Mealey's Emerging Insurance Disputes

  • June 28, 2024

    Majority Affirms Dismissal Of Suit Seeking $192M In Losses Arising From Coronavirus

    NEW ORLEANS — A majority of a Fifth Circuit U.S. Court of Appeals panel on June 27 affirmed a lower federal court’s ruling in favor of a commercial property insurer in Texas’ largest nonprofit health system’s lawsuit seeking coverage for its $192 million in business interruption losses arising from the coronavirus, but the dissenting judge found that the case is distinct because the insured pleaded tangible alterations to its property.

  • June 27, 2024

    Panel: Personal Liability Excess Insurer Has No Duty To Defend Defamation Suit

    CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a lower court’s ruling that a personal liability umbrella insurer had no duty to provide defense costs for an underlying defamation lawsuit brought against board members of the College of DuPage, finding that an educator’s legal liability insurance policy covered the underlying loss.

  • June 26, 2024

    CGL Insurer Disputes Coverage For Suit Against U.S. Paralympic Committee

    DENVER — A commercial general liability insurer filed suit in a Colorado federal court seeking a declaratory judgment that it has no duty to defend or indemnify the U.S. Olympic and Paralympic Committee (USOPC) for a paralympic swimmer’s lawsuit alleging that a team member sexually assaulted and harassed him and that USOPC failed to warn his parents about the team member or supervise the accused.

  • June 25, 2024

    CGL Coverage Excluded For Personal Injury Suit, 4th Circuit Affirms

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of a commercial general liability insurer in its declaratory judgment lawsuit disputing coverage for an underlying personal injury lawsuit brought by a contractor hauler against a logging company owner insured, finding that a policy endorsement unambiguously bars coverage.

  • June 25, 2024

    CGL Insurer, Insured Settle And Dismiss Coverage Dispute Over Trade Secret Lawsuit

    BOSTON — A commercial general liability insurer and its insured filed stipulations of dismissal after advising a Massachusetts federal court that they have settled their dispute over defense costs for an underlying trade secret lawsuit brought against the insured by its competitor.

  • June 25, 2024

    Nevada Judge Denies Insurers’ Summary Judgment Motion In Coronavirus Coverage Suit

    LAS VEGAS — A Nevada judge denied insurers’ joint motion for partial summary judgment in a coronavirus coverage dispute, finding that the insurers have failed to satisfy their burden of showing that a recent Nevada Supreme Court ruling controls this lawsuit and that the policies at issue expressly extend the scope of coverage afforded for the “Infectious or Contagious Disease” peril.

  • June 25, 2024

    Kentucky Panel: All Claims Arise Out Of Single Abuse Event, Subject To Sublimit

    FRANKFORT, Ky. — A Kentucky appeals panel held that all underlying claims, including negligent training, against a child care insured arise out of a single event of abuse or molestation and are, therefore, subject to the $100,000 sublimit, partly reversing a lower court’s ruling.

  • June 25, 2024

    Supermarket Sues Insurer For Bad Faith In Suit Arising From Parking Lot Shooting

    ALLEGHENY, Pa. — Giant Eagle Inc. sued an insurer for bad faith, unjust enrichment and equitable contribution/indemnification seeking to recoup the more than $450,000 that it has incurred in defending against a lawsuit alleging that a police officer who was working as an off-duty security guard unlawfully shot a man in a Giant Eagle supermarket parking lot.

  • June 24, 2024

    Panel: Professional Services Exclusion Bars D&O Coverage For Anti-Kickback Settlement

    SAN FRANCISCO — A California appeals panel on June 21 held that an insured’s loss resulting from its settlement with the United States of claims that it violated the federal Anti-Kickback Statute is barred by its primary and excess directors and officers liability insurance policies’ professional services exclusion, affirming a lower court’s ruling in favor of the insurers in the insured’s breach of contract lawsuit.

  • June 24, 2024

    Insurer’s Failure To Provide Timely Notice Renders Coverage Denial Ineffective

    BROOKLYN, N.Y. — A New York appeals court held that a commercial general liability insurer’s failure to provide a timely notice of its disclaimer of coverage to an insured for an underlying slip-and-fall lawsuit rendered its denial on the basis of the policy’s habitability exclusion and the tenant special conditions endorsement ineffective, finding that the insurer has a duty to defend and indemnify.

  • June 20, 2024

    2nd Circuit Lifts Stay Of Clothing Boutique’s Appeal In COVID-19 Coverage Suit

    NEW YORK — The Second Circuit U.S. Court of Appeals lifted the stay of a clothing boutique owner insured’s appeal of a federal district court’s order that denied its motion to alter or amend a judgment dismissing its breach of contract and declaratory judgment lawsuit seeking business interruption and property damage coverage for its losses arising from the COVID-19 pandemic and subsequent shutdown orders.

  • June 20, 2024

    Couple Appeals Tax Court Ruling On Purported Microcaptives To 5th Circuit

    NEW ORLEANS — One of three recent U.S. Tax Court rulings for the commissioner of Internal Revenue regarding purported microcaptive arrangements is being appealed to the Fifth Circuit U.S. Court of Appeals.

  • June 19, 2024

    Illinois Panel Says No Coverage Owed For Carbon Monoxide Suits Filed Against Insured

    SPRINGFIELD, Ill. — 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, the Fourth District Illinois Appellate Court said June 18 in finding that the policies’ professional services exclusion bars coverage.

  • June 19, 2024

    Federal Judge: Employee’s Suit Alleges ‘Securities Claim’ Under D&O Policy

    LOS ANGELES — A federal judge in California partly granted a biopharmaceutical company insured’s motion for judgment on the pleadings in a directors and officers liability coverage dispute, finding that a lawsuit brought by the insured’s former employee asserts a “securities claim” based on the policy’s clear language.

  • June 19, 2024

    Court Dismisses Coverage Suit Over Baltimore Sun Shooting Per Parties’ Stipulation

    CHICAGO — One day after the parties filed a stipulation of dismissal, a federal Illinois court dismissed with prejudice a lawsuit brought by Tribune Publishing Co. LLC and The Baltimore Sun Co. LLC seeking coverage for underlying wrongful death and negligence lawsuits arising from a 2018 shooting in which five newspaper employees were killed.

  • June 18, 2024

    Exclusion Bars D&O Coverage For Shareholder Dispute, 2nd Circuit Affirms

    NEW YORK — The Second Circuit U.S. Cout of Appeals on June 17 affirmed a lower federal court’s dismissal of an insured’s breach of contract and declaratory judgment lawsuit seeking directors and officers and private company liability insurance for an underlying shareholder dispute, finding that a policy exclusion barred coverage because each claim in the underlying lawsuit arose from an “actual or alleged contractual liability or obligation of” the insured or its officers under shareholder agreements.

  • June 17, 2024

    Settlement Reached In Suit Alleging Insurer Fraudulently Down-Coded Medical Devices

    MINNEAPOLIS — The manufacturer and seller of an electrotherapy medical device and its insurer told a Minnesota federal court that they have reached a settlement in principal of the insured’s breach of contract and deceptive trade practices lawsuit alleging the insurer has a “blanket corporate policy” of fraudulently down-coding and short-paying for the insured’s H-Wave medical devices that has resulted $1.3 million in injuries to the insured.

  • June 17, 2024

    Lakers, Insurer Dismiss Coronavirus Coverage Dispute In California Federal Court

    LOS ANGELES —The Los Angeles Lakers and its commercial property insurer filed a stipulation asking a California federal court to dismiss with prejudice the insured’s lawsuit arising from its property damage and business interruption claims for losses related to the COVID-19 pandemic.

  • June 17, 2024

    Insurer Disputes Coverage For Claims Daycare Gave Benadryl Without Consent

    SEATTLE — A homeowners insurer filed a lawsuit in a Washington federal court seeking a declaratory judgment that it has no duty to defend its insureds and a child care center against underlying lawsuits alleging that their minor children were given Benadryl without parental consent to promote sleepiness at nap time.

  • 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.