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Preview: LexisNexis® Mealey's™ Emerging Insurance Disputes Legal News

LexisNexis® Mealey's™ Emerging Insurance Disputes Legal News



Headline Emerging Insurance Disputes Legal News from LexisNexis®



 



9th Circuit Says It Lacks Jurisdiction To Review Remand Order In Class Action Suit
SEATTLE - Noting an issue of first impression, the Ninth Circuit U.S. Court of Appeals on Jan. 3 dismissed an insurer's petition for permission to appeal a lower court's remand order in a class action lawsuit founded on federal question jurisdiction but concluded that because the insurer's notice of removal was not untimely, the lower court erred in awarding $18,330 in attorney fees to the plaintiff (Chan Healthcare Group, PS v. Liberty Mutual Fire Insurance Co., et al., Nos. 16-35210, 16-80019, 9th Cir.; 2017 U.S. App. LEXIS 19).



11th Circuit Affirms Dismissal Of Federal Conspiracy Claims Against Insurer
ATLANTA - The 11th Circuit U.S. Court of Appeals on Dec. 5 affirmed a lower court's dismissal of an insured's federal conspiracy claims against his homeowners insurer, a claims investigator and a deputy sheriff arising from the insured's claim that $496,641 was stolen from his home (Windham Todd Pittman v. State Farm Fire & Casualty Co., et al., No. 16-10144, 11th Cir.; 2016 U.S. App. LEXIS 21610).



New York Panel: Negligence Not Required To Trigger Coverage For Additional Insured
NEW YORK - A New York appeals panel on Jan. 3 affirmed a lower court's ruling that an insurer has a duty to defend and indemnify an additional insured against an underlying personal injury lawsuit (Nova Casualty, et al. v Harleysville Worchester Insurance Co., et al., No. 2632, 116359/10, N.Y. Sup., App. Div.; 1st Dept.; 2017 N.Y. App. Div. LEXIS 39).



Panel Affirms $714,450.24 Ruling In Favor Of Target In Dispute Over CGL Coverage
CHICAGO - The Seventh Circuit U.S. Court of Appeals on Dec. 29 affirmed a lower federal court's finding that a commercial general liability insurer has a duty to defend or indemnify Target Corp. as an additional insured against an underlying lawsuit brought by a customer who was injured when a fitting room door fell on her (Selective Insurance Company Of South Carolina v. Target Corp., No. 16-1669, 7th Cir.; 2016 U.S. App. LEXIS 23370).



New York Panel: Insurer Owes City Defense For 4 Out Of 5 Personal Injury Suits
NEW YORK - A New York appeals panel on Dec. 29 held that an insurer has a duty to defend New York City as an additional insured under policies issued to one of its contractors against four out of five underlying personal injury lawsuits, modifying a lower court's order in part (The City of New York v. Wausau Underwriters Insurance Co., et al., No. 2182, 651283/14, N.Y. Sup., App. Div., 1st Dept.; 2016 N.Y. App. Div. LEXIS 8786).



Panel: Medical Practice Group, Doctor Failed To Comply With Reporting Requirements
DAYTON, Ohio - An Ohio appeals panel on Dec. 23 affirmed a lower court's ruling that a medical malpractice insurer did not commit breach of contract or act in bad faith when it refused to defend a medical practice group and one of its doctors against an underlying medical malpractice claim (Wright State Physicians Inc., et. al. v. The Doctors Company, an Interinsurance Exchange, No. 27084, Ohio App., 2nd Dist.; 2016 Ohio App. LEXIS 5183).



11th Circuit Vacates, Remands Ruling In Insurer's Favor In Fax Ads Coverage Dispute
ATLANTA - The 11th Circuit U.S. Court of Appeals on Dec. 29 vacated a lower federal court's ruling that an insured is not owed coverage for claims that it sent unsolicited fax ads because it failed to comply with its general liability insurance policies' notice requirements, remanding the issues of coverage and bad faith (G.M. Sign Inc., as judgment creditor; and assignee of MFG.com v. St. Paul Fire And Marine Insurance Co., No. 16-14905, 11th Cir.; 2016 U.S. App. LEXIS 23376).



Valid Controversy Exists Between Insurers, Insureds As To Settlement, Judge Says
WILMINGTON, Del. - A Delaware judge on Dec. 21 held that there is an actual controversy between excess directors and officer liability insurers and insureds regarding an underlying settlement over stockholders claims, refusing to dismiss the insurers' declaratory judgment claim (Arch Insurance Co., et al. v. David H. Murdock, et al., No. 01-104, Del. Super.; 2016 Del. Super. LEXIS 645).



1st Circuit Affirms Homeowners Insurer Has No Duty To Defend
BOSTON - The First Circuit U.S. Court of Appeals on Dec. 7 found that a homeowners insurance policy draws a clear distinction between an insurer's duty to defend that applies to suits alone and the insurer's right to investigate that applies to both suits and claims, affirming a lower federal court's ruling that the insurer has no duty to defend its insured (Harry Sanders, executor of the Estate of Nancy A. Andersen and assignee of John Doe, v. The Phoenix Insurance Co., et al., No. 15-2539, 1st Cir.; 2016 U.S. App. LEXIS 21773).



Insured Seeks Rehearing Of 6th Circuit's Ruling In Defective Knee Implant Suit
CINCINNATI - Because a Michigan federal judge did not address an insured's arguments as they pertained to the issues of waiver and promissory estoppel in a coverage suit involving defective knee implants, the Sixth Circuit U.S. Court of Appeals erred in failing to remand the case to the federal court for a decision on those issues, an insured argues in a Dec. 2 petition for rehearing (Stryker Corp., et al. v. National Union Fire Insurance Company of Pittsburgh, Pa., et al., Nos. 15-1657 and 15-1664, 6th Cir.).



Panel: Nurse Employed By Agency Qualifies As 'Employee' Of Hospital Under Policy
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on Dec. 6 held that a nurse who was employed by a staffing agency and assigned to work at a hospital qualifies as a hospital "employee" under its insurance policy, vacating and remanding an equitable contribution lawsuit arising from a medical malpractice claim (Interstate Fire and Casualty Co. v. Dimensions Assurance Ltd., No. 15-1801, 4th Cir.; 2016 U.S. App. LEXIS 21710).



Insured Tells 7th Circuit It Provided Proper Notice Of Bad Faith Claim
CHICAGO - An insured has asked the Seventh Circuit U.S. Court of Appeals to reverse a lower federal court's finding that it was not entitled to indemnity under a professional liability insurance policy because it failed to provide its insurer with proper written notice of a $17 million demand in an underlying bad faith dispute (Lexington Insurance Co. v. Horace Mann Insurance Co., et al., No. 16-2352, 7th Cir.).



Supreme Court Finds No Dismissal Mandate For False Claims Act Seal Violations
WASHINGTON, D.C. - In a unanimous ruling, the U.S. Supreme Court on Dec. 6 held that the False Claims Act (FCA) "does not enact so harsh a rule" as mandating dismissal of a relator's lawsuit under the act for a violation of the statute's requirement that the relator's complaint remain sealed, affirming a ruling of the Fifth Circuit U.S. Court of Appeals (State Farm Fire & Casualty Co. v. United States, ex rel. Cori Rigsby, et al., No. 15-513, U.S. Sup.; 2016 U.S. LEXIS 7420).



Illinois Panel: Appeal Seeking Coverage For $8.4M Junk Fax Ads Award Is Untimely
CHICAGO - An Illinois appeals panel held Dec. 5 that it lacks jurisdiction to hear a claimant's appeal in a dispute over insurance coverage for an underlying $8,414,374.50 judgment arising from unsolicited fax advertisements in violation of the Telephone Consumer Protection Act (TCPA), rejecting the claimant's argument that its certificate of service was timely under the "mailbox rule" (Targin Sign Systems, Inc. v. Illinois Casualty Co., No. 1-15-3538, Ill. App., 1st Dist., 1st Div.; 2016 Ill. App. Unpub. LEXIS 2562).



Court Properly Disregarded Portions Of Expert Witness' Affidavit, 9th Circuit Says
PORTLAND, Ore. - The Ninth Circuit U.S. Court of Appeals on Dec. 5 held that a lower federal court did not err in disregarding the heat-related portions of an affidavit from an expert witness in a dispute over coverage for a building collapse (Tarleton LLC v. State Farm Fire and Casualty Co., No. 14-35540, 9th Cir.; 2016 U.S. App. LEXIS 21636).



Texas High Court Refuses To Rehear Stowers Action Arising From Wrongful Death
AUSTIN, Texas - The Texas Supreme Court has denied a motion to rehear a lawsuit alleging that insurers failed to act in good faith to settle a liability claim stemming from a wrongful death, according to its orders pronounced Dec. 2 (Roy Seger, et al. v. Yorkshire Insurance Co. Ltd., et al., No. 13-0673, Texas Sup.).



Coverage Owed For Vitamin E Supplement Claims, Texas Federal Judge Determines
WICHITA FALLS, Texas - Because an excess liability policy provides coverage for the negligent conduct of an insured arising from the manufacture and distribution of a vitamin E supplement, class plaintiffs are entitled to access $15 million held in the court's registry, a Texas federal judge said Dec. 2 in granting the class plaintiffs' motion for summary judgment (Victoria Klein et al., v. Federal Insurance Co. et al., No. 09-094, N.D. Texas; 2016 U.S. Dist. LEXIS 166285).



California Panel Affirms Attorney Fees Order As Modified, Reduces Award By $9,994
LOS ANGELES - A California appeals panel on Dec. 1 affirmed a lower court's attorney fee award in favor of an insurer except as to $9,994.76 in fees that were not recoverable, reducing the total award to $73,218.29 (Wertheim LLC v. The Bar Plan Mutual Insurance Co., No. B268539, Calif. App., 2nd Dist., Div. 5; 2016 Cal. App. Unpub. LEXIS 8558).



Federal Judge Grants Management Liability Insurer's Motion For Default Judgment
SAN FRANCISCO - A California federal judge on Nov. 29 granted a management liability insurer's motion for a default judgment in its declaratory judgment lawsuit disputing coverage for underlying workplace harassment claims against its insured's directors and officers (Maxum Indemnity Co. v. Sullivan Vineyards Corporation, et al., No. 16-03611, N.D. Calif.).



Judge: Fact Issue Exists As To Whether Professional Services Exclusion Was In Policy
JONESBORO, Ark. - Ruling on dueling summary judgment motions, an Arkansas federal judge concluded Nov. 28 that there is a genuine factual dispute concerning whether a professional services exclusion was included in a commercial general liability insurance policy when an underlying injury occurred at a day care (Penn-Star Insurance Co. v. New Edition Early Learning Academy, et al., No. 15-104, E.D. Ark.; 2016 U.S. Dist. LEXIS 163196).



Insurers Amend Federal Complaint To Add Claim Under Defend Trade Secrets Act
TRENTON, N.J. - Insurers on Nov. 28 filed a second amended complaint in the U.S. District Court for the District of New Jersey to add a federal claim under the Defend Trade Secrets Act of 2016 (DTSA) in their lawsuit alleging the defendants participated in a scheme to "willfully and maliciously" target and solicit at least 15 of its employees for employment (Chubb INA Holdings Inc. [f/k/a The Chubb Corporation], et al. v. Michael Chang, et al., No. 16-2354, D. N.J.).



Panel Reverses Ruling In Insurer's Favor In Errors, Omissions Liability Dispute
HARTFORD, Conn. - A Connecticut appeals court found that an insurer's duty to defend was not barred by a public entity errors and omission liability insurance policy's contract exclusion because an underlying complaint left open the possibility that a negligent misrepresentation claim against the insured did not arise out of a contract, reversing and remanding a lower court in an opinion to be officially released Dec. 6 (Town of Monroe v. Discover Property and Casualty Insurance Co., No. AC 38332, Conn. App.; 2016 Conn. App. LEXIS 443).



Judge: Excess Insurer Not Liable For Equitable Contribution Of Doctor's Defense Costs
PRESCOTT, Ariz. - An Arizona federal judge on Nov. 22 rejected a professional liability insurer's argument that a captive insurer is a primary insurer and must equitably contribute to the defense and indemnity costs incurred by a physician sued for medical negligence (Admiral Insurance Co. v. Community Insurance Group SPC Limited, No. 14-08152, D. Ariz.; 2016 U.S. Dist. LEXIS 161873).



Alabama High Court: Additional $3M Not Triggered For Wrongful Death, Injury Claims
MONTGOMERY, Ala. - The Alabama Supreme Court on Nov. 18 held that a lower court erred in finding that an insurance policy's products/completed-work-hazard aggregate limit applied to expand an insurer's liability from $4 million to $7 million for underlying wrongful death and personal injury claims against a pharmaceutical company insured, reversing in part (Pharmacists Mutual Insurance Company v. Advanced Specialty Pharmacy LLC, et al., No. 1140046, Ala. Sup.; 2016 Ala. LEXIS 131).



Insured Did Not Comply With Policy's Consent-To-Settle Provision, Appeals Panel Says
CINCINNATI - An excess liability insurer has no duty to reimburse an insured for underlying settlements related to defective knee implants because the policy's consent-to-settle provision clearly required the insured to seek the excess insurer's consent and the insured failed to do so, the Sixth Circuit U.S. Court of Appeals said Nov. 18 in reversing a Michigan federal judge's ruling (Stryker Corp., et al. v. National Union Fire Insurance Company of Pittsburgh, Pa. et al., Nos. 15-1657 and 15-1664, 6th Cir.; 2016 U.S. App. LEXIS 20653).



4th Circuit Affirms Ruling In Insurer's Favor In Breach Of Contract Suit
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on Nov. 22 affirmed a lower federal court's ruling in favor of an insurer in a lawyer and his consulting firm's lawsuit alleging breach of contract, unjust enrichment, conversion, unauthorized use of name and trademark and copyright infringement (Devil's Advocate LLC, et al. v. Zurich American Insurance Co., No. 15-1048, 4th Cir.; 2016 U.S. App. LEXIS 20952).



Fitbit Sues Insurer For Bad Faith, Challenges Reliance On 'Prior Offense' Exclusion
SAN FRANCISCO - Fitbit Inc. on Nov. 23 sued its insurer for breach of contract and bad faith in federal court in California, seeking a declaration that the insurer has a duty to defend it against an underlying trademark dispute with a competitor (Fitbit Inc. v. Federal Insurance Co., No. 16-06791, N.D. Calif.).



Panel: Settlement Agreement Made In Bad Faith, Cannot Be Enforced Against Insurer
ATLANTA - The 11th Circuit U.S. Court of Appeals on Nov. 17 held that a lower federal court properly applied the appropriate framework to determine whether an underlying settlement agreement could be enforced against an insurer, further affirming the lower court's finding that bad faith in the negotiation of the settlement agreement rested on substantial evidence (Orline Sidman, et al. v. Travelers Casualty and Surety, No. 15-15197, 11th Cir.; 2016 U.S. App. LEXIS 20580).



Federal Judge: False Claims Suit Arose Out Of Insured's Professional Services
SAN FRANCISCO - A California federal judge on Nov. 15 held that an underlying qui tam action brought against an insured under the False Claims Act arose out of the insured's professional services and, therefore, coverage is barred by the policy's professional services exclusion, dismissing breach of contract and bad faith claims against the insurer (HotChalk Inc. v. Scottsdale Insurance Co., No. 16-3883, N.D. Calif.; 2016 U.S. Dist. LEXIS 163046).



Louisiana Panel Affirms Ruling Granting Exception Of Res Judicata In Bad Faith Suit
NEW ORLEANS - A Louisiana appeals panel on Nov. 16 affirmed a lower court's ruling that granted an exception of res judicata and sustained exceptions of no cause and no right of action in favor of insurance agencies in a claimant's bad faith lawsuit (Munson Fletcher d/b/a Fletcher's Auto Sales and Service v. Southern Insurance Agency, No. 2016-0238, La. App., 4th Cir.; 2016 La. App. LEXIS 2126).



California Panel Affirms Ruling In Favor Of Insurer, Broker In Negligence Suit
SAN FRANCISCO - A California appeals panel on Nov. 14 affirmed a lower court's ruling in favor of a life insurer and an insurance agent in a negligence lawsuit brought by the insured's beneficiaries, finding that the beneficiaries are barred from relying on negligence per se to defeat summary judgment (Pacific Coast Drilling Company, Inc., et al. v. Farmers New World Life Insurance Co., et al., Nos. A140423 and A141464, Calif. App., 1st Dist., Div. 2).



Retailer Says Insurers Had Broad Duty To Defend In Computer Spyware Suits
SAN FRANCISCO - In a Nov. 15 reply brief in the Ninth Circuit U.S. Court of appeals, a rent-to-own (RTO) retailer argues that its insurance providers had a broad duty to defend it in underlying lawsuits over its installation of spyware on customers' computers, contending that a trial court erred in construing a recording and distribution policy exclusion in favor of the insurers and against coverage (American Economy Insurance Co., et al. v. Aspen Way Enterprises Inc., et al., No. 16-35059, 9th Cir.).



Architect Asks Panel To Find Proof Of Claim In Bankruptcy Is A Final Judgment
NEW ORLEANS - An architect has asked the Fifth Circuit U.S. Court of Appeals to reverse a ruling in favor of a home builder's insurer in a breach of contract dispute arising from an underlying $63,471,000 copyright infringement dispute, arguing that an unobjected-to proof of claim in a bankruptcy case should be allowed and should become a final judgment when the bankruptcy case is closed (Kipp Flores Architects, LLC v. Mid-Continent Casualty Co., No. 16-20255, 5th Cir.).