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

Mealey's Emerging Insurance Disputes

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.
July 15, 2024
Panel Affirms No Coverage Ruling In Manufacturer’s Coronavirus Coverage Suit

NEW YORK — The Second Circuit U.S. Court of Appeals on July 12 affirmed a lower federal court’s judgment in favor of an insurer in a manufacturer insured’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic, saying it is “unpersuaded” that the adsorption of coronavirus particles constitutes physical loss or damage under both the policy language and Connecticut law.
July 15, 2024
Judge: Diversity Jurisdiction Standards Not Met In $41M Suit Over Warehouse

NEW YORK — In a ruling springing from what she called the “unique structure” of Certain Underwriters of Lloyd’s, London, a New York federal judge concluded that “the record does not contain sufficient allegations of fact to support complete diversity of citizenship” 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 15, 2024
California High Court Dismisses Tribe’s Appeal In Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court dismissed an Indian tribe insured’s appeal of a state appellate court’s finding that the insured and its experts failed to present sufficient evidence to demonstrate that the coronavirus caused property damage to the tribe’s casino and resort.
July 15, 2024
Judge Enters Take-Nothing Judgment In Coverage Dispute Over Wrongful Termination

WEST PALM BEACH, Fla. — A federal judge in Florida entered a take-nothing judgment in favor of a primary insurer in an insured’s lawsuit seeking coverage under a professional liability, directors and officer's liability and fiduciary liability insurance policy for underlying claims that he was wrongfully terminated by his former employer.
July 12, 2024
Panel Affirms No Coverage Ruling In Television Producer’s Coronavirus Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 11 affirmed a lower federal court’s grant of an insurer’s motion for judgment on the pleadings in a television series producer insured’s breach of contract lawsuit seeking coverage for its losses incurred from coronavirus-related disruptions and delays in the production of its show, rejecting the insured’s contention that the lower court should have permitted it to present extrinsic evidence before it granted the insurer’s motion.
July 12, 2024
Federal Judge Refuses To Dismiss Coverage Dispute Over False Advertising Claims

LOS ANGELES — A federal judge in California denied a professional liability insurer’s motion to dismiss insureds’ breach of contract and bad faith lawsuit seeking coverage for an underlying putative class action alleging that they falsely advertised a penis enlargement device, finding that the court is unable to determine as a matter of law that the insureds’ alleged statements and omissions fail to arise out of work performed by the insureds that involves “specialized training, knowledge and skill in the pursuit of urology, including surgery.”
July 12, 2024
Clothing Boutique, Insurer Withdraw 2nd Circuit Appeal In Coronavirus Coverage Suit

NEW YORK — An insurer and its clothing boutique owner insured stipulated that the insured’s appeal in 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 has been withdrawn with prejudice from the Second Circuit U.S. Court of Appeals.
July 10, 2024
N.J. Panel Reverses Ruling In Favor Of Pharmaceutical Company In D&O Coverage Suit

TRENTON, N.J. — A New Jersey appeals panel on July 9 held that a lower court failed to consider the effect of the capacity exclusion in a directors and officers liability insurance policy, reversing the lower court’s rulings in favor of a pharmaceutical company insured in its declaratory judgment lawsuit seeking coverage for an underlying lawsuit and remanding.
July 10, 2024
Louisiana Majority Reverses Coverage Ruling In Suit Over Damaged Farm Equipment

SHREVEPORT, La. — A majority of a Louisiana appeals court reversed a lower court’s ruling that an insurance policy provided coverage for damaged farm irrigation equipment but affirmed the lower court’s ruling in favor of the insurer on the insured’s claims for detrimental reliance and bad faith penalties.
July 10, 2024
Insurer Disputes Coverage For BIPA Suits Over Food Phone Orders Handled By AI

CHICAGO — A businessowners insurer filed suit in an Illinois federal court seeking a declaratory judgment that it owes no coverage for two underlying putative class action lawsuits alleging that its insured and two franchise restaurants violated the Illinois Biometric Information Privacy Act (BIPA) when they used the insured’s voice artificial intelligence technology to handle phone orders from customers.
July 10, 2024
Excess Insurer Dismissed From Professional Liability Coverage Suit In Delaware Court

WILMINGTON, Del. — Parties in a professional liability coverage dispute filed a stipulation to dismiss with prejudice all claims against one excess insurer in the insured’s breach of contract lawsuit seeking coverage for three underlying class action lawsuits alleging that it failed to disclose material information regarding the potential of future long-term care (LTC) insurance policy rate increases.
July 09, 2024
4th Circuit Review Sought In Suit Challenging Lender’s Charge Of Insurance Premiums

RICHMOND, Va. — A plaintiff in a putative class action challenging a mortgage lender’s charge and collection of the insurance premiums asked the Fourth Circuit U.S. Court of Appeals to review a Maryland federal court’s finding that the 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.
July 08, 2024
Texas Panel Affirms No Coverage Ruling In Restaurants’ Suit Arising From Pandemic

DALLAS — A Texas appeals panel affirmed a lower court’s grant of a commercial property insurer’s motion for summary judgment in two restaurant group insureds’ lawsuit seeking coverage for their business interruption losses arising from the coronavirus pandemic, concluding that the insureds failed to present “more than a scintilla of evidence to create a genuine issue of material fact that COVID-19 caused ‘direct physical loss of or damage to’” to their restaurants.
June 26, 2024
COMMENTARY: Compliance With Ambiguous Notice Requirements: A Familiar Rule “Or” An Outlier?

By Syed S. Ahmad and Yosef Y. Itkin
July 02, 2024
Homeowners Insurer Disputes Coverage For Wire Fraud Suit Brought Against Insured

NEW HAVEN, Conn. — A homeowners insurer filed suit in a Connecticut federal court seeking a declaration that it has no duty to defend and indemnify its insured in an underlying lawsuit alleging that she and an associate provided fraudulent wire instructions and absconded with $1.4 million in closing funds with respect to the purchase of a Lavallette, N.J., property.
July 02, 2024
English Justice Rules For Reinsurers In $41M Row Over Taliban Seizure

LONDON — Agreeing with reinsurers on interpretation of a disputed exclusionary clause, an English justice granted them summary judgment in a dispute over liability for coverage of a warehouse the Taliban seized in Afghanistan in August 2021.
July 01, 2024
Texas High Court Refuses To Review No Coverage Ruling In $16M Fraudulent Invoice Suit

AUSTIN, Texas — The Texas Supreme Court denied an insured’s petition seeking review of a Texas appeals court’s opinion that affirmed a lower court’s summary judgment ruling in favor of primary and excess commercial crime insurers in a coverage dispute arising from $16,423,941.78 in fraudulent invoices, refusing to disturb the appeals court’s finding that coverage was not triggered because the insured’s underlying loss was the result of a dishonest act by the insured’s authorized representative.
June 28, 2024
Pennsylvania Panel Affirms Judgment In Coverage Dispute Arising From Slip And Fall

PHILADELPHIA — A Pennsylvania appellate panel on June 27 affirmed a lower court’s ruling that denied an insurance broker’s motion for judgment notwithstanding the verdict in a coverage dispute arising from an injury from a slip and fall, finding that the record supports a finding that the broker was negligent in its representation of the certificate of insurance.
June 28, 2024
Majority Affirms Dismissal Of Suit Seeking $192M In Losses Arising From Coronavirus

NEW ORLEANS — A majority of a Fifth Circuit U.S. Court of Appeals panel on June 27 affirmed a lower federal court’s ruling in favor of a commercial property insurer in Texas’ largest nonprofit health system’s lawsuit seeking coverage for its $192 million in business interruption losses arising from the coronavirus, but the dissenting judge found that the case is distinct because the insured pleaded tangible alterations to its property.
June 27, 2024
Panel: Personal Liability Excess Insurer Has No Duty To Defend Defamation Suit

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a lower court’s ruling that a personal liability umbrella insurer had no duty to provide defense costs for an underlying defamation lawsuit brought against board members of the College of DuPage, finding that an educator’s legal liability insurance policy covered the underlying loss.