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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®



 



Prior Acts Exclusion Bars Coverage For Fraudulent Transfer Claims, Panel Affirms
ATLANTA - The 11th Circuit U.S. Court of Appeals on May 16 held that a directors and officers liability insurance policy's prior acts exclusion bars coverage for an underlying $15 million settlement arising from claims that a financial corporation's former executive officers breached their fiduciary duties (Clifford Zucker v. U.S. Specialty Insurance Co., 11th Cir., 15-10987, 2017 U.S. App. LEXIS 8585).



8th Circuit Affirms Dismissal Of Class Action Challenging Insurance Practices
ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on May 11 affirmed a lower federal court's dismissal of a class action alleging that an insurer sold policies with benefits below the statutory minimum required by Minnesota law (Andrea L. Dammann, et al. v. Progressive Direct Insurance Co., No. 16-3591, 8th Cir., 2017 U.S. App. LEXIS 8340).



5th Circuit Reverses Order That Certified Fraud Class In Insurance Practices Dispute
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on May 9 remanded a lower federal court's certification order as to contract and statutory claims and reversed the certification order as to the fraud claim in a class action lawsuit challenging an insurer's practices in determining the value of totaled vehicles (Cheryl Slade v. Progressive Security Insurance Co., No. 15-30010, 5th Cir., 2017 U.S. App. LEXIS 8229).



Panel: Claims Seeking Coverage For Alleged Bullying, Harassment Are Timely
CHICAGO - An Illinois panel on May 10 held that insureds' counterclaim and third-party complaint against a homeowners insurer and an insurance agent are timely in a coverage dispute arising from underlying bullying and harassment claims, reversing a lower court (American Family Mutual Insurance Co. v. Walter Krop, et al., No. 1-16-1071, Ill. App., 1st Dist., 3rd Div., 2017 Ill. App. LEXIS 310).



9th Circuit Partly Reverses Ruling In Coverage Dispute Over Intellectual Property
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 9 affirmed in part, reversed in part and remanded a coverage dispute arising from an underlying lawsuit alleging that insureds breached an intellectual property agreement and committed trade libel and tortious inducement to breach of contract (The Burlington Insurance Co. v. Minadora Holdings, LLC, et al., Nos. 15-55702 and 15-56657, 9th Cir., 2017 U.S. App. LEXIS 8232).



Judge Partly Grants Motion To Compel Discovery In Dispute Over Employee Fraud
CINCINNATI - An Ohio federal judge on May 9 granted in part insurers' motion to compel discovery in a dispute over fidelity bond coverage for the alleged fraudulent conduct of a bank insured's former loan officer (Fifth Third Bancorp, et al. v. Certain Underwriters at Lloyd's, et al., No. 14-869, S.D. Ohio, 2017 U.S. Dist. LEXIS 70639).



Federal Judge Refuses To Dismiss, Stay Legal Malpractice Coverage Dispute
WICHITA, Kan. - A Kansas federal judge on May 3 denied a law firm insured's motion to dismiss or stay an insurer's declaratory judgment lawsuit disputing coverage for a lawsuit brought by a bankruptcy trustee representing former clients of the insured (The Bar Plan Mutual Insurance Co. v. Christopher W. O'Brien, et al., No. 17-1037, D. Kan., 2017 U.S. Dist. LEXIS 67655).



Judge Grants Insureds' Motion To Stay Professional Liability Coverage Dispute
SAN DIEGO - A California federal judge on May 5 granted insureds' motion to stay a professional liability coverage dispute pending resolution of an underlying lawsuit alleging that they committed fraudulent conduct in managing a 40-unit mixed-use condominium complex in San Diego (Admiral Insurance Co. v. Urban Housing Partners, Inc., et al., No.: 16-2720, S.D. Calif., 2017 U.S. Dist. LEXIS 69303).



Insurer Has No Duty To Defend Suit Arising From Overturned Murder Conviction
BROOKLYN, N.Y. - A New York appeals panel on May 3 affirmed a lower court's ruling that an insurer has no duty to defend or indemnify its insured against an underlying lawsuit arising from an overturned murder conviction (County of Dutchess, et al. v Argonaut Insurance Co., also known as Argonaut Group, No. 2015-01594, N.Y. Sup., App. Div., 2nd Dept., 2017 N.Y. App. Div. LEXIS 3413).



Insurer Acted Vexatiously, Unreasonably In Denying Coverage, Illinois Panel Affirms
ELGIN, Ill. - An Illinois appeals panel on May 11 affirmed a lower court's ruling that held that an insurer acted vexatiously and unreasonably in failing to defend its pet motel insured against an underlying negligence lawsuit that resulted in a $45,000 consent judgment (Sabas Soto v. Country Mutual Insurance Co., et al., No. 2-16-0720, Ill. App., 2nd Dist., 2017 Ill. App. Unpub. LEXIS 943).



Right To Public Education Is Intangible; No Coverage For Lawsuit Against Teacher
DENVER - The 10th Circuit U.S. Court of Appeals on May 3 affirmed a lower federal court's finding that an underlying lawsuit alleging that a high school mathematics teacher engaged in inappropriate communications with one of his female students fails to trigger "bodily injury" or "property damage" under his homeowners insurance policy (State Farm Fire and Casualty Co. v. Charles Dawson, et al., No. 16-6356, 10th Cir., 2017 U.S. App. LEXIS 7836).



Federal Judge Allows Products Liability Coverage Dispute To Proceed
SPOKANE, Wash. - A Washington federal judge on May 8 refused to dismiss or alternatively stay an insurer's declaratory judgment lawsuit disputing coverage for an underlying products liability lawsuit (Atlantic Casualty Insurance Co. v. Brad Bellinger, et al., No. 16-00422, E.D. Wash., 2017 U.S. Dist. LEXIS 70082).



Panel Affirms Ruling In Insurer's Favor In Copyright Infringement Coverage Suit
ATLANTA - The 11th Circuit U.S. Court of Appeals on May 2 affirmed a lower federal court's ruling in favor of an insurer in coverage dispute arising from underlying copyright infringement claims, finding that the insured failed to connect its construction of copyright-infringing homes to its advertising (Highlands Holdings Inc. v. Mid-Continent Casualty Co., No. 16-14981, 11th Cir., 2017 U.S. App. LEXIS 7724).



Complaint Alleged Damage To Tangible, Physical Property, Panel Says In Reversal
WAUSAU, Wis. - Reversing and remanding a lower court's ruling in favor of an insurer, a Wisconsin appeals panel held May 2 that the complaint arguably alleged damage to both tangible, physical property, which is covered under a commercial general liability insurance policy, and the intangible electronic data stored on video tapes (Country World Media Group, Inc. v. Erie Insurance Co., et al., No. 2016AP1343, Wis. App., Dist. 3, 2017 Wisc. App. LEXIS 312).



New York Panel: Fact Issues Exist As To Whether Insurer Timely Disclaimed Coverage
BROOKLYN, N.Y. - A New York appeals panel on May 3 affirmed a lower court's denial of an insurer's cross-motion for summary judgment in a dispute over coverage for an underlying indemnification lawsuit brought against its insured by the state of New York (Evanston Insurance Co. v. P.S. Bruckel, Inc., et al., No. 2015-02584, N.Y. Sup., App. Div., 2nd Dept., 2017 N.Y. App. Div. LEXIS 3426).



Insured May Be Able To Recover Against Adjuster In Bad Faith Suit, Judge Rules
DALLAS - A federal judge in Texas on May 10 ruled that remand of an insurance breach of contract and bad faith lawsuit to state court is warranted because an insured has shown that it may recover against the adjuster for failing to offer a fair settlement on a commercial property insurance claim (Arlington Heights Memorial Post No. 8234 Veterans Of Foreign Wars of the United States, Fort Worth, Texas, v. Covington Specialty Insurance Co., et al., No. 16-3112, N.D. Texas, 2017 U.S. Dist. LEXIS 71125).



N.J. Panel: Broker Had No Duty To Provide Quotes For Higher Policy Limits
TRENTON, N.J. - A New Jersey panel on May 1 rejected a tool manufacturer insured's argument that its insurance broker breached a duty to provide additional flood quotes for its Harrison, N.J., commercial facilities, affirming a lower court's ruling in favor of the broker in a dispute arising from Superstorm Sandy flood damage (C.S. Osborne & Co., Inc. v. The Charter Oak Fire Insurance Co., et al., No. A-2182-15T4, N.J. Super., App. Div., 2017 N.J. Super. Unpub. LEXIS 1051).



In Remanded False Claims Act Suit, Discovery Limited To Identified Properties
GULFPORT, Miss. - In a case concerning an insurer's False Claims Act (FCA) violations on Hurricane Katrina claims, a Mississippi federal judge on April 12 granted the parties' motions to reopen the case, which was remanded after a U.S. Supreme Court ruling, limiting initial discovery on those purported violations to properties previously identified in a list provided by the insurer (United States, ex rel. Cori Rigsby, et al. v. State Farm Fire & Casualty Co., No. 1:06-cv-00433, S.D. Miss.).



Malicious Prosecution Was Not Committed During Policy Period, Excess Insurer Says
CINCINNATI - An excess insurer has asked the Sixth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling that ordered it to reimburse the $3.25 million a second excess insurer contributed to an underlying settlement of a malicious prosecution lawsuit against the city of Barberton, Ohio, and its police officers (Selective Ins. Co. v. RLI Ins. Co., 16-4199, 6th Cir.).



Complaint Fails To Allege Disparagement Claim; No Coverage, Illinois Panel Affirms
CHICAGO - An Illinois appeals panel on May 1 held that an underlying complaint did not contain allegations sufficient to constitute a claim of disparagement against an insured, affirming a lower court's ruling that the insurer has no duty to defend because coverage was not triggered (Green4all Energy Solutions, Inc. v. State Farm Insurance Co., No. 1-16-2499, Ill. App., 1st Dist., 1st Div., 2017 Ill. App. Unpub. LEXIS 874).



Judge: Evidence Supports Finding That Thief Was Not Insured's Employee
RICHMOND, Va. - A Virginia federal judge on May 1 held that a hotel owner insured has failed to present evidence that defeats an insurer's motion for summary judgment in a breach of contract lawsuit arising from an underlying theft committed by a subcontractor (GRM Management LLC, et al. v. The Cincinnati Insurance Co., No. 16-574, E.D. Va., 2017 U.S. Dist. LEXIS 66249).



Prior Knowledge, Prior Litigation Exclusions Bar Coverage, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 28 affirmed a lower federal court's finding that a business and management insurance policy's prior knowledge and prior litigation exclusions bars coverage for an underlying lawsuit against management insureds (Douglas Woo, et al. v. Scottsdale Insurance Co., No. 14-56992, 9th Cir., 2017 U.S. App. LEXIS 7616).



New York Justice Rules Against Insurers In Dispute Over Bear Stearns' Settlement
NEW YORK - A New York justice on April 17 ruled against insurers in a lawsuit seeking indemnification from them for claims stemming from Bear Stearns' settlement of Securities and Exchange Commission and New York Stock Exchange (NYSE) regulatory proceedings and private litigation over claims that it facilitated customers' deceptive market timing and late trading activities (J.P. Morgan Securities, et al. v. Vigilant Insurance, et al., No. 600979/2009, N.Y. Sup., New York Co., 2017 N.Y. Misc. LEXIS 1381).



Magistrate: Protective Order Not Warranted In Directors, Officers Coverage Dispute
TRENTON, N.J. - A New Jersey federal magistrate judge on April 17 denied an insured's motion for a protective order seeking to strike a subpoena's document request for "irrelevant and privileged" material from nonparty Wells Fargo Insurance Services USA Inc. in a directors and officers liability coverage dispute (Benecard Services Inc. v. Allied World Specialty Insurance Co., et al., No. 15-8593, D. N.J., 2017 U.S. Dist. LEXIS 57940).



Insurer Owes Insured For Prejudgment Interest, Some Attorney Fees, 9th Circuit Says
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 27 ruled that a business liability insurer has a duty to indemnify its insured for prejudgment interest on underlying damages for breach of contract and underlying attorney fees and costs attributable to California Labor Code claims brought by a former employee, reversing and vacating in part and remanding for further proceedings (Michael Feiz Medical Corp. v. Scottsdale Insurance Co., No. 15-56652, 9th Cir., 2017 U.S. App. LEXIS 7495).



Panel Reverses Ruling In Insurer's Favor In Dispute Over Damaged Scallops
BOSTON - A Massachusetts appeals panel held on April 26 that a seafood-processing facility insured has a reasonable expectation of proving that unexplained damage to scallops was caused by an occurrence pursuant to a commercial general liability insurance policy, reversing and remanding a lower court's ruling in favor of the insurer (The Hanover Insurance Group, Inc. vs. Raw Seafoods, Inc., No. 15-1554, Mass. App., 2017 Mass. App. LEXIS 49).



Investment Solicitation Falls Outside Policy's Definition Of 'Professional Services'
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 25 found that an investment solicitation by an insured fell outside a professional liability insurance policy's definition of covered "professional services," affirming a lower court's summary judgment ruling in favor of the insurer (Continental Casualty Co. v. Kool Radiators Inc., No. 15-16023, 9th Cir.).



Judge Certifies Class In Dispute Over Application Of Deductible In Hailstorm Loss
JEFFERSON CITY, Mo. - A Missouri federal judge on May 1 granted insureds' motion for class certification in a dispute over whether a homeowners insurer should have applied a deductible to the actual cash value (ACV) payment it issued the insureds for their hail damage loss (David Bond, et al. v. Liberty Insurance Corp., No. 15-04236, W.D. Mo., 2017 U.S. Dist. LEXIS 65701).



Insured Waived Appeal Of Dismissal Of Unfair Competition Claim, 9th Circuit Says
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 25 affirmed a lower federal court's ruling in favor of a homeowners insurer in its insured's lawsuit alleging violations under the Fair Credit Reporting Act (FCRA) and California's unfair competition law (UCL) (Kamlesh Banga v. Allstate Insurance Co., No. 14-17147, 9th Cir., 2017 U.S. App. LEXIS 7284).



Insurer Did Not Impermissibly Depreciate Labor Costs, 10th Circuit Affirms
DENVER - The 10th Circuit U.S. Court of Appeals on April 21 affirmed a lower federal court's finding that a homeowners insurer did not violate its policy when it depreciated labor costs in determining the actual cash value of an insured's loss following hail and water damage (Margaret Graves v. American Family Mutual Insurance Co., No. 15-3187, 10th Cir., 2017 U.S. App. LEXIS 6980).



Business Pursuits Exclusion Bars Coverage For Injury, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 20 affirmed a lower federal court's ruling in favor of an insurer in a coverage dispute arising from an underlying injury claim by a day laborer (Barbara Kellerer v. Allied Property and Casualty Insurance Co., No. 15-56653, 9th Cir., 2017 U.S. App. LEXIS 6903).



Business Pursuits Exclusion Bars Coverage For Defamation Lawsuit, Judge Rules
EAST ST. LOUIS, Ill. - An Illinois federal judge on April 19 found that a homeowners insurance policy's "business pursuits" and "civic or public activities performed for pay" exclusions bar coverage for underlying defamation and false light claims brought against its insured, declaring that the insurer has no duty to defend or indemnify its insured (Patricia Beil v. AMCO Insurance Co., et al., No. 16-356, S.D. Ill., 2017 U.S. Dist. LEXIS 59757).



Panel: Professional Liability Insurer Is Equitably Estopped From Denying Coverage
DENVER - The 10th Circuit U.S. Court of Appeals held April 18 that an insurer is estopped from denying coverage under a professional liability insurance policy for an underlying arbitration brought against an investment advisor insured, affirming a lower court's $931,859.59 judgment in favor of the insured (Brecek & Young Advisors, Inc. v. Lloyds of London Syndicate 2003, No. 16-3245, 10th Cir., 2017 U.S. App. LEXIS 6585).



Federal Judge Allows 2 Of 3 Claims To Proceed In Coverage Dispute Between Insurers
PORTLAND, Maine - A Maine federal judge on April 18 granted a professional liability insurer's motion to dismiss an equitable contribution claim brought by another insurer but allowed the claims for reapportionment/contribution by agreement and equitable subrogation to proceed in a coverage dispute arising from an underlying personal injury action against a podiatrist insured (MMG Insurance Co. v. Podiatry Insurance Company of America, No. 16-00605, D. Maine, 2017 U.S. Dist. LEXIS 58695).



Majority: Settlement Agreement Did Not Trigger Excess Insurer's Duty To Defend
BOSTON - A majority of the First Circuit U.S. Court of Appeals held April 26 that the widow of a man killed after falling bricks knocked him off a ladder failed to present a plausible argument that an underlying settlement agreement in a wrongful death lawsuit triggered an excess insurer's duty to defend (Lucia Salvati, et al. v. The American Insurance Co., No. 16-1403, 1st Cir., 2017 U.S. App. LEXIS 7366).



Federal Judge Dismisses Coverage Suit Over Sexual Abuse Claims Against Priest
MINNEAPOLIS - A Minnesota federal judge on April 25 entered judgment denying a religious order insured's motion to remand a coverage dispute over sexual abuse claims against a priest and dismissing the lawsuit without prejudice under the doctrine of collateral estoppel (The Order of St. Benedict v. St. Paul Mercury Insurance Company, et al., No. 17-781, D. Minn., 2017 U.S. Dist. LEXIS 63175).



Insurer Intervenes In Suit Alleging Sexual Assault By Rutgers Football Player
TRENTON, N.J. - A homeowners insurer filed a declaratory judgment complaint in federal court in New Jersey on April 21 after intervening in a lawsuit alleging that two Rutgers University students, including one football player, sexually assault another student on campus (K.L. v. Rutgers, The State University of New Jersey, et al., No. 16-9270, D. N.J.).



Assault And Battery Policy Exclusion Bars Coverage, New York Panel Affirms
ALBANY, N.Y. - A New York appeals court on April 27 affirmed a lower court's ruling that an insurance policy's assault and battery exclusion bars coverage for an underlying personal injury lawsuit brought against its insured (Graytwig Inc., d/b/a The Red Jug Pub v. Dryden Mutual Insurance Co., et al., No. 522992, N.Y. Sup., App. Div., 3rd Dept., 2017 N.Y. App. Div. LEXIS 3188).



Justice Refuses To Dismiss Insurer's Suit Seeking Recovery For Bodily Injury Suit
NEW YORK - A New York justice on April 19 denied one insurer's motion to dismiss another insurer's lawsuit seeking recovery of the $1 million it paid to settle an underlying personal injury action (Old Republic Insurance Company, directly and as Subrogee of STS Steel, Inc., v. United National Insurance Co., No. 155995/2012, N.Y. Sup., New York Co., 2017 N.Y. Misc. LEXIS 1476).



Judge Refuses To Revisit Ruling In Coverage Dispute Over $2.6M In Punitives
PHILADELPHIA - A Pennsylvania judge on March 21 rejected the appeal of a Jan. 20 ruling that a commercial umbrella liability insurer has no duty to indemnify its insured against $2.6 million in punitive damages that it paid to settle an underlying wrongful death and survival action (Bensalem Racing Association, Inc., et al. v. Ace Property and Casualty Insurance Co., No. 4858, Pa. Comm. Pls., Philadelphia Co.).



Complaint Against Insurance Brokerages, Agent Is Untimely, Illinois Panel Affirms
OTTAWA, Ill. - An Illinois appeals panel on April 19 affirmed a lower court's finding that a negligence and breach of contract lawsuit against insurance brokerages and an agent is untimely (RVP, LLC, et al. v. Advantage Insurance Services, Inc., et al., No. 3-16-0276, Ill. App., 3rd Dist., 2017 Ill. App. Unpub. LEXIS 831).



New Hampshire Supreme Court Partly Vacates Ruling In Broker Liability Dispute
CONCORD, N.H. - The New Hampshire Supreme Court on Feb. 23 affirmed in part, vacated in part and remanded a lower court's summary judgment ruling in favor of defendants in a negligent procurement and breach of contract lawsuit (Michael Askenaizer, as trustee of Chapter 7 Estate of Focus Capital, Inc. v. Foy Insurance Group, Inc., No. 2016-0389, N.H. Sup., 2017 N.H. LEXIS 52).



Enforceability Of Consent To Settle Clause In Excess Insurance Policies
By Robert M. Hall I. Introduction Excess insurance policies commonly contain clauses which: (a) prohibit the insured from voluntarily making a payment or incurring an obligation without the insurer's consent; or (b) state that no action shall be taken against the insurer for a recovery unless the insurer has agreed to such recovery or it has been determined by trial and final judgment (hereinafter collectively called "Consent to Settle"). The purpose of such clauses is to allow the insurer to maintain control of the dispute resolution process and prevent the insured from committing the insurer to payment of claims that the insurer wishes to contest. The purpose of this article is to explore selected case law that enforces such clauses as well as case law with subordinates such policy language to certain public policy interests.



Federal Judge Rules In Insurer's Favor In Coverage Dispute With Zillow Inc.
SEATTLE - A Washington federal judge on April 17 entered judgment in favor of an insurer three days after granting its motion for judgment on the pleadings in its lawsuit disputing coverage for underlying direct infringement, contributory infringement and vicarious liability claims brought against its insured Zillow Inc. (National Union Fire Insurance Co. v. Zillow, Inc., No.16-1461, W.D. Wash., 2017 U.S. Dist. LEXIS 57496).



No Coverage For False Advertising Claims Against Insured, 6th Circuit Affirms
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on April 11 affirmed a lower federal court's ruling that a business liability policy does not provide coverage for false advertising claims brought against an eye health supplement maker insured by a competitor, finding that the insured failed to demonstrate that the underlying complaint alleged a product disparagement claim (Vitamin Health, Inc. v. Hartford Casualty Insurance Co., No.16-1724, 6th Cir.).



8th Circuit Finds Settlement Agreement For Defect Claims Violated Cooperation Clause
ST. LOUIS - A settlement agreement between an association and an insured general contractor over allegations of defective construction violated an insurance policy's cooperation clause and, thus, is unenforceable, the Eighth Circuit U.S. Court of Appeals affirmed April 17 (James River Insurance Co. v. The Interlachen Propertyowners Association and Kuepers Construction Inc., No. 16-2994, 8th Cir.).



Professional Liability Insurer Fails To Show It Was Prejudiced By Delayed Notice
DENVER - A Colorado federal judge held April 13 that a professional liability insurer has failed to sufficiently demonstrate that it was prejudiced by a hospital insured's delayed notice of an underlying medical malpractice dispute (Children's Hospital Colorado v. Lexington Insurance Co., No. 15-01904, D. Colo., 2017 U.S. Dist. LEXIS 56892).



Judge: Professional Liability Insurer Owes No Coverage For Legal Malpractice Claim
CLEVELAND - An Ohio federal judge on April 13 found that a professional liability insurer has no duty to defend or indemnify its lawyer insured against a legal malpractice lawsuit (Spiros E. Gonakis, Sr. v. Medmarc Casualty Insurance Co., No. 16-2042, N.D. Ohio, 2017 U.S. Dist. LEXIS 56789).



Federal Judge Grants Voluntary Dismissal Of Professional Liability Coverage Row
NEWARK, N.J. - A New Jersey federal judge on April 5 granted a stipulation of voluntary dismissal of an insured's lawsuit seeking defense and indemnification from its professional liability insurer for an underlying legal malpractice action (Nagel Rice, LLP v. Allied World Insurance Co., No. 16-3888, D. N.J.).



4th Circuit: Insured's Faulty Design Of Student Housing Foundation Is Covered
RICHMOND, Va. - A professional liability insurance policy provided coverage for a general contractor's liability for defective design of a building's foundation, which resulted in the contractor becoming responsible to pay $1.77 million as part of the costs to repair, the Fourth Circuit U.S. Court of Appeals held April 4, affirming summary judgment on an insured's breach of contract counterclaim (Westchester Surplus Lines Insurance Co. v. Clancy & Theys Construction Co., Nos. 15-2299 & 15-2373, 4th Cir., 2017 U.S. App. LEXIS 5796).



Law Firm, Insurer Argue In 9th Circuit Whether 7 Suits Constitute 1 Claim
SAN FRANCISCO - In briefs filed before the Ninth Circuit U.S. Court of Appeals, a law firm and its former insurer dispute whether seven real estate investment fraud lawsuits brought against the firm should be considered one claim for coverage purposes under professional liability policies (Liberty Insurance Underwriters Inc. v. Davies Lemmis Raphaely Law Corp., et al., No. 16-55711, 9th Cir.).



No Claim For Wrongful Act; No Coverage, Insurer Argues To Federal Court
TULSA, Okla. - An insurer recently argued to an Oklahoma federal court that an underlying breach of contract lawsuit brought against its insured by a former business partner fails to allege a wrongful act to trigger coverage under a professional liability insurance policy (Doug Schwegman, d/b/a Schwegman Insurance and Financial Services v. Continental Casualty Co., No. 16-0730, N.D. Okla.).



Forty Niners' Insurer Appeals Ruling Ordering It To Equally Contribute To Defense
PASADENA, Calif. - The San Francisco Forty Niners Football Co.'s primary commercial general liability insurer on April 12 filed a notice of appeal in the Ninth Circuit U.S. Court of Appeals challenging a lower federal court's finding that it has duty to contribute by equal shares with another insurer to defense costs in an underlying lawsuit against the football team and others (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 17-1511, 9th Cir.).



In Remanded False Claims Act Suit, Discovery Limited To Identified Properties
GULFPORT, Miss. - In a case concerning an insurer's False Claims Act (FCA) violations on Hurricane Katrina claims, a Mississippi federal judge on April 12 granted the parties' motions to reopen the case, which was remanded after a U.S. Supreme Court ruling, limiting initial discovery on those purported violations to properties previously identified in a list provided by the insurer (United States, ex rel. Cori Rigsby, et al. v. State Farm Fire & Casualty Co., No. 1:06-cv-00433, S.D. Miss.).



Panel: Insurer Breached Duty To Defend Claims Of Suspicious 'Flip' Transactions
CHICAGO - The Seventh Circuit U.S. Court of Appeals on April 10 found that an errors and omissions liability insurer has a duty to defend against underlying claims that its title insurance agency insured executed real estate "flip" transactions "contrary to the spirit and purpose" of its agency contract (Title Industry Assurance Co. v. First American Title Ins. Co., et al., No. 15-3310, 7th Cir., 2017 U.S. App. LEXIS 6092).



Judge Finds In Insured's Favor In Coverage Dispute Over Its Employee's Claims
SANTA ANA, Calif. - A California federal judge on April 10 granted an insured's motion for summary judgment in a declaratory judgment lawsuit arising from underlying claims for malicious prosecution and defamation brought by the insured's employee (KPC Healthcare, Inc. v. Hudson Specialty Ins. Co., No. 16-01483, C.D. Calif., 2017 U.S. Dist. LEXIS 55443).



Completed-Work Exclusion Does Not Bar Coverage, 11th Circuit Affirms
ATLANTA - The 11th Circuit U.S. Court of Appeals on April 4 affirmed a lower federal court's finding that an insurance policy's completed-work exclusion does not preclude the insured from coverage for an underlying lawsuit arising from an accident at a railroad crossing, concluding that the lawsuit is another "classic case of the insurer requesting relief from the consequences of the inartfully drafted, yet plain, terms of its insurance policy" (Liberty Surplus Insurance Corp. v. Norfolk Southern Railway Co., No. 16-14767, 11th Cir., 2017 U.S. App. LEXIS 5763).



Judge: Insurer Must Contribute $2.6M To Settlement Arising From Molestation Claims
SAN FRANCISCO - A California federal judge on April 7 held that an insurer must contribute $2.6 million to the $15.8 million that another insurer paid to settle underlying negligent supervision claims against a California school district and three of its administrators arising from allegations that a teacher sexually molested three students (Westport Insurance Corp. v. California Casualty Management Co., No. 16-01246, N.D. Calif., 2017 U.S. Dist. LEXIS 53903).



Judge: Insurer Has No Duty To Defend, Indemnify Suits Over Contaminated Medication
SOUTH BEND, Ind. - An Indiana federal judge on March 31 entered a judgment in favor of an insurer, declaring that it has no duty to defend or indemnify its insureds against underlying lawsuits and medical malpractice complaints stemming from a multistate outbreak of fungal meningitis, lumbar fungal infections and related injuries as a result of patients receiving injections of contaminated epidural steroid medication for pain management (Westfield Insurance Co v. Orthopedic and Sports Medicine Center of Northern Indiana, Inc., et al., No. 14-1548, N.D. Ind., 2017 U.S. Dist. LEXIS 46119).



Court Erred In Finding Parties Were Properly Aligned, Appellants Argue To 6th Circuit
CINCINNATI - Appellants have asked the Sixth Circuit U.S. Court of Appeals to reverse a lower federal court's finding that parties were properly aligned in a dispute over whether additional coverage is owed to satisfy an underlying $3,736,278 judgment against an insured for breaching its duty to exercise ordinary care to maintain its common areas (Evanston Ins Co. v. Housing Authority of Somerset, 16-6691, 6th Cir.).



Majority Affirms Idaho Law Applies, Bars Coverage For Claims Arising From Injury
SEATTLE - A majority of the Ninth Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court's ruling that Idaho law applies to bar coverage for claims arising from an eye injury (Gary Butler v. North American Capacity Insurance Co., et al., No. 14-35131, 9th Cir., 2017 U.S. App. LEXIS 6465).



Additional Insured's Coverage Limited To Vicarious Liability For Insured's Acts
CHARLESTON, S.C. - A South Carolina federal judge on April 14 denied an electric and gas company's motion for partial summary judgment in its lawsuit seeking defense as an additional insured under a commercial general liability insurance policy for two underlying personal injury lawsuits (South Carolina Electric and Gas Co. v. Old Republic Insurance Co., et al., No. 16-2468, D. S.C., 2017 U.S. Dist. LEXIS 57261).



Judge Rules On Indemnity, Coverage Issues In Dispute Arising From FELA Suit
EAST ST. LOUIS, Ill. - An Illinois federal judge on March 29 ruled on dueling summary judgment motions in a lawsuit arising from a railway company's losses incurred in an underlying lawsuit brought by a former employee under the Federal Employers Liability Act (FELA) (BNSF Ry. v. Gilster-Mary Lee Corp., et al., No. 15-250, S.D. Ill., 2017 U.S. Dist. LEXIS 46894).



Broker Failed To State A Negligent Misrepresentation Claim, Illinois Panel Rules
ELGIN, Ill. - An Illinois appeals panel on April 3 held that an insurance broker failed to state a claim for negligent misrepresentation against an insurer, further finding that the broker's professional negligence claim required expert testimony to establish the standard of care applicable between an insurer and a broker (Loomcraft Textile & Supply Co. v. Schwartz Brothers Insurance Agency, Inc., et al., No. 16-0557, Ill. App., 2nd Dist., 2017 Ill. App. Unpub. LEXIS 713).



New Mexico Federal Judge Says Bad Faith, Breach Of Contract Claims Can Stand
ALBUQUERQUE, N.M. - A New Mexico federal judge on March 29 denied a motion for partial judgment on the pleadings filed by insurers in a hail damage and theft coverage dispute after determining that the insured alleged sufficient facts in support of claims for breach of contract and bad faith (Sedillo Electric, et al. v. Colorado Casualty Insurance Co., et al., Nos. 15-1172, 16-43, D. N.M., 2017 U.S. Dist. LEXIS 46442).



Loss Of Boats Was Not Theft, Judge Finds In Ruling For Insurer
FRESNO, Calif. - An insurer did not breach a boat business' all-risk policy in bad faith by denying coverage for a theft claim because the evidence at trial showed that the loss of the business' boat inventory was not the result of theft but rather a family's asset transfer scheme gone awry, a California federal judge held March 31 (Pacific Marine Center, Inc. v. Philadelphia Indemnity Insurance Company, No. 1:13-cv-00992, E.D. Calif., 2017 U.S. Dist. LEXIS 49637).



Federal Law Does Not Apply To State Law Procurement Claims, Insureds Tell 5th Circuit
NEW ORLEANS - Insureds have asked the Fifth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling in favor of an insurer and the United States of America in a lawsuit arising from the insurer's cancellation of a federal flood insurance policy following Hurricane Ike (Robert Spong and Kerry Spong v. Fidelity National Property and Casualty Insurance Co., et al., No. 16-41165, 5th Cir.).