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

Mealey's Emerging Insurance Disputes

October 09, 2024
Chemical Company: Insurer Withheld Full Value Of Business Interruption Loss

BEAUMONT, Texas — A sustainable chemical company insured sued its insurer in a Texas federal court for breach of contract and declaratory judgment, seeking to obtain coverage for the full value of its business interruption loss caused by an explosion at a Texas plant.
October 09, 2024
Mediator: Restaurant, Insurer Settle Suit Over Looting Damage After Hurricane Maria

ST. CROIX, Virgin Islands — A mediator filed a report in a federal court in the Virgin Islands indicating that a restaurant insured and an insurer completely resolved their dispute over the insurer’s adjustment of the insured’s property damage claim and business interruption losses arising from looting after Hurricane Maria.
October 08, 2024
9th Circuit Grants Restaurants’ Motion To Dismiss Appeal In COVID-19 Coverage Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 7 granted a motion by owners, operators and managers of two Napa Valley, Calif., restaurants to dismiss their appeal in a coronavirus coverage dispute after the California Supreme Court dismissed its consideration of the Ninth Circuit’s certified question asking whether an insurance policy’s virus exclusion is unenforceable.
October 08, 2024
High Court Denies Certiorari In Auto Damage Suit Filed By Third-Party Claimant

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 7 denied a third-party claimant’s petition for writ of certiorari, refusing to review a California appellate court’s ruling that the claimant lacks standing to bring claims for negligence, intentional infliction of emotional distress (IIED) and bad faith against a tortfeasor’s auto insurer.
October 08, 2024
Coach Appeals Court’s Ruling That Sexual Abuse Claims Against Him Are Not Covered

TACOMA, Wash. — An insured filed an appeal notice asking the Ninth Circuit U.S. Court of Appeals to review a Washington federal court’s finding that a homeowners insurer has no duty to defend or indemnify him for an underlying sexual abuse lawsuit, challenging the court’s finding that the underlying claims of intentional sexual abuse are not accidental and, as a result, do not constitute an “occurrence” to trigger policy coverage.
October 08, 2024
Hawaii High Court Says GHGs Are Pollutants, Reckless Conduct Is Accident

HONOLULU — In response to two certified questions posed by a federal court in Hawaii in a suit filed by an insured petroleum company seeking coverage for underlying lawsuits alleging that the company is responsible for contributing to the effects of global warming based on its failure to warn of the hazards of using fossil fuel products, the Hawaii Supreme Court on Oct. 7 determined that an “accident” includes an insured’s reckless conduct and that greenhouse gases (GHGs) are pollutants as defined in the subject policies’ pollution exclusions.
October 07, 2024
N.Y. Court Allows Claims To Stand In University’s Suit Over Sexual Abuse Claims

NEW YORK —A New York appeals court unanimously affirmed a lower court’s denial of primary and excess commercial general liability insurers’ motion to dismiss the Rockefeller University’s claims for breach of the implied covenant of good faith and fair dealing and violation of New York General Business Law Section 349(a), allowing the claims to proceed in the dispute over coverage for several hundred underlying allegations that a former university employee sexually abused children for a span of 40 years.
October 07, 2024
8th Circuit Affirms Dismissal Of Class Action Alleging Fraud Against Insurer

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of an insurer’s motion to dismiss a putative class action alleging that insureds purchased long-term care insurance policies that contained optional inflation protection riders based on the insurer’s false representations that their premiums were not expected to increase, finding that their complaint does not allege a material false statement or omission that they relied on and, therefore, fails to allege a claim for fraud.
October 04, 2024
Panel Affirms No Coverage Owed For Class Actions Alleging Employees Were Underpaid

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Oct. 3 affirmed a lower federal court’s ruling that an insurance policy’s “wage and hour violation” exclusion barred coverage for two underlying class lawsuits alleging that the insured conducted an unlawful scheme of underpaying some of its employees.
October 04, 2024
Assault & Battery Endorsement Bars Coverage For Gunshot Injuries, Panel Affirms

DENVER — The 10th Circuit U.S. Court of Appeals on Oct. 3 affirmed a lower federal court’s ruling in favor of commercial insurer in a coverage dispute arising from underlying gunshot injuries, finding that the policy’s assault and battery endorsement barred coverage.
October 02, 2024
N.Y. Federal Magistrate Refuses To Transfer Venue Of Ghost Guns Coverage Suit

NEW YORK — A New York federal magistrate judge denied an insured’s motion to transfer the venue of an insurer’s declaratory judgment lawsuit disputing coverage for underlying claims that the insured violated federal, state and local laws when it deliberately sold and shipped ghost gun parts and kits to New York, finding that there are no special circumstances to warrant departure from the first-filed rule.
October 02, 2024
Judge: Insurer Has Duty To Defend, Indemnify Against Claims Arising From Collapse

CHICAGO — Granting an insured’s motion for partial summary judgment, a federal judge in Illinois held that an insurer has a duty to defend the insured against an underlying action alleging that the insured’s excavation work on ultraviolet disinfection facilities caused the collapse of an embankment supporting tracks for a line on the Chicago Transit Authority (CTA) and has a duty to indemnify the insured against a second lawsuit brought by the project’s general contractor.
October 02, 2024
English Appellate Court Rules Against Reinsurer In COVID-19 ‘Catastrophe’ Case

LONDON — Rejecting both main arguments a reinsurer advanced in a dispute over business interruption losses, a panel of the Court of Appeal of England and Walesagreed with a lower court’s ruling that under the reinsurance agreement, the COVID-19 pandemic is a “catastrophe” and an “Hours Clause” doesn’t exclude individual losses that continue to develop more than 168 hours after they first occur.
October 02, 2024
Federal Judge Stays BlueCross’ Bad Faith Suit Against Insurer Pending Mediation

HARRISBURG, Pa. — A federal judge in Pennsylvania administratively stayed Capital BlueCross’ breach of contract and bad faith lawsuit against its errors and omissions insurer to allow the parties to proceed through private mediation of the coverage dispute over an underlying antitrust multidistrict litigation.
October 02, 2024
Mississippi High Court Reverses Summary Judgment In Explosion Coverage Dispute

JACKSON, Miss. — The Mississippi Supreme Court held that fact issues preclude summary judgment in insurers’ subrogation lawsuit arising from an explosion at a gas processing plant, reversing the lower court’s grant of summary judgment in favor of the defendant and remanding for further proceedings.
October 01, 2024
Delaware Judge Denies Interlocutory Appeal In Earplug Liability Coverage Suit

WILMINGTON, Del. — A Delaware judge denied plaintiffs’ application for certification of interlocutory appeal of his summary judgment ruling in favor of liability insurers in a coverage lawsuit arising from an underlying earplug product liability multidistrict litigation that resulted in a $6 billion settlement and millions of dollars of defense costs.
October 01, 2024
Only Copyright Claim Survives In Atari’s Arcade Cabinet Row With State Farm

DALLAS — A federal judge in Texas said a copyright infringement claim brought by Atari Interactive Inc. against the State Farm Mutual Automobile Insurance Co. and advertising companies that worked with it for allegedly using an Atari arcade cabinet in a commercial without Atari’s permission can survive a motion to dismiss; however, the judge held that all other claims brought by the video game company fail.
October 01, 2024
Judge Dismisses Suit Disputing Coverage For BIPA Claims Over AI Food Phone Orders

CHICAGO — Following receipt of a businessowners insurer’s notice of voluntary dismissal, a federal judge in Illinois dismissed the insurer’s lawsuit 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.
September 30, 2024
Judge Orders Parties To File Stipulation Of Dismissal In Insurer Liquidation Case

TOPEKA, Kan. — After being advised of a settlement in the liquidation proceedings of an insolvent medical malpractice insurer, a Kansas federal judge in a docket-only entry ordered the parties to file a stipulation of dismissal by Nov. 18.
September 30, 2024
Alaska High Court Sides With ‘Overwhelming Majority’ In Coronavirus Coverage Suit

ANCHORAGE, Ala. — Finding “no reason to differ from the overwhelming majority” in answering “no” to two certified questions from an Alaska federal court, the Alaska Supreme Court held Sept. 27 that neither the presence of the coronavirus at an insured’s property nor operating restrictions that were imposed on an insured property by pandemic-prompted governmental orders constitute “direct physical loss of or damage to” the insured property to trigger coverage.
September 30, 2024
Dismissal Granted To D&O Insurer In Coverage Dispute With Insurance Commissioner

OKLAHOMA CITY — An Oklahoma federal judge granted a D&O insurer’s motion to dismiss a declaratory judgment suit filed against it by the Oklahoma insurance commissioner, as receiver of another insurer in liquidation whose parent company was insured under a policy issued by the D&O insurer, finding that neither the liquidation order nor the Oklahoma Uniform Insurers Liquidation Act (OUILA) gives the insurance commissioner standing to “succeed” to the rights of the directors or officers.
September 27, 2024
Farmers, USDA Spar Over Decision Regulators Made On Remand Of Crop Insurance Row

BAY CITY, Mich. — Farmers and federal regulators are again sparring in a Michigan federal court over a crop insurance dispute involving a dry-bean revenue endorsement (DBRE), with issues of contention now including whether the court retains jurisdiction after having awarded attorney fees under the Equal Access to Justice Act (EAJA) and whether regulators followed the court’s directions on remand.
September 27, 2024
Pennsylvania Supreme Court Reverses Coverage Ruling In Dentist’s Coronavirus Suit

PITTSBURGH — The Pennsylvania Supreme Court on Sept. 26 held that a dental practice insured is not entitled to commercial property insurance coverage for its financial losses incurred during the COVID-19 pandemic and the state’s nonessential business shutdown orders because its covered properties did not incur any physical loss or damage, reversing a Pennsylvania Superior Court majority’s ruling and ordering the case remanded for the trial court to enter summary judgment in favor of the insurer.
September 27, 2024
No Coverage Owed For Tavern Owner, Pennsylvania High Court Rules In COVID-19 Suit

PITTSBURGH — The Pennsylvania Supreme Court in a one-page order issued Sept. 26 affirmed a Pennsylvania Superior Court reversal of a lower court’s ruling in favor of a tavern owner insured in a coronavirus coverage dispute, citing the high court’s reasoning in Ungarean v. CNA, et al. that addressed the same issue on the same day.
September 27, 2024
Panel Denies Insurer’s Petition For Interlocutory Appeal In Coronavirus Dispute

DALLAS — A Texas appeals panel denied a commercial property insurer’s petition for an interlocutory appeal of a partial summary judgment order in a coronavirus coverage dispute, finding that an immediate appeal “would not materially advance the ultimate resolution of the case.”