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®
Panel: Sports Participants Exclusion Bars Coverage For Lacrosse Player's Death
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Sept. 13 affirmed that there is no coverage for a college lacrosse player's fatal injury because it falls squarely under sports participants and athletic participants policy exclusions (Underwriters Safety and Claims Inc., et al. v. Travelers Property Casualty Company of America, et al., No. 16-5143, 6th Cir.).
Professional Race Car Driver Appeals No Coverage Ruling In 2nd Circuit
NEW YORK - Professional race car driver Anthony Wayne Stewart filed a notice of appeal on Aug. 26 asking the Second Circuit U.S. Court of Appeals to overturn a lower court's ruling that his primary and excess insurer has no duty to defend or indemnify him against an underlying wrongful death lawsuit brought by the estate of a fellow race car driver (Axis Insurance Co. v. Anthony Wayne Stewart, No. 16-2988, 2nd Cir.).
'Entrustment' Exclusion Bars Coverage For Theft, Vandalism Loss, Panel Affirms
MIAMI - A Florida appeals panel held Sept. 7 that a commercial insurance policy's "entrustment" exclusion applies to a third-party's actions as an insured's tenant and precludes coverage for the insured's theft and vandalism loss, rejecting the insured's argument that the exclusion is ambiguous (Grover Commercial Enterprises, Inc., etc. v. Aspen Insurance UK, Ltd., et al., No. 3D14-1987, Fla. App., 3rd Cir.).
Panel: No Commercial Crime Coverage Because Insured Made Material Misrepresentation
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Sept. 1 affirmed a lower federal court's summary judgment ruling in favor of commercial crime insurers in a Chapter 7 trustee's breach of contract and bad faith lawsuit seeking to recover stolen money (Heide Kurtz, solely in her capacity as Chapter 7th Trustee for the Estate of Namco Financial Exchange Corp. v. Liberty Mutual Insurance Co., et al., No. 14-55931, 9th Cir.; 2016 U.S. App. LEXIS 16217).
9th Circuit Says Watercraft Exclusion Bars Coverage For Contaminated Fish
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Sept. 9 affirmed a judgment entered in favor of an insured on a breach of contract claim in a petroleum contamination coverage suit, agreeing with a district court's determination that a watercraft exclusion bars coverage for the insured's fish oil that was contaminated with oil while stored on a ship (Trident Seafoods Corp., v. ACE American Insurance Co., No. 13-36035, 9th Cir.; 2016 U.S. App. LEXIS 16595).
Federal Judge Vacates Hearing On Insurer's Motion To Stay Rescission Dispute
SAN FRANCISCO - A California federal judge on Sept. 8 vacated a Sept. 22 hearing on an insurer's motion to stay and for permission to appeal the issue of whether concealment in an insurance policy rescission lawsuit is measured under California law when the insurance policy is formed or when the policy is delivered to the insured (Illinois Union Insurance Co., et al. v. Intuitive Surgical Inc., No. 13-04863, N.D. Calif.).
Texas High Court Agrees To Hear Dispute Over Insured Vs. Insured Exclusion
AUSTIN, Texas - The Texas Supreme Court granted a directors and officers liability insurer's petition to review an appeals court's finding that an insured vs. insured policy exclusion is inapplicable, according to its orders pronounced Sept. 2 (Great American Insurance Co. v. Robert Primo, No. 15-0317, Texas Sup.).
No Coverage For $2M Judgment Arising From Unsolicited Fax Ads, Majority Affirms
PHILADELPHIA - A majority of a Third Circuit U.S. Court of Appeals panel on Sept. 1 affirmed a federal court's ruling that an insurer has no duty to defend or indemnify a $2 million judgment entered against its insured as part of a class action settlement arising from unsolicited fax advertisements (Auto-Owners Insurance Co. v. Stevens & Ricci Inc., et al., No. 15-2080, 3rd Cir.; 2016 U.S. App. LEXIS 16182).
Federal Judge Stays Discovery In Suit Alleging Lender-Placed Insurance Scheme
MIAMI - A Florida federal judge on Sept. 2 granted defendants' motion to stay discovery pending resolution of their motions to dismiss an amended class action complaint alleging that they participated in a fraudulent scheme that overcharged borrowers for lender-placed insurance (LPI) (Jeffrey Parker, et al. v. AHMSI Insurance Agency Inc. d/b/a Belt Line Insurance Agency, et al., No. 15-23840, S.D. Fla.).
Filed-Rate Doctrine Bars Claims, Mortgage Servicer, Insurer Argue To 11th Circuit
ATLANTA - A mortgage servicer and an insurer on Sept. 9 answered the insureds' appeal in the 11th Circuit U.S. Court of Appeals, contending that the filed-rate doctrine bars all class action claims alleging that they overcharged force-placed insurance (FPI) premiums as part of a kickback scheme (Pankaj Patel, et al. v. Specialized Loan Servicing LLC, et al., No. 16-12100, 11th Cir.).
Panel Partly Vacates Ruling In Amtrak's Superstorm Sandy Suit Against Insurers
NEW YORK - The Second Circuit U.S. Court of Appeals on Aug. 31 found that a lower court erred when it prematurely granted summary judgment in favor of insurers on whether Amtrak was entitled to coverage under the Demolition and Increased Cost of Construction (DICC) clause in its insurance policies, vacating and remanding the Superstorm Sandy dispute in part (National Railroad Passenger Corp. v. Aspen Specialty Insurance Co., et al., No. 15-2358, 2nd Cir.; 2016 U.S. App. LEXIS 16074).
Diocese's Insurer Asks 2nd Circuit To Reverse Discovery, Breach Of Contract Rulings
NEW YORK - An insurer filed a notice of appeal on Aug. 29 in the Second Circuit U.S. Court of Appeals, seeking reversal of a lower federal court's $945,265.11 breach of contract judgment against it and an earlier discovery ruling in a dispute over coverage stemming from underlying sexual misconduct cases brought against its diocese insured (Hartford Roman Catholic Diocesan Corp. v. Interstate Fire & Casualty Co., No. 16-2999, 2nd Cir.).
Precious Metals Exclusion Bars Coverage For Alleged Theft, 5th Circuit Affirms
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Aug. 30 affirmed a lower court's ruling that an insurance policy's precious metals exclusion bars coverage for a church insured's claimed losses stemming from the theft of seven rooftop air conditioner condensers (Celebration Church Inc. v. United National Insurance Company, No. 16-30048, 5th Cir.; 2016 U.S. App. LEXIS 16061).
Insured Asks 7th Circuit To Reverse No Coverage Ruling For $5M Theft Claim
CHICAGO - A telecommunications company insured has asked the Seventh Circuit U.S. Court of Appeals to reverse a lower federal court's dismissal of its breach of contract and bad faith claims in a coverage dispute arising from an alleged $5 million theft of property and inventory (Telamon Corp. v. The Charter Oak Fire Insurance Co., et al., No. 16-1205, 7th Cir.).
Judge: Insurer Has Alleged 2nd Insurer Has Duty To Defend Suit Against Football Team
SAN JOSE, Calif. - A California federal judge on Aug. 29 held that a commercial general liability insurer has alleged that some of the claims in an underlying lawsuit against the San Francisco Forty Niners Football Co. and others are potentially covered by a second insurance policy (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 16-02114, N.D. Calif.; 2016 U.S. Dist. LEXIS 115872).
9th Circuit Certifies Question Of 'Exceptional Importance' To California Insurers
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Aug. 22 certified a question to the California Supreme Court to determine whether an injured third party's claims against an employer for negligent hiring, retention and supervision of an employee who intentionally injured the third party constitutes an "occurrence" under the employer's commercial general liability insurance policy (Liberty Surplus Insurance Corporation, et al. v. Ledesma and Meyer Construction Co., Inc., et al., No. 14-56120, 9th Cir.; 2016 U.S. App. LEXIS 15352).
Panel: Products Exclusions Bar Coverage For State's Prescription Drug Abuse Suit
ATLANTA - The 11th Circuit U.S. Court of Appeals on Aug. 26 affirmed a lower court's ruling that two general liability insurers have no duty to defend or indemnify their pharmaceutical distributor insured against the State of West Virginia's lawsuit seeking to recover billions in damages for the state's prescription pharmaceutical drug abuse epidemic (The Travelers Property Casualty Company of America, et al. v. Anda Inc. and Watson Pharmaceuticals Inc., No. 15-11510, 11th Cir.; 2016 U.S. App. LEXIS 15760).
Panel: Claims Looked, Walked, Quacked Like Typical Trademark Infringement Claims
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Aug. 26 affirmed a lower federal court's finding that an insurer has no duty to defend its insured against an underlying trademark dispute, concluding that the underlying claims "looked, walked, and quacked only like typical trademark infringement claims-not unpled disparagement or trade dress claims" (S. Bertram, Inc. v. Citizens Insurance Company of America, No. 15-2552, 6th Cir.; 2016 U.S. App. LEXIS 15886).
Professional Malpractice Suit Constitutes 1 'Claim' Under Policy, Judge Says
PHILADELPHIA - A Pennsylvania federal judge on Aug. 25 found that an underlying professional malpractice lawsuit against an attorney insured constitutes a single "claim" under a professional liability insurance policy, declaring that the insurer's contractual liability defense and indemnity is limited to $500,000 (Westport Insurance Corp. v. Peter G. Mylonas, et al., No. 14-5760, E.D. Pa.; 2016 U.S. Dist. LEXIS 114867).
1st Circuit To Hear Coverage Claim Over Lawyer's Conduct
BOSTON - Oral argument is scheduled to begin Sept. 9 in a case in which the First Circuit U.S. Court of Appeals is asked to decide whether a trial court erred in ruling that a professional liability insurance policy issued by American Guarantee & Liability Insurance Co. (AGLIC) provided no coverage to a lawyer who misrepresented facts in a Massachusetts land deal (American Guarantee & Liability Insurance Co. v. John F. Lamond, et al., No. 16-1375, 1st Cir.).
Contamination Caused By Defective Plastic Bag Is An Occurrence, 8th Circuit Says
ST. LOUIS - The contamination of landscaping materials with plastic from defective storage bags is an occurrence under the terms of an insurance policy, the Eighth Circuit U.S. Court of Appeals said Aug. 19 in reversing a district court's judgment in favor of the insurer (Decker Plastics Inc. v. West Bend Mutual Insurance Co., No. 15-2861, 8th Cir.; 2016 U.S. App. LEXIS 15235).
Judge: No Coverage For Claims Arising From Purchase Of Fuel With Invalid ID Numbers
EAST ST. LOUIS, Ill. - An Illinois federal judge on Aug. 18 entered judgment in favor of an insurer after finding that it has no duty to defend or indemnify against claims arising from the insured's purchase of biodiesel fuel with invalidated renewable identification numbers (RINs) (Superior Fuels Inc. v. Nationwide Agribusiness Insurance Co., No. 14-1420, S.D. Ill.; 2016 U.S. Dist. LEXIS 108423).
Assigned Claims Were Released By Assignors, Judge Says In Fiduciary Liability Suit
JACKSON, Miss. - A Mississippi federal judge held Aug. 16 that assigned claims against a fiduciary liability insurer were released by the assignors in a confidential settlement agreement and release, granting the insurer's motion to dismiss a breach of contract and bad faith lawsuit (Vincent Sealey v. Beazley Insurance Co. Inc., et al., No. 15-768, S.D. Miss.; 2016 U.S. Dist. LEXIS 108340).
Judge: 'Sophisticated' Attorneys Failed To Provide Insurer Timely Notice Of Suit
CHICAGO - An Illinois federal judge on Aug. 15 held that the failure of insureds, "as sophisticated lawyers," to review the terms of their commercial general liability insurance policy against underlying claims against them for eight months is unreasonable as a matter of law, finding that their insurer has no duty to defend or indemnify them (Sentinel Insurance Company, LTD. v. Michael Cogan, et al., No. 15-8612, N.D. Ill., Eastern Div.; 2016 U.S. Dist. LEXIS 107761).
Panel Affirms Ruling In Equitable Contribution Dispute Over Product Liability Suit
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Aug. 9 affirmed a lower federal court's ruling that an insurer's equitable contribution claim against a second insurer fails because the insurers did not share the same level of risk (Mitsui Sumitomo Insurance USA, Inc., et al. v. Tokio Marine & Nichido Fire Insurance Company, Ltd., No. 14-56337, 9th Cir.; 2016 U.S. App. LEXIS 14622).
Employment-Related Practices Exclusion Bars Coverage, Federal Judge Rules
INDIANAPOLIS - A commercial general liability insurance policy's employment-related practices exclusion bars coverage for underlying defamation claims arising from a failed business relationship, an Indiana federal judge ruled Aug. 8, finding that the insurer has no duty to defend or indemnify the underlying lawsuit (The Cincinnati Insurance Co. v. Global Caravan Technologies, Inc., et al., No. 14-01643, S.D. Ind.; 2016 U.S. Dist. LEXIS 104462).
Panel: Excess Insurer Has Alleged Viable Equitable Subrogation, Bad Faith Claims
LOS ANGELES - A California appeals panel on Aug. 5 held that the lack of an excess judgment against Warner Brothers Entertainment Inc. in an underlying employment injury dispute that settled does not preclude the equitable subrogation and breach of the duty of good faith and fair dealing lawsuit that the entertainment company's excess insurer brought against its primary insurer (Ace American Insurance Co. v. Fireman's Fund Insurance Co., No. B264861, Calif. App., 2nd Dist., Div. 4; 2016 Cal. App. LEXIS 647).
Panel: Contractual Liability Exclusion Bars Directors, Officers Liability Coverage
SEATTLE - The Ninth Circuit U.S. Court of Appeals on Aug. 3 affirmed a lower federal court's ruling that a directors and officers liability insurer has no duty to defend its insured against an underlying lawsuit arising from the insured's termination of a technology license agreement (TLA), finding that coverage is barred by the policy's contractual liability exclusion (X2 Biosystems Inc. v. Federal Insurance Co., No. 14-35125, 9th Cir.; 2016 U.S. App. LEXIS 14153).
Federal Judge Dismisses Directors, Officers Liability Insurance Dispute
LOS ANGELES - A California federal judge on June 24 dismissed with prejudice a nonprofit mutual-benefit corporation insured's breach of contract and bad faith lawsuit against its directors and officers liability insurer the same day the parties filed a joint motion to dismiss (Market Lofts Community Association v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 15-03093, C.D. Calif.).
Court Did Not Consider Whether Parties Were Properly Aligned, Panel Says, Reverses
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Aug. 3 held that a lower federal court failed to consider whether parties were properly aligned in a dispute over whether an insurer owes an additional $1 million to $3 million to satisfy an underlying $3,736,278 judgment against its insured for breaching its duty to exercise ordinary care to maintain its common areas (Evanston Insurance Company v. Housing Authority of Somerset and Griffin, et al., No. 16-5018, 6th Cir.; 2016 U.S. App. LEXIS 14465).
Judge Denies Summary Judgment Motions In Suit Over Bank's $1.8M Embezzlement Loss
SHREVEPORT, La. - A Louisiana federal judge on Aug. 1 denied summary judgment motions in a dispute over coverage under a financial institution bond for a bank's alleged $1,796,156.20 in losses stemming from its former vice president's embezzlement scheme (Everest National Insurance Co. v. Tri-State Bancshares Inc., et al., No. 15-1491, W.D. La.; 2016 U.S. Dist. LEXIS 104534).
Insurer Has No Duty To Remit $398,243.77 In Garnished Funds, Panel Say, Reverses
DENVER - A Colorado appeals panel on July 28 reversed a lower court's judgment ordering an insurer to remit garnished funds to satisfy an underlying $398,243.77 judgment against its insured, finding that professional liability coverage is barred because a negligence claim against the insured is not independent of the misappropriation of escrow funds by the insured's employee (Stewart Title Guaranty v. RSUI Group, No. 15CA0635, Colo. App.).
Panel Grants Dismissal Of Pharmaceutical Distributor's Claims Against 3 Insurers
ATLANTA - The 11th Circuit U.S. Court of Appeals on July 26 granted motions by a pharmaceutical distributor insured and three of its five insurers to dismiss the insured's appeal of a lower court's finding that the insurers have no duty to defend or indemnify against the State of West Virginia's lawsuit seeking to recover billions in damages for the state's prescription pharmaceutical drug abuse epidemic (The Travelers Property Casualty Company of America, et al. v. Anda Inc. and Watson Pharmaceuticals Inc., No. 15-11510-B, 11th Cir.).
Judge Certifies Class In Hailstorm Coverage Suit Challenging Insurance Practices
KANSAS CITY, Mo. - A Missouri federal judge on Aug. 1 granted insureds' motion to certify a class in a lawsuit alleging that their homeowners insurer unlawfully applied a policy's $1,000 deductible to an actual cash value (ACV) payment in a hailstorm coverage dispute (Eric Lafollette v. Liberty Mutual Fire Insurance Co., No. 14-04147, W.D. Mo.; 2016 U.S. Dist. LEXIS 99980).
Judge: Insurer Did Not Act In Bad Faith In Denying Coverage Under Policy
SALT LAKE CITY - Voluntary dismissal of a counterclaim seeking declaration that an insurer had no duty to defend or indemnify policy holders in an underlying lawsuit is proper, a federal judge Utah ruled Aug. 1, because the insurer owed its insured no coverage under the terms of a financial services liability insurance policy and, thus, could not have acted in bad faith (James Morden, et al. v. XL Specialty Insurance Co., No. 14-0224, D. Utah; 2016 U.S. Dist. LEXIS 100546).
Brokers Seek To Dismiss Foo Fighters' Breach Of Contract Suit Over Canceled Shows
LOS ANGELES - Insurance brokers on Aug. 8 moved a California federal court to dismiss Foo Fighters LLC's breach of contract lawsuit seeking full policy benefits for 11 shows that were canceled in the wake of the terrorist attacks in Paris and an injury singer and guitarist Dave Grohl suffered during a performance (Foo Fighters LLC v. Certain Underwriters at Lloyd's London, et al., No. 16-cv-04208, C.D. Calif.).