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

Mealey's Emerging Insurance Disputes

August 22, 2023
Judge Adopts Report As To Expert Testimony In ‘Vitamin Energy’ Coverage Suit

PHILADELPHIA —A federal judge in Pennsylvania adopted a magistrate’s report that recommended denying the manufacturer and marketer of a vitamin energy shot’s motion to exclude the testimony of the insurer’s expert to the extent it seeks to exclude the expert from testifying altogether in a coverage dispute arising from an underlying false advertising lawsuit brought by a competitor.
August 22, 2023
Judge Refuses To Reconsider Subcontractor’s Coverage Suit Over Worker Injuries

NEW YORK — A New York federal judge on Aug. 21 rejected a subcontractor’s request to reconsider her ruling in favor of its insurer in its lawsuit seeking coverage for claims brought by two of its workers.
August 22, 2023
Judge Partly Dismisses Insurer’s Coverage Suit Against Medical Product Manufacturer

CONCORD, N.H. —A federal judge in New Hampshire granted a medical product manufacturer insured’s motion to dismiss the portion of commercial general liability insurer’s declaratory judgment lawsuit pertaining to 10 underlying class action lawsuits alleging that the insured manufactured and marketed continuous positive airway pressure (CPAP) and bi-level positive airway pressure devices that were not safe, healthy or effective, finding that the insurer’s coverage claim as to these underlying suits is untimely.
August 22, 2023
8th Circuit Affirms No Coverage Ruling In Kansas City Restaurants’ COVID-19 Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Aug. 21 affirmed a Missouri federal court’s judgment in favor of a commercial property insurer in a breach of contract lawsuit brought by the owner of several Kansas City restaurants and bars that were forced to close or reduce their operations as a result of the COVID-19 pandemic, finding that even if the insured discovered the coronavirus at its insured properties, it failed to meet the standard for physicality.
August 21, 2023
Connecticut Judge: Collateral, Judicial Estoppel Apply In Maritime Coverage Dispute

STAMFORD, Conn. — A Connecticut judge granted a marine cargo insurer’s motion for summary judgment in an insured’s breach of contract and bad faith lawsuit seeking coverage for the alleged theft and/or misappropriation of 25,250 metric tons of its alumina, finding that both collateral and judicial estoppel apply and that the insurer demonstrated that the policy’s free of capture and seizure (FC&S) exclusion bars coverage.
August 21, 2023
Insurer: No Coverage Owed For State’s Unfair Trade Practices Suit Against Puppyland

TACOMA, Wash. — A commercial insurer filed suit in a federal court in Washington seeking a declaratory judgment that its policy does not cover the state of Washington’s unfair trade practices claims against Puppyland stores, contending that none of the underlying claims arises out of bodily injury, property damage, personal injury or advertising injury and “all claims arise out of conduct explicitly excluded from coverage under the liability portion of the policies.”
August 21, 2023
California High Court Agrees To Review Tribe’s Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court granted an Indian tribe insured’s petition to review a state appellate court’s finding that the insured and its experts failed to present sufficient evidence to demonstrate that the coronavirus caused property damage to the tribe’s casino and resort.
August 18, 2023
Judge: Exclusions Do Not Bar Coverage For Claims Arising From Opioid Epidemic

GREENSBORO, N.C. — A federal judge in North Carolina on Aug. 17 ruled in favor of a wholesale pharmaceutical drug distributor insured in its lawsuit seeking coverage for underlying allegations that it failed to detect and investigate suspicious prescription opioids orders by pharmacies, rejecting the insurer’s argument that the policy’s contract and professional services exclusions bar coverage.
August 18, 2023
1st Circuit Affirms Dismissal Of Coverage Suit Over Land Development Dispute

BOSTON — The First Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of a preservation trust insured’s lawsuit seeking coverage for its underlying defense and indemnification costs arising from a land development dispute, rejecting the insured’s contention that the language of the prior pending exclusion amendment is ambiguous.
August 17, 2023
Reconsideration Warranted In Coverage Suit Over Worker Injuries, Subcontractor Says

NEW YORK — A subcontractor asked a New York federal judge to consider her ruling in favor of its insurer in its lawsuit seeking coverage for claims brought by two of its workers, arguing that reconsideration is warranted to “correct a clear error” with the judge’s holding.
August 17, 2023
Judge: Electronic Data Exclusion Bars Coverage For Home Depot’s Data Breach Loss

CINCINNATI — A federal judge in Ohio held Aug. 16 that an insurance policy’s electronic data exclusion bars coverage for Home Depot’s losses stemming from a 2014 data breach, granting the insurers’ motions for summary judgment in Home Depot’s breach of contract and bad faith lawsuit seeking damages up to the full collective policy limits of $50 million.
August 17, 2023
Stay Granted In Marine Insurance Dispute Over Material Misrepresentations

SEATTLE — A Washington federal judge granted a trust’s motion to stay a marine insurer’s suit against it, seeking a declaratory judgment that the trust’s marine insurance policy on its sailboat is void due to alleged material misrepresentations, finding that factors weigh in favor of granting a stay pending resolution of Great Lakes Ins. SE v. Raiders Retreat Realty Co., LLC, a case scheduled for argument before the U.S. Supreme Court.
August 16, 2023
CGL Insurer: Baltimore City Employee Acted Intentionally; No Coverage Owed

BALTIMORE —A commercial general liability insurer filed a complaint in a federal court in Maryland contending that there is no coverage owed for an underlying lawsuit alleging that a city employee who was working as a security guard at the Baltimore Convention Center observed and filmed minors while they were undressing in a dressing area during a dance competition that was being held at the center.
August 16, 2023
Insurer: Insured Vs. Insured Exclusion Bars D&O Coverage For Crude Oil Entities

DENVER — An insurer filed an amended complaint in a Colorado federal court seeking a declaration that it owes no directors and officers liability coverage for underlying indemnification demands and counterclaims that directors and officers brought against their former employers and its related entities that operate a crude oil purchasing business, arguing that the business and management indemnity policy’s insured versus insured exclusion barred coverage.
August 16, 2023
Panel Refuses To Rehear D&O Coverage Suit Over Insured’s Settlement With Government

CHICAGO —The Seventh Circuit U.S. Court of Appeals refused to reconsider its finding that a directors and officers liability insurer owes the insured its $10 million policy limit for the $100 million the insured paid the U.S. government to settle potential claims that it violated the Anti-Kickback Statute (AKS) and the False Claims Act (FCA), standing by its affirmation of a federal court’s summary judgment ruling in favor of the insured.
August 15, 2023
CGL Insurers Dispute Coverage For Claims That Insured Contributed To Opioid Crisis

SPARTANBURG, S.C. — Commercial general liability insurers filed suit in a South Carolina federal court seeking a declaration that they have no duty to defend or indemnify against governmental entities’ underlying lawsuits alleging that their insured caused or contributed the opioid crises by improperly marketing, distributing and selling opioid medications.
August 15, 2023
Judge: Fact Issues Preclude Summary Judgment In Coverage Suit Over Forgery Claims

SANTA ANA, Calif. — On remand from the Ninth Circuit U.S. Court of Appeals, a federal judge in California held that fact issues preclude summary judgment in favor of a bank insured in its lawsuit seeking coverage for its losses resulting from a forgery.
August 15, 2023
Insurer’s Suit Against Amber Heard Is Clearly Moot, Judge Says In Tentative Ruling

LOS ANGELES — Ruling on motions for judgment on the pleadings in an insurer’s declaratory judgment lawsuit alleging that it has no duty to defend or indemnify Amber Heard for a defamation judgment awarded to Johnny Depp, a federal judge in California issued a tentative ruling that concluded that the lawsuit, as it has been pleaded, is now “clearly moot.”
August 15, 2023
Property Insurance Depreciation Class Settlement Approved, Including Service Awards

SELMA, Ala. — A federal judge in Alabama granted final approval of a class settlement in a case accusing insurers of improperly deducting nonmaterial depreciation from actual cash value payments when adjusting structural loss claims under Alabama policies, including service awards for the class representatives, despite the holding in Johnson v NPAS Solutions, LLC.
August 15, 2023
Hotel Owners Seek Dismissal Of Insurer’s Coverage Suit Over Sex-Trafficking Claims

HOUSTON — Hotel insureds asked a federal court in Texas to dismiss a commercial general liability insurer’s lawsuit seeking a declaration that it has no duty to defend and indemnify them against an underlying lawsuit alleging that a woman was abused and molested as a minor while in the insureds’ “care, custody or control,” arguing that the insurer’s lawsuit is not ripe for consideration and that the amended complaint does not invoke the federal court’s subject matter jurisdiction.
August 14, 2023
Pro Rata Method Of Allocation Applies In Coverage Suit Over Hog Farm Operation

RALEIGH, N.C. — In two separate opinions, a North Carolina judge determined that underlying property damage and bodily injury lawsuits stemming from the operation of a hog farm must be construed as arising out of a single occurrence and that a pro rata method of allocation must be applied to excess policies because a pro rata method of allocation is consistent with the allocation method set forth by the North Carolina Supreme Court.
August 14, 2023
Delaware Judge: Bump-Up Exclusion Is Ambiguous In D&O Coverage Suit Over Merger

WILMINGTON, Del. — A Delaware judge granted Viacom Inc.’s motion for partial summary judgment in its suit 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., finding that the bump-up policy provision is ambiguous and should be resolved in favor of the insured.
August 11, 2023
Panel: Pilot Lacked Valid FAA Medical Certificate, No Coverage Owed For Crash

CHICAGO — The Seventh Circuit U.S. Court of Appeals held that an aircraft insurance policy unambiguously excluded coverage for a plane crash because the pilot lacked a valid and current medical certificate from the Federal Aviation Administration, affirming a federal court’s summary judgment ruling in favor of the insurer.
August 11, 2023
Exclusion ‘Readily Apparent,’ Georgia Panel Rules In Affirming Lower Court

ATLANTA — A Georgia appeals court affirmed a lower court’s summary judgment ruling in favor of an insurance agency and its agent in an insured’s breach of contract and negligence lawsuit, finding that the policy exclusion was “readily apparent.”
August 11, 2023
Georgia Panel Affirms Dismissal Of Coronavirus Coverage Dispute

ATLANTA — A Georgia appeals panel affirmed a lower court’s grant of insurers’ motion to dismiss their mutual insured’s breach of contract lawsuit seeking coverage for its losses arising from the COVID-19 pandemic, saying the “overwhelming majority” of federal and state courts have rejected similar pandemic coverage claims.