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

Mealey's Emerging Insurance Disputes

March 25, 2024
Judge Grants Summary Judgment On Driver’s UCL Claim For ‘Unfair’ COVID Premiums

SAN FRANCISCO — A California federal judge granted GEICO’s motion for summary judgment on an insured’s claim against it for violating California’s unfair competition law (UCL) by unfairly profiting from a premium giveback program initiated during the COVID-19 pandemic, in part citing evidence that state insurance regulators deemed GEICO’s givebacks sufficient.
March 21, 2024
Panel Reverses ‘Rare’ Case Where Diner Has Alleged Direct Physical Loss, Damage

SAN DIEGO — A California appeals panel held that a diner insured’s lawsuit seeking coverage for its business losses arising from the COVID-19 pandemic is “one of those rare cases” where the insured has adequately asserted a direct physical loss or damage under its commercial property insurance policy “at least raising the specter of coverage,” reversing a lower court’s judgment in favor of the insurer and remanding.
March 21, 2024
California Panel Affirms Ruling In Coverage Suit Over Postponed Metallica Shows

LOS ANGELES — A California appeals court affirmed a lower court’s summary judgment ruling in favor of an insurer in the insured’s breach of contract and bad faith lawsuit seeking coverage under a “Cancellation, Abandonment and Non-Appearance Insurance” policy for the postponement of the last six shows of Metallica’s South American tour in 2020, finding that the policy’s “communicable disease” exclusion is not ambiguous and that its ordinary meaning includes the pathogen that underlies the disease.
March 20, 2024
8th Circuit Refuses To Rehear Coverage Suit Over Tax Revenue Losses Due To Closures

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals denied a Missouri city’s request to reconsider its ruling that a commercial property insurer owes no coverage for the city’s tax revenue losses due to governmental closure orders in response to the coronavirus pandemic, refusing to address the city’s argument that the “inartful” policy is not clear and unambiguous.
March 20, 2024
5th Circuit Reverses, Remands Coverage Suit Arising From Worker’s Salt Mine Death

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals held that a lower federal court legally erred in finding that the Louisiana Oilfield Anti-Indemnity Act contains a universal “well” requirement, reversing a coverage dispute arising from a worker’s death at a salt mine and remanding for the lower court to determine, in the first instance, whether fire-suppression and electrical-work contracts between the salt mine owner and its contractors “pertain[] to . . . drilling for minerals.”
March 20, 2024
Oral Arguments Held In NRA’s Free Speech Suit Arising From Insurance Program

WASHINGTON, D.C. — The U.S. Supreme Court heard oral arguments on the National Rifle Association of America (NRA)’s petition seeking review of the Second Circuit U.S. Court of Appeals’ finding that it failed to plausibly assert that the former superintendent of the New York State Department of Financial Services (DFS) unconstitutionally threatened or coerced an insurer or other entities to stifle its speech, addressing the NRA’s contention that it plausibly pleaded a First Amendment claim because the superintendent “chose coercion over persuasion.”
March 19, 2024
California Panel Affirms Rulings In Favor Of Excess D&O Insurer

LOS ANGELES — A California appeals panel affirmed a lower court’s rulings in favor of an excess directors and officers (D&O) liability insurer in its lawsuit disputing coverage for its investment management firm insured, rejecting the appellant’s argument that the lower court erred in interpreting a primary D&O policy provision as an indemnification contract.
March 19, 2024
Insurers Challenge Ruling That Tribal Court Has Jurisdiction Over Coronavirus Suit

SEATTLE — Insurers asked the Ninth Circuit U.S. Court of Appeals to reconsider its Feb. 29 opinion that affirmed a lower federal court’s finding that a tribal court has subject matter jurisdiction over a coronavirus coverage suit involving tribal properties on tribal land that the Suquamish Tribe brought against “nonmember, off-reservation” insurers that participate in a program that is tailored to and offered exclusively to tribes, arguing that the panel’s “unprecedented expansion of tribal-court jurisdiction warrants rehearing.”
March 19, 2024
Pollution Exclusion Clearly Bars Coverage For Wastewater Discharge, Panel Says

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 18 affirmed a district court’s ruling that a pollution exclusion in a directors and officers liability policy bars coverage for underlying lawsuits alleging that the insureds illegally discharged wastewater into city sewage treatment facilities because the exclusion is not ambiguous and clearly bars coverage for the wastewater.
March 19, 2024
7th Circuit: Auto Exclusion Bars Coverage For Negligence Suit Arising From Accident

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurer, finding that the auto exclusion in the insured’s errors and omissions and commercial general liability insurance policies barred coverage for an underlying negligence lawsuit arising from an accident and that the operation exception to the exclusion in the CGL policy does not apply.
March 18, 2024
4th Circuit Stands By Ruling That Insurer Can Rescind Professional Liability Policy

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on March 15 refused to reconsider its affirmation of a lower federal court’s summary judgment ruling in favor of a professional liability insurer in its lawsuit seeking a declaratory judgment that it can rescind an insurance policy issued to a clinic, standing by its finding that there is no genuine dispute of material fact that the clinic’s founder made a material misstatement in her applications for coverage.
March 18, 2024
Specific-Entity Exclusion Bars Coverage For SEC Suit, 6th Circuit Affirms

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on March 15 held that an insurance policy’s specific-entity exclusion unambiguously bars coverage for an underlying investigation and enforcement action brough against the insured by the U.S. Securities and Exchange Commission, rejecting the insured’s argument that the policy is ambiguous.
March 18, 2024
Panel Refuses To Disturb No Coverage Ruling In Suit Arising From Opioid Epidemic

SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals unanimously voted to deny a prescription drug distributor insured’s petition seeking rehearing of the panel’s Jan. 26 ruling that there is no coverage owed for lawsuits prompted by the opioid epidemic because the underlying claims “describe exclusively deliberate conduct.”
March 18, 2024
GM, OnStar, Lexis Sued For Collecting, Sharing Drivers’ Data

WEST PALM BEACH, Fla. — A Florida man, who claims that his driving data was collected and shared without his knowledge or consent brings putative class claims under the Fair Credit Reporting Act (FCRA), as well as Florida consumer and privacy law, asserting that the inaccurate information negatively impacted his ability to obtain car insurance.
March 13, 2024
BSA Claimant Not Bound By Insurance Equity Injunction, Bankruptcy Judge Rules

WILMINGTON, Del. — A Delaware federal bankruptcy judge concluded that a claimant can continue to seek recovery from insurers for an underlying judgment that he obtained against his abuser in his lawsuit against the abuser, the Boys Scouts of America and Heart of America Council (HOAC), finding that the claimant is not bound by the Insurance Equity Injunction in the Boy Scouts of America’s third modified, fifth amended Chapter 11 reorganization plan that contemplates the creation of a settlement trust to “assume liability for all Abuse Claims.”
March 13, 2024
Former CEO Of Modell’s Appeals Dismissal Of D&O Coverage Dispute

NEW YORK —The former chief executive officer of the now bankrupt Modell’s Sporting Goods Inc. filed a notice in a New York federal court indicating that he is asking the Second Circuit U.S. Court of Appeals to review the court’s Feb. 8 ruling that granted a directors and officers liability insurer’s motion to dismiss his breach of contract and declaratory judgment lawsuit, challenging the lower court’s finding that the policy does not give him the right to block coverage for the company’s former chief financial officer’s $2.8 million settlement of an underlying adversary proceeding filed by the liquidating trustee.
March 13, 2024
Judge Strikes Expert Testimony, Denies Class Certification In Suit Against GEICO

CHICAGO — An Illinois federal judge on March 12 granted insurers’ motion to strike the insureds’ expert testimony and denied the insureds’ motion for certification of two classes in their lawsuit alleging that the insurers violated the Illinois Consumer Fraud and Deceptive Business Practices Act by charging “excessive” premiums during the COVID-19 pandemic that failed to account for a dramatic reduction in driving, finding that the insureds failed to establish predominance to warrant class certification.
March 12, 2024
9th Circuit Partly Reverses Ruling In $40M Commercial Crime Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 11 reversed a lower federal court’s dismissal of a financial services company insured’s claim for loss under its commercial crime insurance policy’s “Computer And Funds Transfer Fraud Insuring Agreement” and its claim for tortious breach of the implied covenant of good faith and fair dealing, finding that the authorized submission of fraudulent electronic data into the insured’s computer system can arguably be described as “fraudulent entry” to trigger coverage.
March 12, 2024
Infectious Disease Exclusion Bars Coverage For Underlying E. Coli Suit, Judge Says

ROME, Ga. — No coverage is owed to an insured for an underlying suit seeking damages for E. coli infections contracted at the insured’s fair because the commercial general liability insurer’s infectious disease exclusion clearly bars coverage, a Georgia federal judge said in granting the insurer’s motion for judgment on the pleadings.
March 12, 2024
Insurers Tell N.C. High Court To Apply 27-Year-Old Precedent To Coronavirus Dispute

RALEIGH, N.C. — Insurers argued to the North Carolina Supreme Court that it should affirm an appeals court’s reversal of a lower court’s grant of partial summary judgment in favor of restaurant insureds in a COVID-19 coverage dispute, responding to the insured’s appellant argument that the phrase “physical loss or physical damage” includes loss of the physical use of property under the state’s “long-standing principles of insurance contract interpretation.”
March 12, 2024
Judge Administratively Closes Suit Against Insurance Agent After Settlement Announced

HARTFORD, Conn. — The same day parties announced that they reached a settlement “subject to the parties’ negotiation and execution of a mutually acceptable settlement agreement,” a federal judge in Connecticut administratively closed the insurer’s lawsuit alleging that an insurance agent’s failure to include exclusions in an insurance policy resulted in it paying more than $1 million in legal fees and expenses to settle an underlying worker injury lawsuit.
March 11, 2024
English Justice Addresses Broker Disclosure In Light Of Sanctions On Russia

LONDON — A reinsurance placing broker would not contravene a set of United Kingdom sanctions against Russia by providing certain documents requested under an application for third-party disclosure in a case involving insurance and reinsurance for aircraft and engines leased to Russian entities, an English justice concluded.
March 11, 2024
Majority: Court Erred In Denying Insurer’s Motion To Dismiss COVID-19 Coverage Suit

RICHMOND, Va. — A majority of the Fourth Circuit U.S. Court of Appeals on March 8 held that a lower federal court erred when it denied an insurer’s motion to dismiss an insured’s coverage lawsuit arising from the coronavirus pandemic, reversing both the lower court’s order denying the insurer’s motion to dismiss and its class certification order and remanding with instructions to dismiss the lawsuit.
March 08, 2024
Judge Rules For CGL Insurer In Coverage Dispute With Medical Product Manufacturer

CONCORD, N.H. — A federal judge in New Hampshire granted a commercial general liability insurer’s motion for summary judgment in its declaratory judgment lawsuit pertaining to 10 underlying class actions alleging that its insured manufactured and marketed medical devices used to clean positive airway pressure (CPAP) and bi-level positive airway pressure (biPAP) devices that were not safe or effective, finding that the damages alleged in the class actions fail to constitute “damages because of ‘bodily injury’ or ‘property damage’” to trigger coverage.
March 08, 2024
Bump-Up Exclusion Bars D&O Coverage For $90M Settlement, Judge Rules On Remand

ALEXANDRIA, Va. — On remand from the Fourth Circuit U.S. Court of Appeals, a federal judge in Virginia held that a “bump-up” exclusion unambiguously precludes directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger.