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

Mealey's Emerging Insurance Disputes

June 14, 2024
Panel: Insured’s Failure To First Raise Arguments In Lower Court Is ‘Fatal’ To Appeal

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on June 13 held that an insured forfeited its arguments on appeal because it did not raise them first before a lower federal court, affirming the lower court’s grant of the insurer’s judgment on the pleadings in its declaratory judgment lawsuit disputing coverage for underlying sexual misconduct claims brought by the insured’s former employee.
June 14, 2024
N.J. Panel Affirms Ruling In Favor Of Insurer In Suit Brought By Spa Franchise

TRENTON, N.J. — A New Jersey appeals panel on June 13 affirmed a lower court’s grant of summary judgment in favor of a professional liability insurer in a spa franchise insured’s lawsuit seeking coverage for underlying claims that one of its employees perpetuated a sexual act against one of its former customers, concluding that there is no coverage owed because the insured had knowledge about the sexual act before the effective policy date.
June 14, 2024
Mortgage Lender Did Not Violate Maryland Law By Receiving Commission From Insurer

BALTIMORE — A federal judge in Maryland has held that a mortgage lender did not violate the Credit Grantor Closed End Credit Provisions (CLEC) by receiving a commission from a third-party insurer because the CLEC is inapplicable to the lender’s receipt of a commission, granting the lender’s motion for judgment on the pleadings in a putative class action challenging its charge and collection of the insurance premiums.
June 13, 2024
Magistrate: Defendant CGL Insurer Owes Defense For Negligence Suit Against Insured

FRESNO, Calif. — A federal magistrate judge in California held that underlying allegations that an insured negligently conducted cyclic steaming operations constitute an “occurrence” under a defendant commercial general liability insurer’s policy, granting the plaintiff CGL insurer’s joint motion for summary judgment as to the defendant insurer’s duty to defend against an underlying lawsuit brought against their mutual insured.
June 13, 2024
Insurers’ Motion For Summary Judgment Denied In Row Over Jet Insurance Coverage

SAN DIEGO — A California federal judge denied summary judgment to insurers in their suit seeking rescission of a policy covering a private jet but granted in part the jet owners’ motion for partial summary judgment regarding their reliance “on a misrepresentation theory,” finding that the insurers failed to show that the insureds made misrepresentations about the identity of the jet’s pilots.
June 13, 2024
Judge Sustains Insurer’s Demurrer As To Bad Faith Claim In Suit Over Netflix Show

LOS ANGELES — A California judge sustained an insurer’s demurrer without leave to amend as to a breach of the implied covenant of good faith and fair dealing brought by the producers of the Netflix show “House of Cards” and overruled the insurer’s remaining demurrers in a coverage dispute arising from the insureds’ claims that the revised final season of House of Cards was not as successful as was anticipated before Kevin Spacey's departure from the show.
June 11, 2024
English Justice: Aviation Insurance Disputes Should Proceed In Ukraine

LONDON — An English justice considering aviation insurance disputes over aircraft that remain in Ukraine airports closed after Russia’s invasion concluded “that the exclusive jurisdiction clauses [EJCs] in the reinsurance contracts are binding and enforceable, and apply,” so the claims should proceed in Ukrainian courts.
June 11, 2024
Panel Denies Estate’s Petition To Rehear Coverage Dispute Over Wrongful Death

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied an estate’s petition to reconsider its ruling that affirmed the part of a lower federal court’s order that determined that a commercial general liability insurance policy’s assault and battery exclusion relieved the insurer of its duty to indemnify the estate’s underlying wrongful death lawsuit against the insured.
June 11, 2024
D&O Insurer Has No Duty To Advance Defense Costs, Delaware High Court Affirms

WILMINGTON, Del. — The Delaware Supreme Court on June 10 held that a directors and officers liability insurer has no duty to advance defense costs to its insured for an underlying lawsuit seeking recovery of an arbitration award, affirming a lower court’s ruling that the policy’s run-off exclusion relieves the insurer of this duty.
June 10, 2024
Judge Rules In Favor Of Senior Care Liability Insurer In Dispute With Nursing Home

CHICAGO — An Illinois federal judge granted a senior care liability insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an underlying $3.3 million default judgment entered against a nursing home insured, finding that the insurer has no duty to defend or indemnify the insured in the underlying lawsuit brought under Illinois’ Nursing Home Care Act and Wrongful Death Act.
June 10, 2024
Coverage Excluded For Child’s Injury Caused By Chemical In Mints, Insurer Says

ST. LOUIS — No coverage is owed to insureds for an underlying suit seeking damages caused by a child’s ingestion of liquid breath mints that contained a chemical that damaged the child’s esophagus because the policy’s pollution exclusion applies as a bar to coverage, an insurer says in a complaint filed in Missouri federal court.
June 07, 2024
Panel Affirms Ruling In Insurer’s Favor In Suit Arising From Car Crashing Into Home

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of summary judgment in favor of a homeowners insurer on insureds’ claim for damages under Hayseeds, Inc. v. State Farm Fire & Casualty Co. in their lawsuit arising from damage caused by a car that crashed into the insureds’ home, further concluding that the lower court did not abuse its discretion in its evidentiary rulings or in denying the insureds’ motion for a new trial.
June 05, 2024
Coblentz Settlement Cannot Be Enforced Against Excess Insurers, 11th Circuit Affirms

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of excess insurers in an insured’s lawsuit seeking to enforce a Coblentz v. Am.Sur. Co. of N.Y. settlement agreement arising from an underlying negligence action, finding that the excess insurers did not breach their duty to defend because they offered to defend under a reservation of rights.
June 05, 2024
Florida Judge Refuses To Stay Insured’s Suit Seeking $700M In Lost Aircraft

MIAMI — A Florida judge denied certain insurers’ motion to stay an aircraft leasing business insured’s lawsuit seeking coverage for its loss of $700 million worth of commercial aircraft leased to Russian airlines after Russia invaded Ukraine.
June 04, 2024
Mississippi High Court: No Coverage Owed To Shipbuilder For Defective Flange Plates

JACKSON, Miss. — The Mississippi Supreme Cout unanimously affirmed a lower court’s grant of summary judgment in favor of an “all-risk” insurer in a shipbuilder insured’s breach contract lawsuit seeking to recover the $3.3 million it paid to replace and repair cracked steel flange plates that were installed on two of its ships, finding that the defective materials were installed due to faulty workmanship; the insured sought coverage exclusively for the costs of repairing and replacing the defective materials and the policy unambiguously excludes the cost or replacing or repairing defective materials.
June 04, 2024
No Cybersecurity Coverage Owed For Phishing Scam Losses, California Panel Affirms

SANTA ANA, Calif. — A California appeals panel on June 3 affirmed a lower court’s ruling that an insurer owes no coverage for an insured’s losses arising from a phishing scam, determining that the insured failed to assert a “direct financial loss” to trigger coverage under the cybersecurity insurance policy.
June 03, 2024
R.I. Supreme Court Affirms Contamination Exclusion Bars Coverage In Coronavirus Suit

PROVIDENCE, R.I. — The Rhode Island Supreme Court on May 31 affirmed a lower court’s ruling in favor of a commercial property insurer in an insured’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that it has “no difficulty concluding” that the insured’s “allegations fall squarely within the Contamination Exclusion.”
June 03, 2024
New York Panel: Insurer Owes Coverage For Indemnification Suit Over Worker Injury

BROOKLYN, N.Y. — A New York appeals panel held that a subcontractor’s commercial general liability insurer has a duty to defend and indemnify a second subcontractor against an underlying lawsuit seeking contractual indemnification for a personal injury action, finding that the insurer failed to raise a triable issue of fact regarding whether the policy’s contractual liability exclusion applied to preclude coverage.
May 31, 2024
Communicable Disease Business Income Coverage Limit Is $100,000 Per Occurrence

NEWARK, N.J. — A federal judge in New Jersey ruled that a commercial insurance policy’s applicable limit for its Communicable Disease Business Income Coverage is $100,000 per occurrence and the threat of the spread of the coronavirus and not Gov. Phil Murphy’s executive orders triggered this coverage, granting an insurer’s motion for summary judgment and denying an insured’s cross-motion in a declaratory judgment lawsuit arising from the pandemic.
May 31, 2024
Professional Services Exclusion Bars Coverage For Carbon Monoxide Injury Suits

SPRINGFIELD, Ill. — A trial court did not err in finding that no coverage is owed for underlying personal injury lawsuits stemming from a carbon monoxide leak because the underlying allegations involve the insured’s rendering of professional services and are therefore barred from coverage by the policies’ professional services exclusion, the Fourth District Illinois Appellate Court said in affirming the trial court’s ruling.
May 30, 2024
U.S. High Court Rules In Favor Of NRA In Free Speech Suit Arising From Insurance Program

WASHINGTON, D.C. — The U.S. Supreme Court on May 30 unanimously ruled in favor of the National Rifle Association of America (NRA) in the NRA’s challenge to the Second Circuit U.S. Court of Appeals’ finding that the NRA failed to plausibly assert that the former superintendent of the New York State Department of Financial Services (DFS) unconstitutionally threatened or coerced an insurer or other entities to stifle its speech.
May 30, 2024
11th Circuit Affirms No CGL Coverage Owed For Negligence Suit Against Landscaper

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower court’s summary judgment ruling in favor of a commercial general liability insurer in a landscaper insured’s breach of contract and bad faith lawsuit seeking coverage for an underlying negligence action, finding that the insurance application expressly disclaims the work the insured did and the bad faith claim fails because the insurer had a lawful basis to deny the claim.
May 29, 2024
2nd Circuit Vacates, Remands Ruling In Insurer’s Indemnification Suit

NEW YORK — The Second Circuit U.S. Court of Appeals vacated a lower federal court’s dismissal of an insurer’s breach of contract lawsuit seeking indemnification for the settlement of an underlying class action alleging that it undervalued its customers' vehicles when it processed total loss insurance claims, finding that the lower court erred in determining that the insured failed to allege facts sufficient to demonstrate that the underlying claims resulted from or arose out of its use of the defendant’s valuation tool.
May 29, 2024
Washington Panel Affirms Dismissal Of Quest Diagnostics’ Coronavirus Coverage Suit

SEATTLE — A Washington appeals panel held May 28 that Quest Diagnostics Inc. failed to establish that the presence of COVID-19 resulted in physical loss or damage to its insured property, affirming a lower court’s dismissal of the insured’s breach of contract and declaratory judgment lawsuit seeking coverage under the civil authority policy provision for its business interruption losses.
May 29, 2024
Winemaker Adds Bad Faith Claim In Washington Coverage Suit Over Defective Wine

SEATTLE — A wine producer amended its complaint in a Washington court adding claims against its insurer for breach of the duty of good faith and fair dealing and violations of Washington’s Consumer Protection Act and the Insurance Fair Conduct Act in its lawsuit seeking coverage for the “tragic damage to 320,922 cases of premium Washington wine” that resulted in a loss of more than $8 million.