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

Mealey's Emerging Insurance Disputes

July 29, 2024
Judge Denies Underwriter’s Dismissal Bid In Yacht Damage Coverage Row With Insurer

KANSAS CITY, Kan. — A Kansas federal judge denied an insurance underwriter’s motion to dismiss a coverage dispute in which an insurer seeks a determination that a yacht that was damaged is excluded from coverage, finding that because the court previously decided that it had jurisdiction over the underwriter, the underwriter’s renewed request for dismissal is denied as an “attempt to take a second bite from the proverbial apple.”
July 29, 2024
No Coverage Owed For Fire Damage To Insured’s Cannabis Crops, Insurer Argues

NEW HAVEN, Conn. — An insurer moved for summary judgment in its declaratory judgment lawsuit disputing coverage for the insured’s claim for losses arising from an exploding lamp that caused fire damage to 998 marijuana plants, arguing to a Connecticut federal court that the insured’s flowering room’s two-month unavailability had no effect on its production process to warrant business income coverage and the insured’s only purported losses stem from its inability to sell cannabis products that were derived from the fire-damaged crops and property.
July 26, 2024
Judge Tosses Coverage Suit Over Day Care Negligence For Lack Of Jurisdiction

ST. LOUIS — A federal judge in Missouri on July 25 dismissed without prejudice an insurer’s lawsuit disputing coverage for an underlying negligence claim against a day care worker who pleaded guilty to assault against a minor, finding that the insurer’s lawsuit fails to present a controversy appropriate for judicial determination.
July 26, 2024
Panel: Auto Insurer Owes No Coverage For Wrongful Death Suit Arising From Shooting

CLEVELAND — An Ohio appeals panel on July 25 affirmed a lower court’s ruling that an automobile insurer has no duty to defend or indemnify its off-duty police officer insured against an underlying wrongful death lawsuit arising from a fatal shooting, finding that it was not the insured’s “ownership, maintenance, or use” of his vehicle that led to the underlying death.
July 26, 2024
Judge: Sexual Abuse Claims Against Coach Are Not ‘Occurrences’; No Coverage Owed

TACOMA, Wash. — A federal judge in Washington granted a homeowners insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify its insured against an underlying sexual abuse lawsuit, concluding that the underlying claims of intentional sexual abuse are not accidental and, as a result, do not constitute an “occurrence” to trigger policy coverage.
July 26, 2024
Plaintiffs Drop Lloyd’s From U.S. Suit Over Warehouse After English Ruling

NEW YORK — A group of defendants whose presence was deemed to cause subject matter jurisdiction problems has been dismissed under a stipulation approved by a New York federal judge in a $41 million suit over whether policies obtained for a warehouse in Afghanistan are insurance or reinsurance and whether fraud or negligence were involved.
July 25, 2024
Insurer Fails To Show Insured’s Concealment Of Commercial Fireworks Was Intentional

BISMARCK, N.D. — A federal judge in North Dakota on July 24 ruled in favor of an insured in a homeowners insurer’s declaratory judgment lawsuit disputing coverage for underlying property damage and personal injuries caused by a fireworks explosion, finding that the policy’s misrepresentation provision does not bar coverage because the insured did not willfully conceal or misrepresent any material facts regarding his use and storage of commercial fireworks at his Bismark property.
July 23, 2024
Pollution Exclusion Bars Coverage For Gasoline Leak, Panel Says In Reversing

FRANKFORT, Ky. — The Kentucky Court of Appeals reversed a trial court’s ruling entered against an insurer in a coverage dispute over damages caused by a gasoline leak because the policy’s pollution exclusion applies as a bar to coverage based on the conclusion that gasoline is a pollutant when it leaks from an underground storage tank and damages a neighboring property.
July 23, 2024
Insureds: Insurers’ ‘Greed’ Put ‘Selfish Profits’ Ahead Of Maui Wildfire Victims

MAUI, Hawaii — Insureds sued their insurers for bad faith in a Hawaii court, alleging that the insurers’ subrogation lawsuit seeking to recover compensation for the payments that they made to victims of the Aug. 8, 2023, Maui wildfires is “unfair, inequitable, and unlawful” because they “seek to take money away from their premium-paying insureds who are the real victims of the Maui Wildfires without showing that these victims have been fully compensated.”
July 23, 2024
9th Circuit: California High Court’s Answer Resolves Appeal In Insurer’s Favor

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on July 22 affirmed a lower federal court’s ruling in favor of an insurer after the California Supreme Court answer “no” to the panel’s certified question and found that the “actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
July 23, 2024
Former Modell CEO’s Appeal Withdrawn In D&O Coverage Dispute

NEW YORK — One day after the parties filed an agreement and joint stipulation of dismissal, the Second Circuit U.S. Court of Appeals dismissed the appeal of the former chief executive officer of the now bankrupt Modell’s Sporting Goods Inc. (MSGI) seeking review of a lower federal court’s ruling that granted a directors and officers liability insurer’s motion to dismiss his breach of contract and declaratory judgment lawsuit.
July 22, 2024
Insurer Owed Contribution Toward $6M Wrongful Death Settlement, Ohio Panel Affirms

DAYTON, Ohio — An Ohio appeals panel on July 19 affirmed lower court’s finding that an electric company appellant has to contribute $2.4 million toward a $6 million settlement that an insurer paid on behalf of its insured to settle an underlying wrongful death lawsuit, rejecting the appellant’s contention that the insurer’s contribution claim was time-barred.
July 22, 2024
Contamination, Pollution Exclusion Bars Coverage For Coronavirus Losses

TOPEKA, Kan. — The Kansas Court of Appeals on July 19 affirmed a trial court’s ruling in favor of all-risk insurers that denied coverage for COVID-19 losses sustained by an insured because the policies’ contamination or pollution exclusion bars coverage for any contamination, seepage or pollution that endangers or threatens to endanger the health, safety or welfare of individuals.
July 22, 2024
Judge Dismisses Insurer’s Subrogation Claims For Products Liability, Negligence

BALTIMORE — A federal judge in Maryland granted a defendant’s motion to dismiss an insurer’s subrogation suit alleging products liability and negligence claims, finding that the insurer has failed to allege sufficient facts to state plausible claims against the defendant as a successor to the company that marketed, sold and distributed a light fixture that contained a lamp that “catastrophically exploded” and caused a fire at a property that was leased by its cannabis producer insured.
July 22, 2024
Judge Stays Suit Pending Arbitration Between New Orleans Aviation Board, Insureds

NEW ORLEANS —A federal judge in Louisiana granted the New Orleans Aviation Board’s (NOAB)’s motion to stay litigation pending arbitration with insureds in a coverage dispute stemming from construction damages at a city airport, finding that a discretionary stay is warranted “to maintain control” of the court docket and “efficiently resolve” the lawsuit.
July 22, 2024
Judge Largely Rules For Insurers In Coverage Suit Over Earplug Liability Claims

WILMINGTON, Del. — A Delaware judge largely ruled in favor of liability insurers in a lawsuit seeking coverage for an underlying earplug product liability multidistrict litigation that resulted in a $6 billion settlement and millions of dollars of defense costs, finding that the plaintiffs have failed to demonstrate that there is no genuine issue of material fact regarding their satisfaction of the self-insured retention under any of the insurance policies.
July 19, 2024
California Supreme Court Says UCL Suit Against Insurer Not Time-Barred

SAN FRANCISCO — The California Supreme Court on July 18 reversed an appellate panel’s affirmance of the dismissal as time-barred of an insured’s lawsuit against her property insurer for failure to properly investigate a claim, finding that the panel should have applied the four-year statute of limitations under California’s unfair competition law (UCL) to her UCL claim for injunctive relief.
July 19, 2024
Panel: Insurer Entitled To Judgment Under Premises Liability Of Louisiana Civil Code

SHREVEPORT, La. — A Louisiana appeals panel affirmed a lower court’s finding that an insurer is entitled to judgment as a matter of law under the premises liability of Louisiana Civil Code Article 2317.1, finding that, under the risk-utility balancing test in Farrell v. Circle K Stores Inc., an “allegedly hazardous condition was not an unreasonably dangerous condition.”
July 19, 2024
Insurer Disputes D&O Coverage For Fraudulent Inducement Lawsuit

CHICAGO — An insurer filed suit in an Illinois federal court, seeking a declaration that it has no duty to defend or indemnify against an underlying lawsuit alleging that a seller and its venture capital sponsor defrauded buyers into purchasing the company SwervePay LLC.
July 15, 2024
Panel Affirms Court’s Rulings In Coverage Suit Arising From Global Product Recall

NEW YORK — A New York appeals court held that a lower court properly determined that coverage for an insured’s losses arising from a global product recall was excluded under the prior notice exclusion in the insured’s year one policy, further finding that the lower court properly determined that fact issues preclude summary judgment as to coverage under the insured’s year two policy.
July 18, 2024
Insurers, Hotel Settle Coverage Dispute Arising From Secret Recording Of Guest

ATLANTA — A hotel insured and its insurers filed a notice in a Georgia federal court indicating that they have reached a resolution of coverage dispute arising from an underlying negligence, premises and vicarious liability lawsuit alleging that the insured’s employee secretly recorded a hotel guest while she was showering.
July 18, 2024
Federal Judge: Yacht Owner Breached Express Warranty, Maritime Insurance Policy Void

PHILADELPHIA — A federal judge in Pennsylvania granted a marine insurer’s motion for summary judgment in its lawsuit seeking a declaratory judgment that the yacht owner insured’s failure to recertify or inspect its fire-suppression equipment rendered its maritime insurance policy void from the beginning, finding that the insured breached the express warranty.
July 17, 2024
Magistrate Extends Response Filing Time For D&O Insurers In Coverage Dispute

INDIANAPOLIS — Without providing an explanation, an Indiana federal magistrate judge granted in part defendant insurers’ motion for extension to respond to a summary judgment motion filed by an insurer now in rehabilitation in its suit against them seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
July 16, 2024
Judge Allows Insurer To Seal Portions Of Complaint Disputing Coverage For Diocese

SANTA ANA, Calif. — A federal judge in California on July 15 granted an insurer’s administrative motion to seal references to confidential information and documents in its declaratory judgment lawsuit disputing coverage for underlying sexual abuse lawsuits brought under the California Child Victims Act against The Roman Catholic Bishop of Orange.
July 16, 2024
No Liquor Liability Coverage Owed For Dramshop Dispute, 10th Circuit Affirms

DENVER — The 10th Circuit U.S. Court of Appeals held July 15 that a lower federal court did not err in concluding that a liquor liability insurance policy’s assault and battery exclusion unambiguously barred coverage for an underlying dramshop claim brought against the insured, affirming a lower federal court’s grant of the insurer’s motion to dismiss a breach of contract and bad faith lawsuit brought by the insured’s assignee.