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

Mealey's Emerging Insurance Disputes

November 13, 2024
Panel: Jury’s Finding Of Defamation Established Willful Act, No Coverage Owed

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Nov. 12 affirmed a lower federal court’s grant of an insurer’s motion to dismiss an insured’s breach of contract and bad faith lawsuit seeking coverage for a $4,941,071 judgment in a defamation action brought by its former employee, finding that the underlying jury's finding of defamation per se established a willful act under California Insurance Code Section 533.
November 13, 2024
Judge Partially Denies Freddie Mac’s Summary Judgment Motion In D&O Coverage Suit

WASHINGTON, D.C. — A federal judge in Washington, D.C., granted in part and denied in part a motion for partial summary judgment brought by Federal Home Loan Mortgage Corp. (Freddie Mac) in its breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
November 12, 2024
Insurers Say Kia, Hyundai Disregarded Dangerous Defects For Years

SANTA ANA, Calif. — Several insurers filed a complaint in subrogation in California state court accusing the makers of Kia and Hyundai-brand cars of causing insureds harm in violation of California’s unfair competition law (UCL) by failing to report or recall vehicles with dangerous electrical defects, including spontaneously catching fire while deactivated.
November 12, 2024
California Panel Affirms Ruling In Insurer’s Favor In Vicarious Liability Suit

LOS ANGELES — A California appeals court affirmed a lower court’s summary judgment ruling in favor of a homeowners insurer in an insured’s lawsuit alleging that the insurer was vicariously liable for the negligence of an insurance agent that resulted in the insured’s underinsurance for a fire loss to her Malibu property under a California FAIR Plan Association insurance policy, concluding that the insured failed to present evidence that raises a triable issue as to whether the agent was the defendant insurer’s agent when she assisted the insured in procuring the FAIR Plan policy.
November 12, 2024
Insurer Asks Georgia Federal Court To Find No Coverage Owed For Wrongful Death Suit

ATLANTA — A commercial general liability insurer filed a lawsuit in a Georgia federal court, seeking a declaration that it has no duty to defend or indemnify its tavern operator insured against an underlying wrongful death lawsuit, asserting that the underlying bodily injury did not take place at the policy’s “Designated Location” to trigger coverage and the policy’s “assault and battery,” “expected or intended injury,” “liquor liability” and “duty to defend” exclusions bar coverage.
November 12, 2024
9th Circuit Grants Coach’s Motion To Dismiss Appeal In Sexual Abuse Coverage Suit

SEATTLE — The Ninth Circuit U.S. Court of Appeals granted a coach insured’s motion to voluntarily dismiss his appeal of a Washington federal court’s finding that a homeowners insurer has no duty to defend or indemnify him for an underlying sexual abuse lawsuit.
November 11, 2024
Insured Asks 4th Circuit To Reconsider No Coverage Ruling For Cryptocurrency Loss

RICHMOND, Va. — An insured filed a petition seeking a rehearing or rehearing en banc of the Fourth Circuit U.S. Court of Appeals’ affirmation of a lower court’s dismissal of his breach of contract lawsuit seeking homeowners insurance coverage for his alleged $170,000 cryptocurrency loss, challenging the courts’ findings that the loss of cryptocurrency is not a “direct physical loss” to trigger policy coverage.
November 08, 2024
No Coverage Owed For Business Owner Who Killed Intruder, Kentucky Panel Affirms

FRANKFORT, KY. — A Kentucky appeals court on Nov. 8 affirmed a lower court’s ruling that a general liability insurer owes no coverage for an underlying wrongful death lawsuit brought against a business owner insured who shot and killed an intruder, rejecting the insured’s argument that the shooting was an accident.
November 08, 2024
N.Y. Appeals Court: Evidence Conclusively Established Insurer Did Not Act In Bad Faith

BROOKLYN, N.Y. — A New York appeals court concluded that a lower court should have granted an insurer’s motion to dismiss an insured’s bad faith claim in a coverage dispute over an underlying personal injury lawsuit but found that the lower court properly determined that the insurer failed to establish that coverage was barred under the policy’s employee exclusion.
November 08, 2024
Insurers Dispute Coverage For BIPA Violation Class Action Against Taco Bell Owners

NEW ORLEANS — Commercial general liability and umbrella insurers filed a complaint in an Illinois federal court seeking a declaratory judgment that they have no duty to defend and indemnify against an underlying class action lawsuit alleging that the owners and operators of Taco Bell restaurants in Illinois violated the state’s Biometric Information Privacy Act (BIPA).
November 07, 2024
No Coverage Owed For Alleged Sexual Assault By Insured, 9th Circuit Affirms

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals held that an insurer owes no coverage for an underlying sexual assault action brought against the insured, affirming the lower federal court’s grant of summary judgment in favor of the insurer in the insured’s breach of contract and bad faith lawsuit.
November 06, 2024
Theft Claim Is Time-Barred By Policy’s Limitations Period, Panel Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s finding that a man’s $126,000 theft claim is time-barred by his homeowners insurance policy’s one-year limitations period, rejecting the insured’s contention that California’s Emergency Rule 9 tolls the limitations provision.
November 05, 2024
5th Circuit Rejects Insurer’s Argument In Coverage Dispute Over LSU Hazing Death

NEW ORLEANS — The Fifth Circuit U.S Court of Appeals on Nov. 4 affirmed a lower federal court’s ruling against an excess homeowners insurer in lawsuit brought by the parents of a Louisiana State University (LSU) freshman who died in 2017 of alcohol poisoning following a fraternity hazing incident, finding that the lower federal court did not err by denying the insurer’s motion for summary judgment on the applicability of its policy exclusions.
November 05, 2024
Freddie Mac, Insurer Move To Dismiss Claims Between Them In D&O Coverage Suit

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and an insurer filed a joint stipulation asking a Washington federal court to dismiss the claims between them in Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
November 04, 2024
Insurer: No D&O Coverage Owed For Claims Insured’s Employee Mishandled Corpse

CHICAGO — An insurer filed suit in an Illinois federal court seeking a declaratory judgment that it has no duty to defend and indemnify against an underlying lawsuit alleging that its insured’s employee mishandled the remains of a decedent whose body was donated for research, arguing that directors and officers and entity liability (D&O) coverage is barred by the policy’s professional services, medical service, contract and bodily injury exclusions.
October 31, 2024
Judge Grants Final Approval To Nearly $20M Settlement Of Ticket Insurance Suit

SAN FRANCISCO — A California federal judge granted final approval to a nearly $20 million settlement resolving claims that insurers including Allianz Global Assistance (AGA) violated California’s unfair competition law (UCL) and other laws in relation to its online marketing of travel and event insurance, with the plaintiffs’ attorneys awarded nearly $5 million in attorney fees.
October 30, 2024
Tennessee Panel Affirms Default Ruling In Coverage Suit Over Wrongful Death Claim

NASHVILLE, Tenn. — A Tennessee appeals panel affirmed a lower court’s ruling that denied a defendant’s request to set aside a default that was entered against her in an insurer’s lawsuit disputing coverage for an underlying wrongful death claim, rejecting the defendant’s argument that a deputy failed to effectuate valid service of process of the complaint.
October 30, 2024
Insurer Removes City Of New York’s Coverage Suit To Federal Court

BROOKLYN, N.Y. — An insurer removed to a New York federal court the city of New York’s declaratory judgment lawsuit seeking additional insured coverage for an underlying negligence action brought on behalf of a decedent who died while staying at a city shelter.
October 29, 2024
Federal Judge Stays Dismissal Of Philadelphia Eagles’ COVID-19 Coverage Dispute

PHILADELPHIA — A federal judge in Pennsylvania stayed his dismissal of a lawsuit brought by the owner and operator of the Philadelphia Eagles football organization seeking a declaration as to coverage for its losses arising from the COVID-19 pandemic pending a ruling on the insured’s motion for reconsideration.
October 29, 2024
Judge: Court Lacks Jurisdiction Over Coverage Dispute Arising From Abuse Claims

TRENTON, N.J. — A New Jersey federal judge on Oct. 28 granted the Diocese of Trenton’s motion to dismiss a general liability insurer’s declaratory judgment lawsuit challenging coverage for underlying abuse lawsuits, finding that the district court lacks subject matter jurisdiction to adjudicate the insurer’s claims because the insurer “relies on a strictly hypothetical controversy that may never occur.”
October 29, 2024
4th Circuit Refuses To Certify Question In Suit Over Lender’s Insurance Premiums

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied a motion by a plaintiff in a putative class action to certify “an important question of law” to the Maryland Supreme Court in his appeal arguing that the Credit Grantor Closed End Credit Provisions (CLEC) “strictly prohibit” a mortgage lender’s charge of insurance premiums in connection with a loan and seeking reversal of a lower federal court’s ruling that granted the lender’s motion for judgment.
October 28, 2024
Panel Refuses To Vacate Ruling In Favor Of Professional Liability Insurer

ATLANTA — A panel of the 11th Circuit U.S. Court of Appeals denied a request by assignees of an accounting services provider insured to vacate its ruling that affirmed a lower federal court’s grant of summary judgment in favor of a professional liability insurer in their breach of contract lawsuit.
October 28, 2024
Michigan Supreme Court Refuses To Review Ruling In Favor Of Insurance Agent

LANSING, Mich. — The Michigan Supreme Court on Oct. 28 denied an insured’s request for leave to appeal an appeals court’s ruling that affirmed a lower court’s grant of summary disposition in favor of an insurance agent and agency in its negligence lawsuit arising from its lack of flood coverage.
October 28, 2024
More Briefing Ordered In Microcaptive Case Involving Economic Substance Doctrine

WASHINGTON, D.C. — A U.S. Tax Court judge who is presiding over consolidated cases involving purported microcaptive insurance companies and considering the “economic substance doctrine” in regard to the remaining issue of accuracy-related penalties has directed the parties to file simultaneous briefs by Dec. 19.
October 28, 2024
Insurer: No Employment Practices Liability Coverage Owed For 2 Class Actions

SEATTLE — An insurer filed suit in a Washington federal court seeking a declaration as to employment practices liability coverage for two underlying putative class actions alleging that its insureds violated state law requiring employers to disclose the range in salary for posted job openings.