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

Mealey's Emerging Insurance Disputes

January 15, 2025
Set-Off Provision In Insured’s $1M Settlement Does Not Offset Judgment, Panel Affirms

CHICAGO — The Seventh Circuit U.S. Court of Appeals on Jan. 14 affirmed a lower federal court’s ruling in favor of hospital in a professional liability insurer’s lawsuit seeking a declaratory judgment that an underlying $1 million settlement between the hospital and its software consulting company insured offsets a $750,000 judgment that was entered against its insured in the underlying lawsuit, finding that the underlying judgment creates a new liability for which the hospital can seek additional recovery.
January 15, 2025
Connecticut Judge Stays Suit Seeking Coverage For $13.4M Wrongful Death Judgment

NEW HAVEN, Conn. — A Connecticut judge denied an insurer’s motion to dismiss a breach of contract lawsuit seeking coverage for an underlying $13,364,383 wrongful death judgment awarded against its insured but granted the insurer’s alternative motion to stay the coverage suit pending the insured’s appeal of the underlying jury verdict.
January 15, 2025
Final Approval Given To $2 Million Insurance-Funded Settlement Of Data Breach Suit

PORTLAND, Ore. — Five months after preliminarily approving a $2 million settlement of a class action over a marketing execution firm’s 2022 data breach, an Oregon federal judge granted final approval, deeming the approval “fair, reasonable, and adequate” and in accord with the requirements of Federal Rule of Civil Procedure 23.
January 14, 2025
Exclusion Bars Coverage For Home Depot’s Data Breach Loss, 6th Circuit Majority Affirms

CINCINNATI — A majority of the Sixth Circuit U.S. Court of Appeals on Jan. 13 affirmed an Ohio federal court’s finding that a commercial general liability insurance policy’s electronic data exclusion bars coverage for Home Depot’s losses stemming from a 2014 data breach, rejecting Home Depot’s contention that the lower court “wrongly expanded the narrow electronic-data exclusion beyond its natural meaning, based on assumed facts outside the record.”
January 13, 2025
Judge Tosses D&O Insurer’s Suit Disputing Coverage For Fraudulent Inducement Claim

CHICAGO — Three days after an insurer filed a notice seeking dismissal without prejudice of its lawsuit disputing coverage for underlying allegations that a seller and its venture capital sponsor defrauded buyers into purchasing the company SwervePay LLC, a federal judge in Illinois on Jan. 13 dismissed the action.
January 13, 2025
Judge Amends Summary Judgment Order Over Insurer’s Liability Under Lost Policy

SANTA ANA, Calif. — A California federal judge amended his previous order denying an insurer’s motion for summary judgment on a suit brought against it for breach of contract and violation of California’s unfair competition law (UCL) by the successor-in-interest to a school that is being sued for a 1976 sexual assault of a student by a teacher, writing that the order conflated which policy was lost and which one the insurer conceded issuing.
January 13, 2025
Assignee’s Suit Against Insurance Agency Time-Barred, Pennsylvania Court Affirms

PHILADELPHIA — A Pennsylvania court on Jan. 10 affirmed a lower court’s grant of an insurance agency’s motion for judgment on the pleadings in the insured’s assignee’s breach of contract lawsuit seeking coverage for an underlying wrongful death settlement, finding that the suit is barred by the statute of limitations.
January 13, 2025
Bid For Review Of 9th Circuit Crop Insurance Ruling Under Loper Bright Fails

WASHINGTON, D.C. — In its Jan. 13 order list, the U.S. Supreme Court denied a certiorari petition in which a farm argued that Loper Bright Enterprises v. Raimondo should have prevented the Ninth Circuit U.S. Court of Appeals from deferring to a regulatory interpretation of the Federal Crop Insurance Corp. (FCIC) in a crop insurance case.
January 10, 2025
Hospital, Insurer Announce Settlement Of Coronavirus Coverage Suit In Federal Court

BOSTON — A hospital insured and its commercial property insurer tell a Massachusetts federal court in a Jan. 9 joint motion that they have reached a settlement in principle of the insured’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic.
January 09, 2025
Judgment Issued For Oil Company In Dispute Over Hurricane-Damaged Oil Barge

HOUSTON — A Texas federal judge on Jan. 8 granted in part summary judgment to a gas and oil exploration company in its breach of contract suit against its insurer for failure to cover costs for recovering an oil barge damaged and set adrift during Hurricane Ida, finding that because there is no dispute that removal of the barge was required under law, the protection and indemnity (P&I) policy applies.
January 09, 2025
N.Y. Appeals Court Affirms Arbitration Award In Coronavirus Coverage Dispute

NEW YORK — A New York appeals court affirmed a lower court’s ruling that denied an insurer’s request to disqualify a former New York Supreme Court justice as an umpire in an arbitration of a COVID-19 coverage dispute and concluded that the lower court properly determined the insured failed to demonstrate that the arbitration award should be vacated.
January 09, 2025
N.Y. Appeals Court Reinstates Complaint Against 1 Insurer In COVID-19 Coverage Suit

NEW YORK — A New York appeals court concluded that Bowlero Corp. has stated a cause of action against one of its insurers because its complaint sufficiently asserts that a policy’s special time element coverage extension was triggered by the COVID-19 pandemic and the additional pathogenic materials policy exclusion does not apply, unanimously modifying the lower court’s ruling, reinstating the insured’s complaint against the one insurer and affirming the remainder of the lower court’s decision.
January 08, 2025
Judge Refuses To Reconsider Dismissal Of Philadelphia Eagles’ Coverage Dispute

PHILADELPHIA — A Pennsylvania federal judge denied the owner and operator of the Philadelphia Eagles football organization’s motion to reconsider the dismissal of its action seeking a declaration as to coverage for its losses arising from the COVID-19 pandemic, rejecting the insured’s contention that the present lawsuit “is unlike any other that already has been decided and warrants proceeding past a motion to dismiss.”
January 08, 2025
Biopharmaceutical Company, Insurer Stipulate To Dismiss D&O Coverage Dispute

LOS ANGELES — After announcing that a settlement has been reached in principle, a biopharmaceutical company insured and its insurer filed a joint stipulation to dismiss a directors and officers liability coverage dispute arising from a lawsuit brought by the insured’s former employee.
January 07, 2025
5th Circuit Reverses, Remands Judgment In Favor Of Professional Liability Insurer

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals held on Jan. 6 that a lower federal court abused its discretion when it denied an insured the opportunity to amend its original complaint against its professional liability insurer, reversing the lower court’s judgment in favor of the insurer and remanding for further proceedings.
January 07, 2025
Delaware Judge Rules On Summary Judgment Motions In D&O Coverage Dispute

WILMINGTON, Del. — A Delaware judge held that an underlying securities class action falls under a 2018-2019 directors and officers liability insurance policy period but that an underlying consumer class action falls outside both the 2017-2018 and 2018-2019 policy periods and is not interrelated with any covered claims, ruling on various motions for summary judgment brought by a health technology business and its primary and excess insurers.
January 07, 2025
Federal Judge Tosses Suit Alleging Insurer Fraudulently Down-Coded Medical Devices

MINNEAPOLIS — The same day a manufacturer and seller of an electrotherapy medical device and its insurer filed a stipulation of dismissal, a federal judge in Minnesota dismissed with prejudice the insured’s breach of contract and deceptive trade practices lawsuit alleging that 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.
January 06, 2025
11th Circuit Denies Insured’s Petition For Rehearing In D&O Coverage Dispute

ATLANTA — An 11th Circuit U.S. Court of Appeals panel denied an insured’s petition to reconsider its finding that an insurer has no duty to provide directors and officers liability coverage for investors' rescission demands against the insured because the claims were first made before the policy’s inception, standing by its ruling that agreed with a lower court’s judgment in favor of the insurer but vacated and remanded for the lower court to amend the judgment so it is based on a theory of exclusion and not recission.
January 06, 2025
Idaho High Court Reinstates Negligence, Respondeat Superior Claims Against Insurer

BOISE, Idaho— The Idaho Supreme Court reversed a lower court’s dismissal of an insured’s negligence/respondeat superior claims against its insurer in its lawsuit alleging the insurer was vicariously liable for an insurance agent’s negligence in failing to provide information on the availability of landslide coverage and failing to renew coverage for a home construction project, remanding for further proceedings.
January 06, 2025
Freddie Mac, Insurer Reach Settlement In Directors And Officers Coverage Dispute

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and Certain Underwriters at Lloyd’s of London filed a notice in a District of Columbia federal court indicating that they have settled 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.
January 06, 2025
Judge: No Coverage Owed For Insured’s Alleged $1M Loss Arising From Data Theft

HOUSTON — A federal judge in Texas granted a businessowners insurer’s motion for summary judgment in its website and marketing company insured’s lawsuit seeking coverage for its nearly $1 million in lost revenue due to theft of its intellectual property by employees, finding that no coverage is owed because the insured did not sustain direct physical damage to its covered property.
January 06, 2025
Judgment Granted For Insurers In Dispute Over MDL Opioid Liability Coverage

NEW CASTLE, Del. — A Delaware state court judge granted summary judgment for insurers in their declaratory judgment action seeking a judgment that they have no duty to indemnify or defend insured AmerisourceBergen, a distributor of prescription opioids, in multidistrict litigation, finding that because the suits seeking to recover economic losses do not seek damages related to bodily injury, the insurers have no duty to defend or indemnify under the policies.
January 06, 2025
Judge: Bump-Up Exclusion Does Not Bar D&O Coverage For Securities Class Action

WILMINGTON, Del. — A Delaware judge on Jan. 3 ruled in favor of an insured in its breach of contract and declaratory judgment lawsuit seeking directors and officers coverage for an underlying securities class action, rejecting the insurers’ argument that the policy’s bump-up exclusion barred coverage.
January 06, 2025
Some Defendants Reach Undisclosed Settlement In Jet Coverage Lawsuit

SAN FRANCISCO — A few defendants have been dismissed with prejudice from an international aviation insurance coverage dispute involving Russia’s invasion of Ukraine pursuant to a confidential settlement approved by a California state court judge.
January 03, 2025
Intentional Loss, Abuse Exclusions Bar Coverage, Maine High Court Affirms

PORTLAND, Maine — The Maine Supreme Judicial Court affirmed a lower court’s finding that a homeowners insurer has no duty to indemnify its insured’s assignee for the balance of a $300,000 consent judgment arising from underlying claims that the insured’s minor nephew physically, sexually and emotionally abused another minor in the insured’s care, determining that the policy’s “intentional loss” and “abuse” exclusions bar coverage.