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

Mealey's Emerging Insurance Disputes

August 29, 2024
No Coverage Owed To 7-Eleven For Bodily Injury Suit, Federal Judge Rules

MIAMI — A federal judge in Florida granted insurers’ motion for summary judgment in a 7-Eleven store’s declaratory judgment lawsuit seeking coverage for a customer’s underlying bodily injury action alleging that a 7-Eleven employee physically struck him numerous times, finding that the general liability insurance policy’s assault and battery exclusion applied and the liquor liability insurance policy is inapplicable.
August 29, 2024
Judge Dismisses Coverage Dispute Over $1M Settlement Of Canceled Music Festival

AUSTIN, Texas — Two days after the parties filed a joint stipulation of dismissal, a federal judge in Texas on Aug. 28 dismissed an insured’s lawsuit seeking coverage for an underlying $1 million class action settlement arising from the insured’s refusal to refund ticket sales for the South by Southwest festival that was canceled due to the COVID-19 pandemic.
August 29, 2024
9th Circuit Certifies Equitable Subrogation Question To Nevada Supreme Court

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Aug. 28 certified a question to the Nevada Supreme Court in an equitable subrogation lawsuit arising from an underlying wrongful death action, asking the state’s highest court to determine: “Under Nevada law, can an excess insurer state a claim for equitable subrogation against a primary insurer where the underlying lawsuit settled within the combined policy limits of the insurers?”
August 29, 2024
Sexual Misconduct Exclusion Ambiguous, Nevada Federal Judge Determines

LAS VEGAS — An insured’s assignee, who is seeking to satisfy a $20 million judgment entered against the insured, is entitled to summary judgment on a breach of contract claim because the policy’s sexual misconduct exclusion is ambiguous and must be construed in favor of coverage, a Nevada federal judge said in granting the assignee’s motion.
August 29, 2024
Panel: Coach’s $1.77M Attorney Fee Award In Suit Over Prayer Is Barred From Coverage

SEATTLE — A Washinton appeals panel affirmed a lower court’s summary judgment ruling in favor of an insurer in a school district insured’s breach of contract lawsuit seeking indemnification for the $1.77 million attorney fee award it paid a high school football coach after a divided U.S. Supreme Court concluded that it erred when it removed the coach from his job for praying on the field after games because such expressions are constitutionally protected, finding that the award is excluded from coverage.
August 28, 2024
California Judge Enters Judgment In Hotel Insureds’ Coronavirus Coverage Dispute

LOS ANGELES — A California judge entered an amended judgment on a jury’s special verdict in favor of a commercial property insurer in hotel insureds’ breach of contract lawsuit arising from the COVID-19 pandemic after the parties signed a confidential settlement agreement and successfully requested dismissal of the insureds’ appeal.
August 27, 2024
Convenience Store Seeks CGL Coverage For Suit Arising From Mallory Beach Death

ATLANTA — A convenience store chain insured sued its commercial general liability insurers in a Georgia federal court for breach of contract and declaratory relief, seeking personal and advertising injury coverage for an underlying civil conspiracy and outrage/intentional infliction of emotional distress lawsuit arising from the boat crash that killed Mallory Beach.
August 27, 2024
Majority Affirms Judgment For Insured In Copyright Infringement Coverage Suit

CINCINNATI — A majority of the Sixth Circuit U.S. Court of Appeals affirmed a lower federal court’s $36,923,844.50 judgment in favor of an insured in a coverage dispute over underlying copyright infringement claims brought by record companies, rejecting the insurer’s argument that certain exclusions in the Internet and network security insurance policy barred coverage.
August 27, 2024
Appellant: Mortgage Lender Charged Insurance Premiums That Were Strictly Prohibited

RICHMOND, Va. — A plaintiff in a putative class action tells the Fourth Circuit U.S. Court of Appeals that the Credit Grantor Closed End Credit Provisions (CLEC) “strictly prohibit” a mortgage lender’s charge of insurance premiums in connection with a loan, seeking reversal of a lower federal court’s ruling that granted the lender’s motion for judgment.
August 27, 2024
Professional Services Exclusion Bars Coverage For Gas Tank Explosion Suits

PHILADELPHIA — A professional services exclusion included in a policy’s coverage parts for commercial general liability and contractor's pollution liability bars coverage for two underlying negligence suits stemming from a gas tank explosion alleged to have been caused by the insureds’ negligent inspection of the tank, the Third Circuit U.S. Court of Appeals said in affirming a district court’s opinion.
August 26, 2024
Delaware Judge Rules For Insurers In Coverage Dispute Over 218 Opioid Suits

WILMINGTON, Del. — A Delaware judge denied CVS Health Corp.’s motion for partial summary judgment and granted its insurers’ motion for partial summary judgment in their lawsuit disputing coverage for underlying opioid litigation, finding that CVS has failed to demonstrate any genuine issue of material fact that the underlying actions do not assert damages because of “bodily injury or property damage.”
August 23, 2024
Amicus Deadline On Economic Substance Doctrine Extended In Microcaptive Case

WASHINGTON, D.C. — A U.S. Tax Court judge who ordered supplemental briefing regarding the “economic substance doctrine” in consolidated cases involving purported microcaptive insurance companies and invited amicus curiae briefs “given the novelty of the issues” on Aug. 22 extended the deadline to move for leave to file a brief as amicus to Sept. 6.
August 23, 2024
7th Circuit Affirms Judgment For Insurer In Dispute Over Rescinded Policies

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a district court’s ruling granting summary judgment to a reinsurer seeking to rescind policies issued to a waste collection company for the company’s purported misrepresentations in policy applications regarding failure to disclose a dispute over misuse of the company name, finding that the misrepresentations were material and therefore supported rescission of the policies.
August 19, 2024
Homeowners Say Insurer Wrongfully Denied Coverage For Mine Subsidence Damages

OWENSBORO, Ky. — An insured couple claims that an insurer breached its contract and acted in bad faith by denying their claim for damages to their home caused by mine subsidence because the damages were documented and clearly caused by mine subsidence and not by earth movement or wear and tear as the insurer maintained in its coverage denial letter.
August 16, 2024
Tax Court Judge Sets Briefing On Economic Substance Doctrine In Microcaptive Case

WASHINGTON, D.C. — Saying amicus curiae briefs are welcome “given the novelty of the issues” in consolidated cases involving purported microcaptive insurance companies, a U.S. Tax Court judge ordered supplemental briefing regarding the “economic substance doctrine.”
August 14, 2024
Insurer Argues Policy Exclusions Bar Coverage For Fraud Claims Against Insureds

CHICAGO — An insurer filed suit in an Illinois federal court, seeking a declaratory judgment that it has no duty to defend or indemnify its insureds against underlying fraud claims because various exclusions in the investment adviser, professional services and directors and officers liability insurance policy bar coverage.
August 14, 2024
Panel Vacates Ruling In Coverage Suit Over Claim Tinder Misappropriated Idea

NEW YORK — The Second Circuit U.S. Court of Appeals on Aug. 13 vacated a lower federal court’s summary judgment ruling in favor of an insured and remanded for the lower court to determine in the first instance whether a New York statute might affect the timeliness of the insured’s notice of an underlying claim alleging that Tinder Inc. misappropriated a product-development consultant’s idea for a “Super Like” feature on the Tinder dating app without giving him the “promised compensation.”
August 14, 2024
Insured: Insurer Acted In Bad Faith In Denying Claim For Damage Caused By Collapse

PHILADELPHIA — An insured sued its commercial property insurer for breach of contract and bad faith in a Pennsylvania federal court, seeking coverage for damage caused by the partial collapse of the façade of a seven-story residential rental building.
August 14, 2024
Insurers: Virginia’s Public Policy Prohibits Coverage For Sex Trafficking Suit

NORFOLK, Va. — Two insurers filed suit in a Virginia federal court, seeking a declaratory judgment that they have no duty to defend or indemnify their mutual insured for a Jane Doe’s claims that she was trafficked for sex at a hotel that was owned or operated by the insured.
August 13, 2024
Federal Judge Dismisses 1 CGL Insurer From Coverage Suit Over BIPA Violation Claim

CHICAGO — Per the parties’ stipulation, a federal judge in Illinois on Aug. 12 dismissed without prejudice the claims and counterclaims between an insured and one of its commercial general liability insurers in the insured’s lawsuit seeking a declaration as to coverage for an underlying putative class lawsuit alleging that it violated the Illinois Biometric Privacy Act (BIPA) by using biometric time clocks to track employee working hours.
August 12, 2024
Insureds Drop Appeal In Coronavirus Coverage Suit In California

LOS ANGELES — One day after the insureds filed a request to dismiss their appeal of a Los Angeles County Superior Court’s judgment on a jury’s special verdict in favor of a commercial property insurer in a breach of contract coverage lawsuit arising from the coronavirus pandemic, Presiding Justice Gonzalo C. Martinez on Aug. 9 signed the order dismissing the appeal.
August 12, 2024
Marine Insurer, Insured Toss Suit After Judge Says Insured Breached Express Warranty

PHILADELPHIA — A marine insurer and a yacht owner insured filed a joint stipulation asking a Pennsylvania federal court to dismiss with prejudice all claims in the insurer’s lawsuit seeking a declaratory judgment that the insured’s failure to recertify or inspect its fire-suppression equipment rendered its maritime insurance policy void from the beginning approximately one month after a judge granted the insurer’s motion for summary judgment and found that the insured breached the express warranty.
August 12, 2024
Panel: Knowing Violation Of Rights Exclusion Relieves Insurers Of Duty To Defend

BOSTON — A Massachusetts appeals court affirmed a lower court’s judgment in favor of insurers in a coverage dispute arising from underlying trademark infringement and other claims brought against insureds, finding that the policy’s knowing violation of the rights of another relieved the insurers of their duty to defend.
August 12, 2024
Maryland Panel: Contractual Liability Exclusion Bars Professional Liability Coverage

ANNAPOLIS, Md. — The Maryland Appellate Court affirmed a lower court’s summary judgment ruling in favor of a professional liability insurer in a breach of contract lawsuit, finding that the policy’s contractual liability exclusion relieves the insurer from its duty to defend or indemnify against an underlying lawsuit.
August 12, 2024
Judge Rules Against Insurers In Suit Over Aircraft Leased To Russia Airlines

SAN FRANCISCO — A California judge denied insurers’ motion for summary judgment in insureds’ lawsuit seeking coverage for its $127,810,258.48 in losses arising from aircraft that was leased to Russian airlines and not returned following Russia’s invasion of Ukraine, concluding that the insurers have failed to demonstrate that the insureds did not suffer a physical loss under the policy’s aircraft hull coverage.