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

Mealey's Emerging Insurance Disputes

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.”
September 26, 2024
Insurer Has Duty To Defend Sex Trafficking MDL, 9th Circuit Affirms

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Sept. 25 affirmed a lower federal court’s dismissal of a commercial insurer’s declaratory judgment arising from an underlying multidistrict litigation alleging that the insured is liable under Texas’ sex trafficking statutes, finding that the insurer’s duty to defend has not been extinguished because the underlying claims may impose liability on the insured that triggers coverage.
September 25, 2024
Insurers File Claims In Ship Owner’s Suit Seeking Exoneration For Bridge Collapse

BALTIMORE — New York Marine and General Insurance Co. and Certain Underwriters at Lloyd’s of London, Axis Syndicate 1686, on Sept. 24 became the fifth and sixth insurers to file a claim and answer to a petition for exoneration from or limitation of liability filed by the owner and technical manager of the ship that allided with and destroyed the Francis Scott Key Bridge in Baltimore on March 26.
September 25, 2024
Judge Refuses To Dismiss Breach Of Contract Claim In Coronavirus Coverage Suit

NEW YORK — A federal judge in New York denied “all risk” insurers’ motion to dismiss a breach of contract claim in a lawsuit filed by a holding company for the U.S. interests in the Mandarin Oriental Hotel Group alleging the “Special Perils Provision” in an endorsement of the policies provided coverage for its $14 million in business interruption/interference losses caused by infectious or contagious diseases that were “manifested by any person within a 5-mile radius of” its four hotels in Boston, New York, Miami and Washington, D.C., finding the insured plausibly alleged that its losses were covered by the endorsement.
September 25, 2024
Couple Urges 5th Circuit To Say Ross Remains Its Standard For Insurance Cases

NEW ORLEANS — Asking the Fifth Circuit U.S. Circuit Court of Appeals to reverse a U.S. Tax Court ruling concerning what they unsuccessfully argued were microcaptive insurance arrangements entitled to tax benefits, appellants contend in their opening brief that the Internal Revenue Service and Tax Court “restricted the meaning of the term ‘insurance’ contrary to Fifth Circuit and Supreme Court precedent.”
September 24, 2024
No Special Relationship Existed Between Broker And Insured, 9th Circuit Affirms

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurance broker in an insured’s negligence and broker malpractice lawsuit prompted by the losses it incurred from its replacement of defective, recalled light bulbs, finding that there was no special relationship between the broker and the insured based on the professional services the broker offered.
September 24, 2024
1st Circuit Majority Affirms Ruling In Favor Of Professional Liability Insurer

BOSTON — A majority of the First Circuit U.S. Court of Appeals affirmed a lower federal court’s judgment in favor of a professional liability insurer in a breach of contract lawsuit brought by the attorney insured’s assignee, rejecting the assignee’s contention that the insurer must demonstrate that it was prejudiced by the late notice of the underlying legal malpractice claim in order to deny coverage.
September 23, 2024
Noting ‘Evergreen Problem,’ Panel Remands Coverage Suit For Jurisdictional Discovery

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Sept. 20 held that an insurer and its television production company insured failed to establish the citizenship of limited liability companies in a coverage dispute arising from underlying injury claims brought against the insured by participants of the reality television show “My 600-lb Life,” remanding to a Texas federal court for jurisdictional discovery.
September 23, 2024
Pollution Exclusion Does Not Preclude Coverage For Suit Stemming From Breath Mints

ST. LOUIS — A Missouri federal judge on Sept. 20 granted a motion to dismiss an insurer’s suit seeking a declaration that no coverage is owed for an underlying suit seeking damages caused by a child’s ingestion of liquid breath mints that contained a chemical that damaged the child’s esophagus because the policy’s pollution exclusion cannot be interpreted as a bar to coverage for the underlying suit.