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

Mealey's Emerging Insurance Disputes

May 29, 2025
Bump-Up Exclusion Bars D&O Coverage For $90M Settlement Over Merger, Panel Affirms

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on May 28 affirmed a lower federal court’s holding that a “bump-up” exclusion unambiguously precludes directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger including $17,626,730 of the total settlement that ultimately went toward attorney fees.
May 29, 2025
Magistrate Judge Allows CGL Insurer To Intervene In Ghost Guns Coverage Dispute

NEW YORK — A New York federal magistrate judge granted a commercial general liability insurer’s motion to intervene in another insurer’s declaratory judgment lawsuit disputing coverage for underlying claims that their mutual insured violated federal, state and local laws when it deliberately sold and shipped ghost gun parts and kits to New York, concluding that permissive intervention is warranted “to facilitate the efficient resolution of disputes involving a common question of law or fact in one proceeding.”
May 29, 2025
Final OK Given To $3.25 Million Settlement Of Class Action Over USAA Data Breach

WHITE PLAINS, N.Y. — An almost 4-year-old suit over a 2021 data breach experienced by United Services Automobile Association (USAA) was resolved when a New York federal judge approved a $3.25 million settlement between the insurance company and a lone lead plaintiff, disposing of claims including negligence and violation of the Driver’s Privacy Protection Act (DPPA).
May 28, 2025
Majority Reverses Punitive Damages Ruling In Suit Arising From Hurricane Florence

RALEIGH, N.C. — A majority of the North Carolina Supreme Court affirmed an appeals court majority’s holding that an insured’s allegations are sufficient to state a claim for negligence against an insurance agent in a lawsuit arising from Hurricane Florence property damage but reversed its ruling as to the punitive damages claim.
May 28, 2025
10th Circuit Finds Date Of Plumbing Plan Unclear, Reverses Judgment For Engineer

DENVER — In the wake of the Wyoming Supreme Court’s ruling that the two-year statute of limitations for professional negligence claims attaches to the design that was the legal cause of the purported injury, the 10th Circuit U.S. Court of Appeals on May 27 ruled that a trial court erred in finding a subrogated homeowners insurer’s claim against a mechanical engineering firm that designed a home’s plumbing time-barred, noting that the record does not include the date of the plans the plumber used to install the faulty plumbing.
May 28, 2025
Winemaker Seeks To Exclude Insurer’s Expert Witness In Dispute Over Defective Wine

SEATTLE — A commercial winemaker moved to exclude the rebuttal testimony and report of an excess commercial general liability insurer’s expert witness in a coverage dispute arising from an underlying faulty vinification lawsuit over allegedly defective wine, arguing in a Washington federal court that the insurer’s expert’s testimony and report are properly excluded under Federal Rule of Civil Procedure 37(c)(1).
May 28, 2025
7th Circuit Refuses To Reconsider Ruling In Coverage Dispute Over BIPA Violations

CHICAGO —The Seventh Circuit U.S. Court of Appeals declined a commercial liability insurer’s invitation to reconsider its opinion that vacated and remanded a lower court’s ruling in favor of the insurer in its lawsuit disputing coverage for an underlying putative class action alleging that a food ingredient manufacturer insured violated the Illinois Biometric Information Privacy Act (BIPA).
May 28, 2025
Doctor Appeals No Coverage Ruling In Suit Arising From Alleged Hidden Cameras

NEW YORK — A doctor insured filed a notice of appeal asking the Second Circuit U.S. Court of Appeals to review a lower federal court’s dismissal of her breach of contract lawsuit seeking business interruption and umbrella coverage for her losses arising from discovery of hidden cameras at her dermatology office.
May 27, 2025
U.S. High Court Refuses To Review Dismissal Of Insurer’s Claims Against Law Firm

WASHINGTON, D.C. — The U.S. Supreme Court on May 27 denied a professional liability insurer’s petition for writ of certiorari seeking review of a Montana Supreme Court’s ruling that affirmed a lower court’s dismissal of its third-party complaint alleging legal malpractice against a now bankrupt law firm and two attorneys who represented its insured in an underlying class action, leaving undisturbed the Montana Supreme Court’s holding that the insurer failed to establish the existence of personal jurisdiction over the attorneys and firm.
May 23, 2025
Insurer Disputes Coverage For Suit Arising From Super Bowl Parade Shooting

KANSAS CITY, Mo. — A commercial general liability insurer filed a first amended complaint in a Missouri federal court seeking a declaration that it has no duty to provide coverage for an underlying lawsuit alleging The Greater Kansas City Sports Commission did not implement adequate security measures to protect the thousands of attendees at the 2024 Kansas City Chiefs Super Bowl victory parade, asserting that the policy’s assault and battery exclusion bars coverage.
May 22, 2025
Contamination Exclusion Bars Coverage For COVID-19 Losses, Texas Panel Says

AUSTIN, Texas — A contamination exclusion bars coverage for an insured’s claim seeking coverage for damages and losses incurred as a result of the coronavirus because the exclusion is not ambiguous and clearly includes viruses in its definition of contamination, the Third District Texas Court of Appeals said May 22 in affirming a trial court’s judgment in favor of the insurers.
May 21, 2025
Insurer Challenges 7th Circuit Ruling In Coverage Dispute Over BIPA Violations

CHICAGO — A commercial liability seeks rehearing of the Seventh Circuit U.S. Court of Appeals’ ruling that vacated and remanded a lower court’s ruling in its favor in its lawsuit disputing coverage for an underlying putative class action alleging that a food ingredient manufacturer insured violated the Illinois' Biometric Information Privacy Act (BIPA), asking the appeals court to amend and correct its opinion to omit any reference to an underlying settlement and omit its conclusion that the insurer will have a duty to indemnify under a 2015 insurance policy if the insured’s notice of the underlying claim was timely.
May 21, 2025
Insured’s Assignee Brings Bad Faith Suit Seeking To Recover $3.2M Consent Judgment

WEST PALM BEACH, Fla. — A horse stable owner insured’s assignee sued an insurer for bad faith in a Florida federal court, seeking to recover an underlying $3.2 million consent judgment arising from the settlement of an underlying fraud lawsuit.
May 21, 2025
Majority’s Opinion Rewrites Bad Faith Law In Florida, Insurer Argues To 11th Circuit

ATLANTA — An insurer filed a petition seeking rehearing of an 11th Circuit U.S. Court of Appeals majority’s reversal of a lower federal court’s grant of summary judgment in its favor in an insured’s lawsuit alleging that it acted in bad faith when it failed to make a settlement offer in an estate’s allegations of negligent security against the insured, contending that the “majority’s opinion rewrites Florida bad faith law.”
May 21, 2025
Clinic Insured, Assignee Appeal Ruling In Favor Of Professional Liability Insurer

SALT LAKE CITY — A clinic insured and its assignee filed a notice indicating they are appealing a Utah federal judge’s ruling that granted a professional liability insurer’s motion for summary judgment on the remaining bad faith claim in a coverage dispute arising from a medical malpractice lawsuit.
May 20, 2025
U.S. High Court Refuses To Review Insurers’ Petition In Tribal Jurisdiction Dispute

WASHINGTON, D.C. — The U.S. Supreme Court on May 19 denied insurers’ petition for a writ of certiorari asking it to determine “whether a tribal court can exercise jurisdiction over nonmembers of the tribe based on off-reservation conduct,” leaving undisturbed a Ninth Circuit U.S. Court of Appeals’ opinion that affirmed a federal court’s finding that a tribal court has subject matter jurisdiction over a COVID-19 coverage suit involving tribal properties on tribal land.
May 20, 2025
Supreme Court Rejects Insurer’s Challenge To Ruling In Favor Of Tribal Court Judges

WASHINGTON, D.C. — The U.S. Supreme Court on May 19 declined an insurer’s invitation to review a Ninth Circuit U.S. Court of Appeals’ holding that a tribal court has subject matter jurisdiction over it in a dispute over the tribe’s claims for business interruption losses at its casino caused by the COVID-19 pandemic, refusing to review the appeals court’s ruling that affirmed a lower federal court’s summary judgment ruling in favor of two tribal court judges on the alternative ground that the insurance policy at issue satisfies Montana v. United States’ consensual-relationship exception.
May 20, 2025
Judge Rules On Cross-Motions For Summary Judgment In Painter Injury Coverage Suit

HARTFORD, Conn. — A Connecticut judge granted in part and denied in part an insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify against underlying claims arising from a painter’s injury and denied one of the defendant’s motion for partial summary judgment, finding that the cross liability exclusion bars coverage for some of the claims.
May 19, 2025
Delaware Court Asked To Dismiss Primary, Excess Insurer From D&O Coverage Dispute

WILMINGTON, Del. — An insured and its primary and excess insurers filed a stipulation asking a Delaware court to dismissed the two insurers from the insured’s breach of contract and bad faith lawsuit seeking directors and officers and entity securities liability insurance coverage for an underlying appraisal action, indicating that a settlement has been reached between them.
May 16, 2025
No Breach Of Contract, Bad Faith In Coverage Suit Over Stolen Art, Panel Affirms

PHOENIX — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of an insurer’s motion for summary judgment on an insured’s breach of contract and bad faith claims, finding that the insured failed to raise a material question of fact that he owned the insured artwork.
May 16, 2025
CGL Insurer Fails To Support Piercing Of Corporate Veil Claim, 2nd Circuit Affirms

NEW YORK — The Second Circuit U.S. Court of Appeals on May 16 affirmed a lower federal court’s finding that a commercial general liability insurer failed to establish facts supporting its quest to pierce a construction company insured’s corporate veil in connection with its breach of contract lawsuit seeking to hold the insured’s owners and officers liable for the alleged $1,247,950.03 in policy premiums, taxes and fees that the insured failed to pay.
May 16, 2025
Professional Liability Insurer’s Defense Withdrawal Was Not Breach Of Contract

PHILADELPHIA — A professional liability insurer did not breach its contract or act in bad faith in withdrawing its defense of an insured in an underlying wrongful death suit because the policy clearly precludes coverage as the underlying claims arose out of the actions of a doctor who is specifically excluded from coverage under the policy, a Pennsylvania federal judge said in granting the insurer’s motion to dismiss.
May 15, 2025
Special Master Imposes $31,100 In Costs After Attorneys’ AI Briefing Errors

LOS ANGELES — Two firms for plaintiffs in a bad faith insurance suit must pay $26,100 in special master fees and another $5,000 for defense costs after submitting an artificial intelligence-assisted supplemental brief with nine erroneous cites across 10 pages, a special master appointed in a federal court in California said while striking the brief and denying the plaintiffs any requested discovery relief.
May 14, 2025
Majority Rejects Abuse Claimants’ Invitation To Throw Out BSA Reorganization Plan

PHILADELPHIA — A Third Circuit U.S. Court of Appeals majority on May 13 dismissed two sets of abuse claimants’ appeals seeking to reverse a lower federal court’s confirmation order that affirmed 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,” and the concurring judge said she sees “not only error, but mischief, in the majority's approach.”
May 14, 2025
Justice Rules For Professional Liability Insurer In Legal Malpractice Coverage Suit

BOSTON — A Massachusetts justice granted a professional liability insurer’s motion for summary judgment in its lawsuit seeking a declaration as to coverage for an underlying legal malpractice action brought against an attorney and his law firm, finding that the insureds “had a reasonable basis to foresee the malpractice claim prior to the applicable policy period.”