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

Mealey's Emerging Insurance Disputes

May 24, 2024
LTC Insurer Gets Extension To Answer Class Complaint Alleging Unfair Rate Hikes

CHICAGO — In a docket entry, an Illinois federal judge granted a long-term care (LTC) insurer an extension to answer an amended complaint in a putative class action alleging that the insurer sought premium increases in different states and for different amounts without considering policy language prohibiting nonuniform rate increases.
May 23, 2024
Failure To Settle Medical Malpractice Claim Was Not Bad Faith, Federal Judge Says

ROCKFORD, Ill. — A bad faith claim brought against a professional liability insurer for failing to settle an underlying medical malpractice claim prior to the entry of jury verdict award that was in excess of the policy limits must be dismissed because the evidence does not support a finding that the insurer acted in bad faith, an Illinois federal judge said in granting the insurer’s motion for summary judgment.
May 22, 2024
Trustee Seeks Approval Of $2.9M Settlement In Insolvent Insurer’s Bankruptcy Case

WILMINGTON, Del. — A trustee for estates in an insolvent insurer’s Chapter 7 bankruptcy proceeding filed a motion to approve a $2.9 million settlement agreement between the parties, which includes a $100,000 payment to a broker who has assisted the trustee in managing the assets in the proceeding.
May 22, 2024
2 More Insurers Dismissed In Viacom’s D&O Coverage Dispute In Delaware Court

WILMINGTON, Del. — Viacom Inc. and two more of its insurers stipulated and agreed to dismiss with prejudice the claims against the insurers in Viacom’s lawsuit seeking directors and officers liability coverage for underlying claims that its directors, officers and controlling shareholders breached their fiduciary duties in connection with a 2019 merger with CBS Corp.
May 21, 2024
8th Circuit Affirms Insurer Has Duty To Defend Against Trademark Infringement Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on May 20 affirmed a lower federal court’s finding that an insurer has a duty to defend its computer networking products reseller insured against an underlying trademark infringement lawsuit, noting that this does not resolve the issue of whether the insurer has a duty to indemnify, which will turn on the resolution of the underlying lawsuit.
May 21, 2024
7th Circuit Affirms Court In Coverage Dispute Over BIPA Violation Claims

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a lower federal court’s rulings in a coverage dispute arising from claims that the insured violated the Illinois Biometric Information Privacy Act (BIPA), finding that an umbrella insurance policy provides for defense and indemnity for the insured only after its underlying insurance and deductibles are exhausted.
May 20, 2024
5th Circuit Refuses To Rehear Dispute Over $1M Settlement Of Canceled Music Festival

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals denied an insurer’s petition to reconsider its reversal of a lower federal court’s summary judgment ruling in its favor in the insured’s lawsuit seeking coverage for an underlying $1 million class action settlement arising from the insured’s refusal to refund ticket sales for the South by Southwest festival that was canceled due to the COVID-19 pandemic, refusing to disturb its finding that the policy’s contract and professional services exclusions do not bar coverage.
May 20, 2024
Massachusetts Panel Affirms Dismissal Of Restaurants’ Coronavirus Coverage Suit

BOSTON — A Massachusetts appellate panel on May 20 affirmed a lower court’s grant of an insurer’s motion to dismiss a coverage lawsuit arising from the coronavirus pandemic, concluding that the restaurant insureds failed to demonstrate that the coronavirus physically altered or affected their insured property in any way.
May 17, 2024
Burger King Franchisee Seeks Summary Judgment In BIPA Violations Coverage Suit

CHICAGO — A franchisee of the Burger King chain moved for summary judgment in its breach of contract lawsuit asking an Illinois federal judge to declare that an excess insurer has a duty to defend it against an underlying putative class lawsuit alleging that it violated the Illinois Biometric Information Protection Act (BIPA).
May 17, 2024
Federal Judge Denies Trustee’s Motion For Final Judgment In D&O Coverage Dispute

NEW ORLEANS — A federal judge in Louisiana on May 16 denied a trustee’s motion to enter final judgment in a directors and officers coverage dispute in light of the U.S. Supreme Court’s recent decision in Smith et al. v. Spizzirri et al., rejecting the trustee’s contention that judicial economy would be best serviced by permitting a prompt appeal of the ownership issues as to all claims.
May 17, 2024
Kansas Commissioner Certifies Service Of Interrogatories In Insurer Liquidation

TOPEKA, Kan. — The Kansas insurance commissioner, as liquidator of an insolvent medical malpractice insurer, certified that she served her first set of interrogatories in the insurer’s liquidation proceedings.
May 16, 2024
Insurer Owes No Coverage For 3rd Suit Brought By Police Officer, Panel Affirms

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on May 15 affirmed a lower federal court’s ruling that an insurer has no duty to defend or indemnify its city insured against a third retaliatory lawsuit brought by a police officer, finding that the underlying action is related to two earlier lawsuits that were filed before coverage began under the policy.
May 16, 2024
Panel Amends Opinion After Insureds Seek Clarification In COVID-19 Coverage Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 15 filed an amended memorandum indicating that its reversal of a lower federal court’s denial of leave to amend a claim under an insurance policy’s Crisis Event provision applied to two sets of insureds in a coronavirus coverage dispute.
May 15, 2024
New Jersey High Court: Electric Scooter Rider Not Pedestrian, No PIP Benefits Owed

TRENTON, N.J. — A unanimous New Jersey Supreme Court on May 14 held that a low-speed electric scooter rider does not fall under the definition of “pedestrian” under the state’s No-Fault Act and that an appellant is not entitled to personal injury protection (PIP) benefits, affirming an appeals court’s ruling as modified in favor of a personal automobile insurer.
May 15, 2024
Federal Judge Stays Ghost Gun Coverage Suit Pending Ruling In First-Filed Suit

KANSAS CITY, Mo. — A federal judge in Missouri granted a commercial general liability insurer’s motion to stay an insured’s coverage lawsuit pending a New York federal court’s ruling on the insured’s motion to transfer or stay the insurer’s declaratory judgment lawsuit disputing coverage for underlying claims that the insured violated federal, state and local laws when it deliberately sold and shipped ghost gun parts and kits to New York.
May 08, 2024
COMMENTARY: R&W Lessons From Novolex Summary Judgment Decision

By Syed Ahmad, Patrick McDermott, Veronica Adams and Jae Lynn Huckaba
May 14, 2024
Ohio Panel: No Coverage Owed For Settlement Of Claims Insured Financed Terrorists

CINCINNATI — An Ohio appeals panel held that a lower court correctly granted summary judgment in favor of insurers in their lawsuit seeking a declaration that they have no duty to indemnify their mutual insured against an underlying settlement of a lawsuit alleging that it illegally financed terrorist groups in the Republic of Colombia.
May 14, 2024
9th Circuit Partly Affirms, Partly Vacates Ruling In Coverage Suit Over Lost Rent

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that unpaid rent, late fees and government fines did not trigger “property damage” coverage under a commercial general liability insurance policy but vacated the lower court’s application of the policy’s leased property exclusion and remanded for consideration of the appellant’s new evidence.
May 14, 2024
Insurer Has No Duty To Defend, Indemnify Bitcoin Theft Suit, 5th Circuit Affirms

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 13 affirmed a lower federal court’s ruling in favor of an insurer in its lawsuit disputing coverage for an underlying lawsuit alleging that insureds conspired to steal bitcoin through a malware attack, finding that the underlying action alleges only intentional acts that are not covered.
May 14, 2024
Multifamily Housing Lessor Seeks Coverage For Antitrust Conspiracy Claims In MDL

DENVER — A multifamily housing lessor insured sued its primary and excess data protection liability insurers in a Colorado federal court for breach of contract and bad faith, seeking coverage for an underlying multidistrict litigation alleging that it was involved in an antitrust conspiracy when it used a revenue management software to artificially inflate multifamily housing rents above market across the country.
May 14, 2024
Federal Judge Dismisses Lead Insurer From D&O Coverage Dispute Over SEC Subpoena

WASHINGTON, D.C. — A District of Columbia federal judge granted a joint motion filed by Federal Home Loan Mortgage Corp. (Freddie Mac) and its lead insurer to dismiss the insurer from 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.
May 08, 2024
COMMENTARY: Bad Faith As A Substitute For Prejudice In Reinsurance Late Notice Disputes

By Robert M. Hall
May 13, 2024
Appellant Seeks Rehearing Of No Coverage Ruling In Dispute Over Gold Treasure

SEATTLE — An appellant on May 10 asked the Ninth Circuit U.S. Court of Appeals to rehear its April 26 opinion that affirmed a lower federal court’s summary judgment ruling in favor of an ocean marine general liability insurer in a declaratory judgment lawsuit disputing coverage for an underlying $7.5 million covenant judgment that resolved claims that the appellant was denied possession and use of the tangible and intangible work product that was created during gold salvage expeditions.
May 13, 2024
U.S. High Court Refuses To Review Suit Alleging State Farm Agents Were Negligent

WASHINGTON, D.C. — The U.S. Supreme Court on May 13 denied insureds’ petition for a writ of certiorari seeking review of a Ninth Circuit U.S. Court of Appeals’ ruling that affirmed a lower federal court’s grant of an automobile liability insurer’s motion for summary judgment and denied the insureds’ motion to certify questions to the Montana Supreme Court in their lawsuit alleging that the insurer’s agents were negligent in failing to explain or offer underinsured motorist coverage when they purchased their automobile liability policies.
May 13, 2024
Delaware Judge Grants Insurers’ Motion To Dismiss D&O Coverage Dispute

WILMINGTON, Del. — A Delaware judge granted insurers’ motions to dismiss a company and its chief executive officers’ lawsuit seeking directors and officers liability coverage for an underlying lawsuit alleging that they undersold the value of investors’ shares in the company and its parent company, finding that the “No Action” clause and “prior notice” exclusion in various policies relieve the insurers of their coverage obligations.