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

Mealey's Emerging Insurance Disputes

August 02, 2024
No E&O Coverage Exists For Trade Secret Judgment, 11th Circuit Affirms

ATLANTA — The 11th Circuit U.S. Court of Appeals on Aug. 1 held that no coverage exists under a “Sponsored Insurance Agents Errors and Omissions Liability” insurance policy for a $552,677.61 judgment for misappropriation of trade secrets, affirming a lower federal court summary judgment in favor of the insurer in a writ of garnishment action seeking to collecting the judgment.
August 01, 2024
Judge: Drug Distributor Failed To Establish Potential Coverage For Opioid Suits

SAN FRANCISCO — A federal judge in California held that a prescription drug distributor insured failed to establish that five insurance policies spanning 1999-2004 have any potential to cover underlying opioid lawsuits because the lawsuits fail to allege an accident that caused the purported bodily injury, denying the insured’s motion for partial summary judgment.
August 01, 2024
Magistrate Grants Continuance For Status Conference In D&O Insurers’ Coverage Row

INDIANAPOLIS — Finding “good cause,” an Indiana federal magistrate judge granted defendant insurers’ motion for a continuance of a status conference in a suit filed against them by an insurer now in rehabilitation, seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
July 31, 2024
9th Circuit Reverses Judgment In Insurance Row Over Application Misrepresentation

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals reversed and remanded a district court’s grant of summary judgment to insurers in their insureds’ suit seeking coverage for expenses in defending another suit regarding fraud-based claims, finding that the district court erred in applying Nevada law, rather than Texas law, and that pursuant to Texas law, reversal is required because material facts remain in dispute regarding alleged material misrepresentations in the insureds’ application for policy renewal.
July 26, 2024
COMMENTARY: Cyber War Exclusions

By Peter A. Halprin and Brittany Parks
July 31, 2024
Panel Affirms Ruling In Favor Of Insureds In Coverage Suit Over Worker Injury

NEW YORK — The Second Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of a building owner and general contractor in their lawsuit seeking a declaration that a subcontractor’s general liability insurer has a duty to defend them against an underlying lawsuit arising from a worker injury, rejecting the insurer’s assertion that it was not required to provide timely notice to the insureds of its denial of coverage because their insurer was the real party in interest.
July 31, 2024
Wyoming High Court Accepts Certified Question In Negligence Suit Against Engineer

CHEYENNE, Wyo. —The Wyoming Supreme Court has agreed to answer a certified question from the 10th Circuit U.S. Court of Appeals in a subrogated homeowners insurer’s appeal of a Wyoming federal court’s ruling that its claim against an engineering firm that designed a home’s plumbing is time-barred by the two-year statute of limitations for professional negligence claims.
July 31, 2024
Plaintiffs Seek Reargument In Coverage Dispute Over Earplug Liability Claims

WILMINGTON, Del. — Plaintiffs seeks reargument of a Delaware judge’s ruling in favor of liability insurers in their lawsuit seeking coverage for an underlying earplug product liability multidistrict litigation that resulted in a $6 billion settlement and millions of dollars of defense costs, challenging the judge’s finding that they have failed to demonstrate that there is no genuine issue of material fact regarding their satisfaction of the self-insured retention under any of the insurance policies.
July 31, 2024
Insurer Has Duty To Indemnify Construction Company, 2nd Circuit Affirms

NEW YORK — The Second Circuit U.S. Court of Appeals determined that an insurer has a duty to indemnify its construction company insured against underlying personal injury and property damage lawsuits, affirming a lower federal court’s summary judgment ruling against the insurer.
July 31, 2024
Judge Denies Insurers’ Motion For Judgment On The Pleadings To Conserve Resources

MIAMI — A federal judge in Florida denied insurers’ motion for judgment on the pleadings to conserve judicial resources in a 7-Eleven store’s declaratory judgment lawsuit seeking general liability and liquor liability coverage for a customer’s underlying bodily injury action alleging that a 7-Eleven employee physically struck him numerous times, finding that it is appropriate to decide only their motion for summary judgment.
July 30, 2024
Health System Seeks Rehearing Of Dismissal Of $192M Coronavirus Coverage Dispute

NEW ORLEANS — Texas’ largest nonprofit health system filed a petition seeking rehearing en banc of the Fifth Circuit U.S. Court of Appeals’ majority opinion that affirmed a lower federal court’s ruling in favor of its commercial property insurer in its lawsuit seeking coverage for $192 million in business interruption losses arising from the coronavirus.
July 30, 2024
Insured Appeals Take-Nothing Judgment In Coverage Dispute Over Wrongful Termination

WEST PALM BEACH, Fla. — An insured filed a notice in a Florida federal court indicating that he is asking the 11th Circuit U.S. Court of Appeals to review a take-nothing judgment in favor of a primary insurer in his 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 29, 2024
2nd Circuit Reverses Court’s Dismissal Of New York’s Suit Against CGL Insurer

NEW YORK — The Second Circuit U.S. Court of Appeals reversed a lower federal court’s dismissal of the city of New York’s lawsuit seeking commercial general liability coverage for an underlying negligence lawsuit brought by Consolidated Edison Corporation of New York, finding that the insurer failed to provide an adequate explanation for the change in its litigation position and for its “markedly inconsistent factual statements” as to the location of its business.
July 29, 2024
Broker’s Application For Reargument Is ‘Theatrical Rhetoric,’ Insured Argues

PHILADELPHIA — An insured answered an insurance broker’s application seeking reargument after a Pennsylvania appellate panel affirmed a lower court’s ruling that denied the broker’s motion for judgment notwithstanding the verdict in a coverage dispute arising from an injury from a slip and fall, asserting that the broker’s application for reargument “ignores the standard of review” governing the broker’s appeal and the appellate panel’s decision.
July 29, 2024
Judge Denies Underwriter’s Dismissal Bid In Yacht Damage Coverage Row With Insurer

KANSAS CITY, Kan. — A Kansas federal judge denied an insurance underwriter’s motion to dismiss a coverage dispute in which an insurer seeks a determination that a yacht that was damaged is excluded from coverage, finding that because the court previously decided that it had jurisdiction over the underwriter, the underwriter’s renewed request for dismissal is denied as an “attempt to take a second bite from the proverbial apple.”
July 29, 2024
No Coverage Owed For Fire Damage To Insured’s Cannabis Crops, Insurer Argues

NEW HAVEN, Conn. — An insurer moved for summary judgment in its declaratory judgment lawsuit disputing coverage for the insured’s claim for losses arising from an exploding lamp that caused fire damage to 998 marijuana plants, arguing to a Connecticut federal court that the insured’s flowering room’s two-month unavailability had no effect on its production process to warrant business income coverage and the insured’s only purported losses stem from its inability to sell cannabis products that were derived from the fire-damaged crops and property.
July 26, 2024
Judge Tosses Coverage Suit Over Day Care Negligence For Lack Of Jurisdiction

ST. LOUIS — A federal judge in Missouri on July 25 dismissed without prejudice an insurer’s lawsuit disputing coverage for an underlying negligence claim against a day care worker who pleaded guilty to assault against a minor, finding that the insurer’s lawsuit fails to present a controversy appropriate for judicial determination.
July 26, 2024
Panel: Auto Insurer Owes No Coverage For Wrongful Death Suit Arising From Shooting

CLEVELAND — An Ohio appeals panel on July 25 affirmed a lower court’s ruling that an automobile insurer has no duty to defend or indemnify its off-duty police officer insured against an underlying wrongful death lawsuit arising from a fatal shooting, finding that it was not the insured’s “ownership, maintenance, or use” of his vehicle that led to the underlying death.
July 26, 2024
Judge: Sexual Abuse Claims Against Coach Are Not ‘Occurrences’; No Coverage Owed

TACOMA, Wash. — A federal judge in Washington granted a homeowners insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify its insured against an underlying sexual abuse lawsuit, concluding that the underlying claims of intentional sexual abuse are not accidental and, as a result, do not constitute an “occurrence” to trigger policy coverage.
July 26, 2024
Plaintiffs Drop Lloyd’s From U.S. Suit Over Warehouse After English Ruling

NEW YORK — A group of defendants whose presence was deemed to cause subject matter jurisdiction problems has been dismissed under a stipulation approved by a New York federal judge 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 25, 2024
Insurer Fails To Show Insured’s Concealment Of Commercial Fireworks Was Intentional

BISMARCK, N.D. — A federal judge in North Dakota on July 24 ruled in favor of an insured in a homeowners insurer’s declaratory judgment lawsuit disputing coverage for underlying property damage and personal injuries caused by a fireworks explosion, finding that the policy’s misrepresentation provision does not bar coverage because the insured did not willfully conceal or misrepresent any material facts regarding his use and storage of commercial fireworks at his Bismark property.
July 23, 2024
Pollution Exclusion Bars Coverage For Gasoline Leak, Panel Says In Reversing

FRANKFORT, Ky. — The Kentucky Court of Appeals reversed a trial court’s ruling entered against an insurer in a coverage dispute over damages caused by a gasoline leak because the policy’s pollution exclusion applies as a bar to coverage based on the conclusion that gasoline is a pollutant when it leaks from an underground storage tank and damages a neighboring property.
July 23, 2024
Insureds: Insurers’ ‘Greed’ Put ‘Selfish Profits’ Ahead Of Maui Wildfire Victims

MAUI, Hawaii — Insureds sued their insurers for bad faith in a Hawaii court, alleging that the insurers’ subrogation lawsuit seeking to recover compensation for the payments that they made to victims of the Aug. 8, 2023, Maui wildfires is “unfair, inequitable, and unlawful” because they “seek to take money away from their premium-paying insureds who are the real victims of the Maui Wildfires without showing that these victims have been fully compensated.”
July 23, 2024
9th Circuit: California High Court’s Answer Resolves Appeal In Insurer’s Favor

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on July 22 affirmed a lower federal court’s ruling in favor of an insurer after the California Supreme Court answer “no” to the panel’s certified question and found that the “actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
July 23, 2024
Former Modell CEO’s Appeal Withdrawn In D&O Coverage Dispute

NEW YORK — One day after the parties filed an agreement and joint stipulation of dismissal, the Second Circuit U.S. Court of Appeals dismissed the appeal of the former chief executive officer of the now bankrupt Modell’s Sporting Goods Inc. (MSGI) seeking review of a lower federal court’s ruling that granted a directors and officers liability insurer’s motion to dismiss his breach of contract and declaratory judgment lawsuit.