Appeals on Oct. 20 reversed a lower court’s summary judgment ruling in favor of insureds in an insurer’s lawsuit seeking a declaration as to commercial umbrella insurance coverage for underlying claims arising from a fatal car accident that was caused by a patron of the insured’s business, finding that the unambiguous commercial umbrella policy does not provide coverage.
October 18, 2023
New York Justice Dismisses Counterclaims Against Insurers In COVID-19 Coverage Suit

NEW YORK — A New York justice granted insurers’ motion to dismiss their insurers’ counterclaims in a coronavirus coverage dispute, finding that the case is “factually indistinguishable” from Consolidated Rest. Operations, Inc. v. Westport Ins. Corp. as to “policyholder COVID-19 claims based on a policy covering ‘direct physical loss, damage or destruction to property.’”
October 17, 2023
New York Justice: Insurer Owes Defense, Indemnification For Personal Injury Suit

NEW YORK — A New York justice held that a commercial general liability insurer has a duty to defend or indemnify a property owner and a general contractor as additional insureds against an underlying personal injury lawsuit and has a duty to reimburse the plaintiff insurer its underlying attorney fees, costs and disbursements.
October 17, 2023
Federal Judge Dismisses Hotel Owner, Claimants In Sex Trafficking Coverage Suit

ATLANTA — The same day the parties filed a joint motion to dismiss, a federal judge in Georgia dismissed a commercial general liability insurer’s claims against one of two hotel owners and underlying claimants in a dispute over coverage for lawsuits alleging sex trafficking and forced labor that occurred at the hotels.
October 17, 2023
Judge Dismisses Insurer’s Complaint Against Amber Heard In Defamation Coverage Suit

LOS ANGELES — A federal judge in California adopted a tentative ruling dismissing without leave to amend an insurer’s second amended complaint seeking a declaratory judgment that it has no duty to defend or indemnify Amber Heard for a defamation judgment awarded to Johnny Depp.
October 17, 2023
Settlement Agreement Bars Insured From Reopening D&O Coverage Suit, Panel Affirms

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals held that the plain language of a settlement agreement between an insured and its directors and officers liability insurer bars the insured from reopening its coverage dispute against the insurer, affirming a lower federal court’s dismissal of the insured’s breach of contract and declaratory relief lawsuit without leave to amend.
October 17, 2023
5th Circuit: Maritime Insurer Cannot Recover Benefits Paid For Seaman’s Injuries

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a federal court’s ruling that an insurer has a duty to pay the maintenance and cure under a maritime protection and indemnity (P&I) insurance policy for a seaman’s injuries that he incurred while employed on a lift boat, finding that the limitation on the insurer’s waiver of subrogation is not applicable.
October 16, 2023
Mississippi High Court Majority: Fire Not Latent Injury To Trigger Discovery Rule

JACKSON, Miss. — A majority of the Mississippi Supreme Court found that a fire that started in a metal storage bin containing wood shavings the night after a welding company had repaired the bin was not a latent injury to trigger the discovery rule, affirming that a subrogated insurer’s negligence suit against the welding company is time-barred.
October 16, 2023
Maryland Panel: Insurer’s Negligence Claims Against Subcontractors Are Not Barred

ANNAPOLIS, Md. — Reversing a lower court in part, a Maryland appeals panel held Oct. 13 that contractual waivers of subrogation do not bar an all-risk insurer’s claims alleging that tornado damage to an Amazon warehouse was caused by subcontractors’ negligence in designing and building the warehouse because the subcontractors were not intended third-party beneficiaries of the subrogation waiver.
October 16, 2023
Federal Judge Grants Motion To Voluntarily Dismiss Pipeline Explosion Suit

BIRMINGHAM, Ala. — An Alabama federal judge granted a motion to voluntarily dismiss with prejudice a lawsuit filed by two insurers seeking a declaration that no coverage is owed for a gas pipeline explosion after the insurers notified the court that they reached a settlement with their insureds.
October 16, 2023
Insurer Appeals Ruling That Negligence Claim Against Engineer Is Time-Barred

CHEYENNE, Wyo. — A subrogated homeowners insurer has appealed to the 10th Circuit U.S. Court of Appeals a federal judge in Wyoming’s ruling that its claim against the engineer that designed a home’s plumbing is time-barred by the two-year statute of limitations for professional negligence claims as the claim began to run when the engineer submitted the final design plans.
October 13, 2023
North Carolina Judge Dismisses Set Of Insureds’ Claims In Opioid Coverage Dispute

WINSTON-SALEM, N.C. — A North Carolina judge found that one set of insureds in a coverage dispute arising from the opioid epidemic filed their declaratory relief lawsuit in an attempt to avoid their home state of Ohio and the Ohio Supreme Court’s holding in Acuity v. Masters Pharm., Inc., partly granting insurers’ motion to dismiss.
October 13, 2023
Questions Certified To Louisiana High Court In Coverage Suit Over Salt Mine Death

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 12 certified two questions to the Louisiana Supreme Court in a coverage dispute arising from a worker’s death at a salt mine, inquiring 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.
October 12, 2023
Judge Rules For Insurer In Hotel’s Coverage Suit Over Theft, Vandalism Claims

LOS ANGELES — A California judge granted a businessowners insurer’s motion for summary judgment in a hotel owner insured’s breach of contract and bad faith lawsuit seeking coverage for its losses arising from alleged theft and vandalism that occurred following its shutdown of operations in response to the coronavirus pandemic, finding that the policy’s vacancy provision bars coverage and estoppel does not apply.
October 11, 2023
No Professional Services Alleged To Trigger Coverage For Lawyer, 2nd Circuit Says

NEW YORK — The Second Circuit U.S. Court of Appeals on Oct. 10 affirmed a lower court’s ruling in favor of a professional liability insurer in a declaratory judgment and breach of contract lawsuit brought by a lawyer insured, agreeing with the lower court that the insurer has no duty to defend the insured’s construction management company against a lawsuit arising from a home renovation project because the underlying complaint fails to allege professional services that the insured provided as a lawyer to trigger coverage.