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

Mealey's Emerging Insurance Disputes

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.”
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.