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

Mealey's Emerging Insurance Disputes

April 16, 2025
Denial Of Arbitration In D&O Coverage Dispute Affirmed By 2nd Circuit

NEW YORK — A Second Circuit U.S. Court of Appeals panel on April 15 affirmed the denial of an insurer’s motion to compel a dispute over coverage owed to directors and officers of a bankrupt health care corporation be arbitrated before the London Court of International Arbitration (LCIA), opining that the bankruptcy trustee is not acting as policyholder in the dispute.
April 16, 2025
No E&O Coverage Owed For $262,500 Insured Paid To Hospital, 5th Circuit Affirms

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 15 affirmed summary judgment in favor of a managed care organization’s errors and omissions insurer in the insured’s bad faith lawsuit seeking coverage for the $262,500 it paid to a hospital to settle an underlying claim, finding that no coverage exists because the insured paid the underlying claim without the insurer’s prior consent.
April 16, 2025
6th Circuit: No Coverage Owed For Trademark Infringement Suit Against Pharmacy

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of insurers in a pharmacist insured’s breach of contract lawsuit seeking coverage for underlying trademark infringement and false advertising claims brought by a subsidiary of Johnson & Johnson, finding that one policy’s professional services exclusion barred coverage and the other policy was not triggered because the underlying lawsuit was not brought by “natural persons.”
April 16, 2025
Georgia Federal Court Dismisses Coverage Dispute Over Wrongful Death Claim

ATLANTA — One day after a commercial general liability insurer filed a notice asking a Georgia federal court to dismiss its lawsuit seeking a declaration that it has no duty to defend or indemnify its tavern operator insured for an underlying wrongful death lawsuit, the court clerk approved the dismissal.
April 16, 2025
Insureds Seek Coverage For 11 Suits Alleging Human Trafficking At Red Roof Hotels

COLUMBUS, Ohio — Insured hotel companies sued their general liability insurer in an Ohio federal court for breach of contract and bad faith, alleging that the insurer arbitrarily and capriciously denied coverage for 11 underlying lawsuits alleging that human trafficking occurred at various Red Roof hotels.
April 15, 2025
Stipulation Filed In Fraudulent Transfer Case After Insurer Liquidation Settlement

TOPEKA, Kan. — After being advised that settlement agreements were approved by a Kansas state court, parties in a fraudulent transfer case in Kansas federal court involving the insolvent insurer filed a stipulation of dismissal.
April 15, 2025
Bad Faith Suit: CFPA Systematically Failed To Investigate, Pay Wildfire Claims

LOS ANGELES — Plaintiffs sued California Fair Plan Association (CFPA) and its “largest” members for breach of contract and bad faith in a California court, seeking compensation for their losses incurred by the January Los Angeles wildfires and to hold CFPA “accountable for its decade-long, systematic failure to properly investigate and pay wildfire claims.”
April 15, 2025
Skechers Seeks Coverage For Injury Claims Caused By Shoes’ Lack Of Slip-Resistance

LOS ANGELES — Skechers USA Inc. sued its commercial liability insurer in a California court for breach of contract, breach of the implied covenant of good faith and fair dealing and unfair competition, alleging that the insurer has a duty to defend it against an underlying action contending that class members were harmed by actual physical accidents caused by the insured’s shoes’ lack of slip-resistance or by the fact that the shoes were unusable.
April 14, 2025
Insured Dismisses 1 Insurer In Coverage Dispute Over Earplug Product Liability Claims

WILMINGTON, Del. — Plaintiffs and one of their liability insurers filed in a Delaware court a stipulation and proposed order of voluntary dismissal with prejudice of all claims between them in a coverage lawsuit arising from an underlying earplug product liability multidistrict litigation that resulted in a $6 billion settlement and millions of dollars in defense costs.
April 14, 2025
Insured Appeals No Coverage Ruling In Dispute Arising From Opioid Epidemic

TAMPA, Fla. — An insured told Florida federal court that it is asking the 11th Circuit U.S. Court of Appeals to review the court’s judgment in favor of insurers in its lawsuit seeking coverage for underlying actions arising from the opioid epidemic, challenging the court’s finding that the insurers have no duty to defend or indemnify because the opioid lawsuits fail to allege damages “for bodily injury” or “because of bodily injury.”
April 14, 2025
Potbelly Sandwich Shop Owner Sues Employment Practices Liability Insurer

SEATTLE — The owner and operator of several Potbelly Sandwich Shops in Washington state sued its employment practices liability insurer in a Washington court, alleging breach of contract and seeking a declaratory judgment that the insurer has a duty to defend and indemnify it against an underlying putative class alleging that it violated the Washington Equal Pay and Opportunities Act by not providing wage and salary information to job applicants in Washington.
April 09, 2025
COMMENTARY: The Ultimate Social Inflation Survival Guide: Containing Rising Claims Costs In A World Rife With Economic Inflation, Litigation Funding, Nuclear Verdicts, And Anti-Corporate Sentiment

By Scott M. Seaman
April 11, 2025
Panel: No E&O Coverage Owed For $13.3M Insurer Paid To Settle Wrongful Death Action

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 10 affirmed a lower federal court’s grant of summary judgment in favor of errors and omissions insurers, concluding that the E&O insurers have no duty to provide coverage for the loss a general liability insurer incurred when it paid a $13.3 million judgment in a wrongful death action brought against its motel owner insured.
April 11, 2025
Illinois Genetic Privacy Act Does Not Apply To Life Insurance, Judge Rules

EAST ST. LOUIS, Ill. — The Illinois Genetic Privacy Act (GIPA) “does not apply to the underwriting practices concerning life insurance policies,” an Illinois federal judge found, granting an insurer’s motion to dismiss a putative class claim under GIPA brought against it by a woman who claimed that she was denied a life insurance policy based on information she provided about her family’s medical history.
April 10, 2025
4th Circuit: Insurer Does Not Have To Contribute To $9M Wrongful Death Settlement

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals reversed a lower federal court’s ruling that a defendant insurer has to contribute $1 million in primary coverage to an underlying $9 million wrongful death settlement and affirmed the lower court’s finding that the defendant insurer’s excess coverage was not triggered, concluding that both coverages were limited to employees of Surry County, N.C., Emergency Services and did not extend to employees of Surry County's 911 call center.
April 10, 2025
Delaware Judge Dismisses 1 Insurer In Coverage Dispute Over Medicaid Fraud Claims

WILMINGTON, Del. — Three days after an insured and one of its insurers filed a stipulation asking a Delaware court to dismiss with prejudice all claims against the insurer in a professional liability coverage dispute arising from a Medicaid fraud investigation, the judge ordered the case against the insurer dismissed.
April 09, 2025
Federal Judge Dismisses CGL Coverage Dispute Arising From Fatal Shooting

NEWNAN, Ga. — Three days after parties filed a stipulation of dismissal, a federal judge in Georgia dismissed a commercial general liability insurer’s declaratory judgment lawsuit challenging coverage for a wrongful death/premises liability lawsuit brought against a Quality Inn & Suites.
April 08, 2025
Judge: Insurers Fail To Allege Subrogation Claims In Suit Over Ransomware Attack

WILMINGTON, Del. — A Delaware judge granted an application service provider’s motion to dismiss with prejudice insurers’ amended complaints because the insurers failed to properly assert subrogation claims seeking recovery from the provider for the amount paid to nonprofit insureds for investigative and remediation steps arising from a ransomware attack.
April 08, 2025
Insurers: ‘Had SCE Acted Responsibly, The Eaton Fire Could Have Been Prevented’

LOS ANGELES — Insurers have filed a subrogation lawsuit alleging negligence and inverse condemnation against Southern California Edison Co. (SCE) in a California court, alleging that the Eaton fire could have been prevented had the defendant acted responsibly.
April 08, 2025
6th Circuit Refuses To Reconsider No Coverage Ruling In Professional Liability Suit

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied an appellant’s petition for panel rehearing and rehearing en banc, refusing to reconsider its finding that her declaratory judgment and bad faith claims fail because she did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured.
April 07, 2025
Multiple Claims Alleged By Insured In Faulty Work Coverage Suit Dismissed

NEWARK, N.J. — A New Jersey federal judge granted a professional liability insurer’s motion to dismiss an insured’s claims alleging breach of contract, bad faith, unjust enrichment and declaratory judgment after determining that the insured failed to identify a policy provision that was breached and failed to show that the insurer’s denial of coverage for an underlying suit related to the insured’s architectural work was unreasonable.
April 07, 2025
Missouri Panel Partly Reverses Ruling In Insurer’s Favor In COVID-19 Coverage Suit

KANSAS CITY, Mo. — A Missouri panel affirmed in part and reversed in part an insured’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the court cannot hold that one of the insurers was entitled to judgment as a matter of law under its primary “all-risk” property insurance policy’s Pollution Contamination exclusion and the master policy's Mold, Mildew & Fungus Clause and Microorganism exclusion on the insured’s claims for loss of attraction coverage.
April 03, 2025
Amici Support Auto Insurers In U.S. High Court Dispute Over Class Decertification

WASHINGTON, D.C. — The Chamber of Commerce of the United States of America, the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies, as well as the Washington Legal Foundation, filed amicus curiae briefs in the U.S. Supreme Court in support of automobile insurers, challenging a majority of the Ninth Circuit U.S. Court of Appeals’ conclusion that a lower court abused its discretion when it decertified a negotiation class because the insureds established that “injury could be calculated on a class-wide basis.”
April 03, 2025
Citing Settlement Negotiations, Judge Denies Motions In D&O Coverage Row

INDIANAPOLIS — Noting that the “parties report they are in the process of finalizing a formal settlement agreement,” an Indiana federal judge denied without prejudice a motion for oral argument and the parties’ cross-motions for summary judgment in a suit filed by an insurer now in rehabilitation seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
April 02, 2025
Petition Distributed In High Court In Row Over Status Of Underwriting Association

WASHINGTON, D.C. — The U.S. Supreme Court on April 1 distributed for conference a petition filed by the state-created Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides coverage to health care providers, including those previously insured by insurers in liquidation, seeking review of a Third Circuit U.S. Court of Appeals ruling holding that the JUA did not have constitutional rights to challenge the constitutionality of Pennsylvania laws due to JUA’s nature as a public entity instead of a private one.