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

Mealey's Emerging Insurance Disputes

January 03, 2025
7th Circuit Dismisses Insurer’s Appeal As Moot In Wrongful Death Coverage Suit

CHICAGO — The Seventh Circuit U.S. Court of Appeals on Jan. 2 dismissed as moot an insurer’s appeal in a dispute over coverage for an underlying wrongful death and negligence lawsuit arising from the death of an elderly assisted-living facility resident, finding that the dispute over the lower court’s stay order evaporated with the dismissal of the underlying action.
January 03, 2025
Lawsuit Filed By 3 Professional Models Against Insurer To Proceed, Judge Says

BRUNSWICK, Ga. — A lawsuit filed by three professional models against the insurer of a club that used the models’ images without consent will proceed against the insurer because the models’ underlying lawsuit against the insured alleged sufficient facts in support of a claim that the misappropriation of the images was negligent, a Georgia federal judge said in finding that the insurer’s knowing violation exclusion does not clearly bar coverage.
December 31, 2024
IRS Asks 5th Circuit To Affirm Tax Court Ruling In Row Over Purported Microcaptives

NEW ORLEANS — Urging the Fifth Circuit U.S. Circuit Court of Appeals to affirm a ruling that certain purported microcaptive insurance arrangements were not entitled to federal tax benefits, the U.S. commissioner of Internal Revenue argues in part that the “Taxpayer can hardly claim reversible error or fault the Tax Court for applying a legal framework that Taxpayer himself advocated.”
December 24, 2024
Tax Court Briefing On Economic Substance Doctrine Continues In Microcaptive Case

WASHINGTON, D.C. — In their latest filings in a U.S. Tax Court dispute over the “economic substance doctrine” in consolidated cases involving purported microcaptive insurance companies, the commissioner of Internal Revenue argues that a “threshold” determination of relevance is not required and the petitioners contend that the bulk of the amicus curiae briefs support their contrary position, among other things.
December 20, 2024
3rd Circuit Reverses, Deems Joint Underwriting Association A Public Entity

PHILADELPHIA — The Third Circuit U.S. Court of Appeals reversed in part and affirmed in part a district court’s ruling that issued an injunction preventing enforcement of certain legislative changes to 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, finding that the JUA is a public entity rather than a private one due to the state’s “legally protectable interest in the JUA.”
December 18, 2024
Tax Court Ruling In Row Over Purported Microcaptive Is Appealed To 10th Circuit

DENVER — For at least the second time this year, plaintiffs who unsuccessfully sued the commissioner of Internal Revenue in U.S. Tax Court over purported microcaptive insurance have filed an appeal; this one is in the 10th Circuit U.S. Court of Appeals.
December 16, 2024
N.C. Supreme Court: Retailer’s COVID-19 Loss Excluded By Policy As Contamination

RALEIGH, N.C. — Ruling that a contamination exclusion in a clothing retailer insured’s “all-risk” commercial insurance policy excluded the insured’s claimed losses arising from the COVID-19 pandemic, the North Carolina Supreme Court on Dec. 13 — while disagreeing with its reasoning — affirmed the judgment of a state appellate court, which in turn affirmed a trial court’s dismissal of the insured’s lawsuit seeking coverage under the policy for its losses.
December 16, 2024
N.C. High Court Rules COVID-19 Lockdowns Caused Restaurants’ Direct Physical Loss

RALEIGH, N.C. — The North Carolina Supreme Court on Dec. 13 reversed the judgment of a state appellate court that had reversed a trial court’s grant of partial summary judgment in favor of restaurant insureds in a COVID-19 coverage dispute, concluding that the restaurants’ insurance policies did not “unambiguously bar coverage when government orders and threatened viral contamination deprived the policyholder restaurants of their ability to physically use and physically operate property at their insured business premises.”
December 13, 2024
Hawaii Supreme Court Considers Subrogation Issues For Wildfire Settlement

HONOLULU — How the subrogation rights of property and casualty insurance carriers bear on a proposed global settlement of claims related to the August 2023 Maui wildfires is the focus of three reserved questions the Hawaii Supreme Court is considering, with some recent filings involving how reinsurance could be affected.
December 13, 2024
3rd Circuit Affirms Dismissal Of Coverage Dispute Arising From Construction Accident

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of a commercial general liability insurer’s motion to dismiss a coverage lawsuit arising from a construction accident, agreeing with the lower court that the insurer had no duty to defend a building owner because it was not an “additional insured” under the CGL policy’s additional insured endorsement.
December 11, 2024
COMMENTARY: Insurance In The Limelight: Unique Insurance Coverage Considerations For Media Platforms Airing Documentaries And Related Original Content

By Meredith Elkins, Shafkat Rakib and Justin Javier
December 13, 2024
Justice: Subcontractor’s Insurer Has No Duty To Defend Against Personal Injury Suit

NEW YORK — A New York justice held that a subcontractor’s insurer has no duty to defend a general contractor against an underlying personal injury lawsuit that occurred at a construction site, finding that the underlying lawsuit does not allege facts implicating the subcontractor at all.
December 12, 2024
Real Estate Law Firm, Cyber Security Insurer Settle Coverage Dispute

ASHEVILLE, N.C. — A real estate law firm, its insurer and a third-party administrator filed a joint stipulation asking a North Carolina federal court to dismiss with prejudice the firm’s lawsuit seeking coverage under a cybersecurity policy for gross negligence and obstruction of justice cross-claims arising from a “cyber incident” in 2021 that resulted in the misdirection of funds.
December 12, 2024
Judge: Assignee Lacks Standing To Recover Emotional Distress Damages From Insurer

CHICAGO — A California federal judge held that an assignee cannot establish standing under California Insurance Code Section 11580(b)(2) to recover her emotional distress damages from an insurer as judgment creditor of her former employer, granting the insurer’s motion to dismiss her lawsuit arising from an underlying discrimination judgment in her favor but allowing the assignee leave to amend one of her claims.
December 12, 2024
Stipulation Of Dismissal Filed In D&O Insurance Coverage Dispute With Receiver

OKLAHOMA CITY — A receiver for an insurer in liquidation filed in an Oklahoma federal court a stipulation of dismissal in his declaratory judgment suit against a D&O insurer that insured the parent company of the insurer in liquidation.
December 11, 2024
2nd Circuit Sets Argument In Reinsurers’ Post-Trial Appeal Of Oil Seizure Row

NEW YORK — Oral argument has been calendared for Jan. 24 in a Second Circuit U.S. Court of Appeals case filed by reinsurers that were ordered to pay CITGO Petroleum Corp. more than $72.5 million in a suit stemming from the February 2020 seizure of crude oil at a Venezuelan port and involving a marine cargo reinsurance policy and what constitutes an “insurrection.”
December 11, 2024
No Coverage Owed For Regal Cinemas’ Coronavirus Losses, 9th Circuit Affirms

PASADENA, Calif.— The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of insurers in Regal Cinemas’ breach of contract lawsuit seeking recovery for its revenue losses arising from the coronavirus pandemic, finding that, pursuant to New York law, Regal Cinemas was not insured for its alleged business losses.
December 10, 2024
Panel: Reservation Court Has Jurisdiction In Tribe’s Coronavirus Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals held that a tribal court has subject matter jurisdiction over an insurance company in a dispute over the tribe’s claims for business interruption losses at its casino caused by the coronavirus pandemic, affirming a lower federal court on the alterative ground that the insurance policy at issue satisfies Montana’s consensual-relationship exception.
December 10, 2024
No D&O Coverage Owed For Fraudulent Billing Suit, Illinois Panel Affirms

CHICAGO — An Illinois appeals panel determined Dec. 9 that a directors and officers liability insurer has no duty to defend or indemnify its insureds against an underlying fraudulent billing lawsuit because coverage is barred by the policy’s interrelated wrongful acts exclusion, affirming a lower court’s judgment in favor of the insurer.
December 10, 2024
Coverage Owed For Lead, Cadmium Exposure Suit, 3rd Circuit Affirms

PHILADELPHIA — An employers liability insurer has a duty to defend its employer against an underlying suit filed by a former employee and arising out of the former employee’s exposure to lead and cadmium fumes because a potential for coverage exists under the policy as it is not clear that the policy’s intentional injury exclusion bars coverage, the Third Circuit U.S. Court of Appeals said in affirming a district court’s ruling.
December 10, 2024
Insured, 2nd CGL Insurer Seek Dismissal Of Coverage Suit Over BIPA Violation Claim

CHICAGO — An insured and the remaining commercial general liability insurer in its lawsuit seeking a declaration as to coverage for an underlying putative class lawsuit alleging that it violated the Illinois Biometric Privacy Act (BIPA) filed a stipulation asking an Illinois federal court to dismiss with prejudice all claims between them.
December 10, 2024
Retail Furniture Insured Voluntarily Dismisses Coronavirus Coverage Suit

PHILADELPHIA — A retail furniture insured filed a notice in a federal court in Pennsylvania to voluntarily dismiss its lawsuit seeking coverage for its losses stemming from the forced closure of its business in response to the coronavirus pandemic.
December 09, 2024
California Panel: Abuse Or Molestation Exclusion Bars Coverage For Spa Owner

LOS ANGELES — A California appeals panel held that a commercial insurance policy’s “abuse or molestation” exclusion bars coverage for an underlying lawsuit alleging that a spa owner insured sexually assaulted and molested three of its customers during massage sessions, affirming a lower court’s summary judgment ruling in favor of the insurer in the insured’s breach of contract lawsuit.
December 09, 2024
Panel Affirms No Coverage Ruling In Convention Center’s Suit Arising From Pandemic

SEATTLE — The Ninth Circuit U.S. Court of Appeals affirmed a federal court’s ruling that granted an insurer’s motion to dismiss an insured’s lawsuit seeking coverage for its business interruption losses arising from the COVID-19 pandemic, finding that the insured fails to show that coverage exists for its losses under the policy’s Civil or Military Authority provision and further concluding that the policy's contamination exclusion precludes coverage.
December 06, 2024
10th Circuit Issues Reversal Of Judgment For Liability Insurer In Coverage Row

DENVER — The 10th Circuit U.S. Court of Appeals reversed and remanded a district court’s judgment for a liability insurer in a dispute between it and a health insurer regarding coverage to the health insurer in an underlying multidistrict litigation antitrust dispute involving an excess errors and omissions (E&O) policy issued by a now-insolvent insurer.