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

Mealey's Emerging Insurance Disputes

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.
January 24, 2024
Insurers Have No Duty To Defend Against Copyright Suit, California Panel Affirms

LOS ANGELES — A California appeals panel on Jan. 23 affirmed a lower court’s summary judgment ruling in favor of professional liability and excess insurers, finding that the insurers have no duty to defend or indemnify their investment adviser insured against an underlying copyright lawsuit.
January 24, 2024
Insurers Seek Interlocutory Appeal Of Delaware Judge’s Ruling Granting New Trial

WILMINGTON, Del. — Insurers applied for certification of an interlocutory appeal of a Delaware judge’s ruling that granted the insured’s motion for a new trial in a professional liability coverage dispute arising from a Medicaid fraud investigation, arguing that the judge’s stated bases for her “extraordinary” order are both “unprecedented and at odds with settled law.”
January 23, 2024
CGL Insurer Seeks Panel Rehearing Of Coverage Dispute Arising From Bodily Injuries

CHICAGO — A commercial general liability insurer on Jan. 22 filed a petition for panel rehearing asking the Seventh Circuit U.S. Court of Appeals to reconsider its ruling earlier this month that held that it has a duty to defend against an underlying bodily injury lawsuit arising from a construction site accident, challenging the panel’s ruling that an operations exclusion relieves a commercial auto insurer from defending their mutual insured.
January 23, 2024
Federal Judge Refuses To Dismiss 7-Eleven’s Bodily Injury Coverage Lawsuit

MIAMI — A federal judge in Florida denied insurers’ motion to dismiss a 7-Eleven store’s declaratory judgment lawsuit seeking general liability and liquor liability coverage for a customer’s underlying bodily injury action alleging that a 7-Eleven employee physically struck him numerous times, concluding that the insured has adequately pleaded “a bona fide dispute” to survive dismissal.
January 22, 2024
Insured: High School Shooting Suits Seek Damages Caused By Multiple Occurrences

PONTIAC, Mich. — A public school district insured sued its insurer in a Michigan court, seeking a declaratory judgment that underlying lawsuits arising from a high school shooting seek damages for “bodily injury” that was caused by multiple “occurrences” under the policy and, therefore, the insured is not limited to $5 million in commercial general liability and excess coverage.
January 22, 2024
Infestation Exclusion Bars Coverage For Roof Damage, 4th Circuit Affirms

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Jan. 19 affirmed a Maryland federal court’s ruling that an insured’s claims for breach of contract and bad faith fail because the policy’s infestation exclusion precludes coverage for roof damage caused by an infestation of vultures.
January 22, 2024
Panel: Excess D&O Insurer Owes No Coverage For Costs Of Shareholder Class Action

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Jan. 19 affirmed a lower federal court’s summary judgment ruling in favor of an excess directors and officers liability insurer, finding that the insurer has no duty to pay a pharmaceutical drug manufacturer insured’s settlement and defense costs arising from an underlying shareholder class action alleging that it artificially inflated its stock when it misrepresented the results of a clinical drug study.
January 22, 2024
Bank, Insurer Stipulate To Dismissal Of Coverage Dispute Arising From Forgery

SANTA ANA, Calif. — A bank insured and its insurer on Jan. 19 filed a stipulation to dismiss with prejudice the insured’s lawsuit seeking coverage for its losses resulting from a forgery eight days after a federal judge in California issued an in-chambers order setting an order to show cause as to dismissal following a settlement announcement by the parties.
January 22, 2024
High Court Refuses To Consider If Damage Caused By Insured’s Work Is Occurrence

WASHINGTON, D.C. — The U.S. Supreme Court denied a petition for a writ of certiorari on Jan. 22, refusing to consider whether the Third Circuit U.S. Court of Appeals rewrote Pennsylvania insurance law in its application of the faulty workmanship doctrine when it found that damages to natural gas wells caused by an insured’s fracking work does not constitute an occurrence under a commercial general liability policy.
January 22, 2024
Insureds Failed To Show Valid Basis For N.C. High Court Review, Insurer Argues

RALEIGH, N.C. — An insurer argued to the North Carolina Supreme Court that an appeals court’s ruling that affirmed a lower court’s dismissal of a clothing retailer insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic “presents no precedent-setting error that warrants intervention” by the North Carolina Supreme Court.