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

Mealey's Emerging Insurance Disputes

October 15, 2024
Panel: No Professional Liability Coverage Owed For Gender Discrimination Claim

ST. PAUL, Minn. — The Minnesota Court of Appeals on Oct. 14 affirmed a lower court’s summary judgment ruling in favor of a medical professional liability insurer in a plastic surgeon insured’s breach of contract and bad faith lawsuit seeking coverage for a transgender woman’s claims that he discriminated against her based on her sexual orientation when he refused to perform breast augmentation surgery, finding that no coverage was triggered because it is clear that the underlying claims were based on an alleged gender-identity discrimination and not on a medical incident.
October 15, 2024
Judge Tosses Class Action Alleging Insurance Provider Failed To Prevent Data Breach

NEW YORK — One day after a plaintiff filed a notice of voluntary dismissal without prejudice of her class action complaint alleging that a financial organization that offers insurance, retirement and investment services primarily to teachers failed to prevent a May 2023 data breach that resulted in the theft of the personally identifiable information (PII) of its current and former clients, a New York federal judge ordered the case dismissed.
October 15, 2024
Judgment Entered In Favor Of Insured In Coverage Dispute Over Fireworks Explosion

BISMARCK, N.D.— A federal court in North Dakota entered a judgment 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 after 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.
October 14, 2024
Intervention Denied In Coverage Row Over Yacht Deemed ‘Remnant Of Its Former Self’

SAN JUAN, Puerto Rico — A Puerto Rico federal judge denied intervention in a declaratory judgment suit against an insured by parties whose boats were purportedly harmed by fire that spread from a nearby yacht the judge called a “charred remnant of its former self,” finding that the proposed intervenors failed to establish that their interests “are not adequately represented by the defendant.”
October 14, 2024
Freddie Mac Settles With 2nd Insurer In D&O Coverage Suit Over SEC Subpoena

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and a second insurer told a Washington federal court that they have reached a settlement in Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
October 14, 2024
Insurer Asks 9th Circuit To Reconsider Ruling In Sex Trafficking Coverage Dispute

SAN FRANCISCO — A commercial insurer filed a petition seeking rehearing of the Ninth Circuit U.S. Court of Appeals’ Sept. 25 ruling that affirmed a lower federal court’s dismissal of its declaratory judgment arising from an underlying multidistrict litigation alleging that the insured is liable under Texas’ sex trafficking statutes, challenging the panel’s finding that its duty to defend has not been extinguished because the underlying claims may impose liability on the insured that triggers coverage.
October 14, 2024
Judge Denies Summary Judgment In UCL Suit Over Insurer’s Liability Under Lost Policy

SANTA ANA, Calif. — A California federal judge on Oct. 11 denied an insurer’s motion for summary judgment on a suit brought against it for breach of contract and violation of California’s unfair competition law (UCL) by the successor-in-interest to a school that is being sued for a 1976 sexual assault of a student by a teacher and claims to be an insured under a policy, the physical copies of which neither party possesses.
October 14, 2024
Judge: ‘Multitude Of Issues’ Remain In Coverage Suit Over Fatal Drunk Driving Crash

STAMFORD, Conn. — A Connecticut judge denied an insurance agency’s motion for summary judgment that it had no duty to recommend or procure a liquor liability insurance policy for a mini market that would have covered the risks associated with its unlicensed and illegal sale of hard alcohol, finding there are a “multitude of issues” that preclude summary judgment in favor of the agency in a negligence lawsuit arising from a $24 million wrongful death settlement.
October 14, 2024
Owners Of Aircraft Valued At More Than $222M Sue Insurers In State Court

STAMFORD, Conn. — Claiming breach of contract and bad faith, five entities that own two freighter planes that they allege a Russian cargo airline has refused to return after the invasion of Ukraine have filed a suit in Connecticut state court against more than two dozen “insurers, underwriters, underwriting managers, and insurance subscribers of coverage in the international aviation insurance market.”
October 11, 2024
Private Equity Firms Amend Federal Complaint Against D&O, Cyber Liability Insurer

OMAHA, Neb.— Two private equity firms filed an amended complaint against their directors and officers and cyber liability insurer in a Nebraska federal court, seeking coverage for the alleged $2.8 million they lost when an imposter investor hacked a reserve account (Panorama Point Partners LLC, et al. v. Everest National Insurance Company, No. 24-393, D. Neb.).
October 11, 2024
Insurer: Alleged Sexual Assaults Do Not Constitute Religious Expression Injury

SEATTLE — A church’s insurer filed a declaratory judgment lawsuit in a Washington federal court, disputing coverage for an underlying claim alleging a minor was sexually assaulted on multiple occasions by the church’s deacon.
October 10, 2024
California Bishop Amends Complaint, Seeks Insurance Coverage For Sex Abuse Suits

SAN FRANCISCO — The Roman Catholic Bishop of Oakland, Calif., filed a fifth amended declaratory judgment and breach of statutory duty complaint in a California federal court against numerous insurers and the California Insurance Guarantee Association (CIGA), which the plaintiff believes assumed responsibilities for its now-insolvent insurer, seeking a declaratory judgment stating that the plaintiff is entitled to a defense and indemnity regarding covered claims for the more than 300 suits filed against it related to alleged clergy sexual abuse.
October 10, 2024
Federal Judge: Fact Issues Exist In Coverage Suit Over Claims Against Nursing Home

CHICAGO —A federal judge in Illinois granted in part and denied in part the parties’ motions for summary judgment in a senior care primary liability insurer’s lawsuit challenging coverage for an underlying $934,232 judgment in a wrongful death and negligence action alleging that an insured violated the Nursing Home Care Act by failing to meet the standard of care at its skilled nursing facility, finding that issues of fact preclude summary judgment on certain issues.
October 10, 2024
Wisconsin Panel: Claim Clearly Satisfies CGL Policy’s Definition Of Property Damage

MILWAUKEE — A Wisconsin appeals panel held that an insured’s claim “clearly” satisfies a commercial general liability insurance policy’s definition of property damage and its insurer has a duty to defend and possible indemnify it against underlying complaints over paint peeling and cracking on aluminum balconies that were fabricated by the insured, reversing a lower court’s grant of summary judgment in favor of the insurer and remanding for further proceedings.
October 10, 2024
9th Circuit Unseals Driver’s Brief Challenging GEICO’s ‘Unfair’ COVID-19 Rebates

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals unsealed a brief filed by a driver appealing a federal judge’s grant of summary judgment on her class action claim for violation of California’s unfair competition law (UCL) to GEICO for allegedly unfairly retaining an estimated $238 million in additional premium relief the driver says it owed insureds after the COVID-19 pandemic.
October 09, 2024
Bound By Another Planet, Judge Reconsiders Ruling Against Insurer In COVID-19 Suit

SANTA ANA, Calif. — A California federal judge on Oct. 8 granted an insurer’s motion to reconsider the court’s ruling that denied its motion for partial judgment on the pleadings in Live Nation Entertainment Inc.’s breach of contract lawsuit arising from the COVID-19 pandemic, dismissing with prejudice Live Nation’s claims for coverage that require a showing of physical loss or damage after concluding that the court is bound by the holding in Another Planet Entertainment, LLC v. Vigilant Insurance Co. that a “bare allegation” that “the actual or potential presence of the COVID-19 virus rendered [plaintiff's] property unusable for its intended purpose” is insufficient to demonstrate physical loss or damage to the insured property.
October 09, 2024
3rd Circuit Refuses To Rehear Consolidated Appeals In COVID-19 Coverage Suits

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Oct. 8 denied insureds’ petition seeking rehearing en banc of a panel’s rejection of 14 consolidated appeals of lower federal courts’ dismissals of the insureds’ lawsuits seeking coverage for their business interruption losses caused by the coronavirus and the subsequent shutdown orders, standing by the panel’s holding that the insureds’ loss of use of their properties’ intended business purposes is not a physical loss of property to trigger business income or extra expense under their respective policies.
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.