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

Mealey's Emerging Insurance Disputes

April 10, 2024
9th Circuit Partly Reverses Ruling In Insurers’ Favor In Coronavirus Coverage Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on April 9 held that a lower federal court properly granted insurers’ motion to dismiss all claims in a coronavirus coverage dispute that include the triggering language “direct physical loss or damage” to restaurant and hotel insureds’ properties but reversed the lower court’s denial of leave to amend a claim under the Crisis Event provision, which, the panel noted, does not include any language regarding “direct physical loss or damage.”
April 09, 2024
Judge Orders Insurer To Pay $2M To Co-Defendant In Chris Brown Insurance Fraud Row

MEMPHIS, Tenn. — A Tennessee federal judge ordered the insurer of a recording studio owned by musician Chris Brown, who was previously found liable for submitting a fraudulent insurance claim for burglary and fire at his studio, to pay $2,066,217.30 of a $2.5 million jury verdict to a co-defendant and lessee of the studio, finding that the lessee is entitled to recover that amount, which is based on 90% of the earning value of the lessee’s studio as attributed to its “gear.”
April 09, 2024
Insurer Seeks Rehearing In Dispute Over $1M Settlement Of Canceled Music Festival

NEW ORLEANS — An insurer filed a petition asking the Fifth Circuit U.S. Court of Appeals to reconsider its reversal of a lower federal court’s summary judgment ruling in its favor in the insured’s lawsuit seeking coverage for an underlying $1 million class action settlement arising from its refusal to refund ticket sales for the South by Southwest festival that was canceled due to the COVID-19 pandemic, challenging the panel’s finding that the policy’s contract and professional services exclusions do not bar coverage.
April 09, 2024
6th Circuit Affirms Rulings In Professional Liability Coverage Dispute

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 8 affirmed a lower federal court’s summary judgment rulings in a professional liability coverage dispute arising from a financial adviser insured’s valuations for a bankrupt paper manufacturing company and its Employee Stock Ownership Plan, finding that the insurer had a duty to defend its insured until only claims falling under a policy exclusion remained and that the insured has to reimburse the insurer for defending it after the same exclusion applied.
April 08, 2024
Insured Asks 5th Circuit To Rehear Professional Liability Coverage Dispute

NEW ORLEANS — An insured on April 5 filed a petition seeking rehearing en banc of the Fifth Circuit U.S. Court of Appeals’ March 21 per curiam opinion that affirmed a lower federal court’s summary judgment ruling in favor of a professional liability insurer in the insured’s lawsuit seeking coverage for underlying claims that she breached a subcontract by wrongfully soliciting the underlying plaintiff’s clients, asserting that the way the panel affirmed the lower court “without writing on the issues” “appears to approve a faulty process for determining the duty to Defend.”
April 08, 2024
Driver Appeals Grant Of Summary Judgment On UCL Claim For ‘Unfair’ COVID Premiums

SAN FRANCISCO — A driver on April 5 appealed to the Ninth Circuit U.S. Court of Appeals a California federal judge’s grant of summary judgment in favor of GEICO after finding that it did not violate California’s unfair competition law (UCL) by unfairly profiting from a premium giveback program initiated during the COVID-19 pandemic.
April 08, 2024
Insurer Moves To Reargue Dismissal Of Breach Of Contract Claims In Subrogation Suit

WILMINGTON, Del. — An insurer asked a Delaware court if it can reargue the court’s dismissal of its breach of contract claims for pleading deficiencies and file an amended complaint before dismissal with prejudice is entered on the breach of contract claims in its subrogation lawsuit seeking recovery from an application service provider for the amount paid to nonprofit insureds for investigative and remediation steps arising from a ransomware attack.
April 08, 2024
6th Circuit Affirms Ruling In Favor Of Maritime Cargo Insurer

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a lower court’s summary judgment ruling in favor of a maritime cargo insurer in an insured’s breach of contract lawsuit seeking coverage for its $5 million in unanticipated shipping expenses, finding that the policy’s Risks Covered and Shipping Expenses clauses do not provide coverage.
April 05, 2024
Panel Affirms Court’s Denial Of Insurer’s Motion To Intervene In Wrongful Death Suit

KANSAS CITY, Mo. — A Missouri appeals panel held that a lower court did not err in refusing to grant a homeowners insurer’s motions to intervene and stay a wrongful death lawsuit, rejecting the insurer’s contention that it had an “undeniable right” to intervention and a stay pursuant to existing Missouri case law.
April 05, 2024
Panel Vacates Ruling In Favor Of Logistics Company In Insurer’s Subrogation Suit

NEW YORK — The Second Circuit U.S. Court of Appeals on April 4 vacated a lower federal court’s summary judgment ruling in favor of a logistics company in an insurer’s subrogation lawsuit seeking coverage for its pharmaceutical manufacturer insured’s loss of more than $1.8 million in damaged cargo, finding that there is a genuine dispute of material fact regarding whether the logistics company was a contracting carrier subject to the Montreal Convention and its two-year statute of limitations.
April 04, 2024
Insured Appeals Court’s Ruling That Bump-Up Exclusion Bars D&O Coverage

ALEXANDRIA, Va. — An insured on April 3 filed a notice of appeal in a Virginia federal court asking the Fourth Circuit U.S. Court of Appeals to review the lower court’s holding 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.
April 03, 2024
Connecticut Panel Affirms Ruling In Insurer’s Favor In Tribe’s Coronavirus Suit

HARTFORD, Conn. — A Connecticut appeals court on April 2 affirmed a lower court’s judgment in favor of an insurer in an Indian tribe’s declaratory judgment lawsuit arising from the COVID-19 pandemic, rejecting the tribe’s contention that the lower court improperly determined that the policy’s contamination exclusion applied to bar the majority of its coverage.
April 03, 2024
Employee’s Injuries Barred By Policy Exclusion, Georgia Panel Rules In Reversal

ATLANTA — A Georgia appeals panel reversed a lower court’s denial of a commercial general liability and auto insurer’s amended motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an underlying injury that occurred at a job site, finding that the underlying injuries were barred by a policy exclusion.
April 02, 2024
N.J. Panel Affirms Ruling In Favor Of Excess Insurer In Suit Arising From Death

TRENTON, N.J. — A New Jersey appeals panel concluded April 1 that an unambiguous excess insurance policy is triggered upon exhaustion of the primary commercial general liability insurance policy’s $1 million coverage limit and not upon its $50,000 assault and battery sublimit, affirming a lower court’s summary judgment ruling in favor of the excess insurer in a coverage dispute over claims that the insured negligently failed to provide adequate security.
April 02, 2024
Parties Refile Stipulation Of Dismissal In Worker Injury Coverage Dispute

NEW YORK — Per a New York federal judge’s order, a subcontractor, a property owner and a construction manager on April 1 refiled their stipulation of dismissal of the claims between them in the subcontractor’s lawsuit arising from personal injury actions brought by two of its workers.
April 01, 2024
Delaware Judge Tosses Insurers’ Subrogation Suits Arising From Ransomware Attack

WILMINGTON, Del. — A Delaware judge dismissed insurers’ subrogation lawsuits seeking recovery from an application service provider for the amount they paid to their nonprofit insureds for investigative and remediation steps arising from a ransomware attack, finding that the fact that the data breach occurred and the nonprofits incurred expenses alone is not sufficient to state a claim under the policies.
April 01, 2024
Washington Judge Certifies 2 Questions In University’s Coronavirus Coverage Suit

SEATTLE — A Washington judge granted in part an insurer’s motion to certify issues to the Washington Court of Appeals for discretionary review in the University of Washington’s lawsuit seeking coverage for losses incurred by its medical and athletic properties due to the COVID-19 pandemic, staying the lawsuit pending resolution of the two controlling questions of law to determine whether commercial property insurance policies insure business income losses that are related to a pandemic.
April 01, 2024
9th Circuit Panel Refuses To Rehear Ruling In $40M Commercial Crime Coverage Suit

PASADENA, Calif. — A panel of the Ninth Circuit U.S. Court of Appeals on March 29 voted unanimously to deny insurers’ petition for panel rehearing challenging its reversal of 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, standing by its 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.
April 01, 2024
Panel Says It Lacks Jurisdiction To Hear Trustee’s Appeal In D&O Coverage Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals granted the Federal Deposit Insurance Corp.’s motion to dismiss a trustee’s appeal of a lower federal court’s orders dismissing claims against a failed bank’s officers and staying the remainder of the lawsuit pending completion of arbitration between the trustee and Ernst & Young LLP, finding that it lacks jurisdiction.
March 29, 2024
Insurer Defends Motion Seeking Appellate Review Of COVID-19 Coverage Dispute

SEATTLE — Replying to the University of Washington’s opposition to its motion to certify issues to the Washington Court of Appeals for discretionary review and to stay the university’s lawsuit seeking coverage for losses incurred by its medical and athletic properties due to the COVID-19 pandemic, an insurer argues that it is not seeking to delay the case but just wants “clear guidance” on the threshold legal question of whether commercial property insurance policies insure business income losses that are related to a pandemic.
March 29, 2024
7th Circuit: Crescent Plaza, Sandy Point Dental Foreclose Rome Hotel Owner’s Appeal

CHICAGO — The Seventh Circuit U.S. Court of Appeals held that its decisions in Crescent Plaza Hotel Owner, L.P. v. Zurich American Insurance Co. and Sandy Point Dental, P.C. v. Cincinnati Insurance Co. foreclose arguments by the owner of luxury hotel in Rome seeking coverage for its lost business income and extra expenses arising from the COVID-19 pandemic.
March 28, 2024
Ankle Monitor Is Potentially A Computer Triggering Professional Liability Coverage

CHICAGO — An Illinois appeals panel held March 27 that an ankle monitor, at the very least, is potentially computer hardware triggering professional services liability coverage, reversing a lower court’s summary judgment ruling in favor of an insurer in its declaratory judgment lawsuit disputing coverage for an underlying personal injury lawsuit.
March 28, 2024
Judge: Mortgage Loan Provider’s Loss Arose From Uncovered Disciplinary Proceeding

CHICAGO — A federal judge in Illinois granted an insurer’s motion to dismiss with prejudice a mortgage loan provider insured’s first amended complaint seeking coverage under a professional liability mortgagee's errors and omissions policy for its $1,275,000 payment arising from an investigation brought by Illinois Department of Financial and Professional Regulation (IDFPR), finding that there is no coverage because the insured’s losses both arose from an uncovered disciplinary proceeding and were uncovered fines, and a policy exclusion bars coverage.
March 28, 2024
Communicable Disease Exclusion Does Not Apply To Legionnaires’ Disease Lawsuits

NEW YORK — A commercial lines insurer’s communicable disease exclusion does not bar coverage for three underlying lawsuits alleging that residents of the insured properties contracted Legionnaires’ disease following exposure to Legionella bacteria at the properties because Legionnaires’ disease is not a communicable disease, a New York federal judge said in granting the insured’s motion for summary judgment.
March 27, 2024
Insurer Seeks High Court Review Of Remanded Class Action Challenging Its Practices

WASHINGTON, D.C. — An insurer filed a petition for a writ of certiorari asking the U.S. Supreme Court to review the Seventh Circuit U.S. Court of Appeals’ finding that a class action challenging its practices fits within the internal affairs and home state controversy exceptions to the Class Action Fairness Act (CAFA).