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

Mealey's Emerging Insurance Disputes

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.
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.