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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®



 



Federal Judge Orders Insurer To Pay $996,840 To Satisfy Medical Malpractice Judgment
GREENBELT, Md.- A Maryland federal judge on April 17 declared that a professional liability insurer is obligated to pay $996,840.50 plus post-judgment interest for an outstanding underlying judgment arising from a medical malpractice/wrongful death lawsuit against its insureds (Claudia M. Mora, et al. v. Lancet Indemnity Risk Retention Group, Inc., No. 16-960, D. Md., 2018 U.S. Dist. LEXIS 64136).



Colorado Panel: Excess Insurer's Equitable Subrogation Claim Not Legally Viable
DENVER - A Colorado appeals panel on April 5 held that without an assertion that a primary insurer acted in bad faith in refusing to accept a $1 million settlement offer in an underlying malpractice suit, the excess insurer's equitable subrogation claim is not legally viable, reversing a lower court (Preferred Professional Insurance Co. v. The Doctors Company, No. 17-0405, Colo. App., Div. 4, 2018 Colo. App. LEXIS 507).



Security Services Were Professional In Nature, No Coverage Owed For Break-In
OAKLAND, Calif. - A California federal judge on April 10 held that a commercial general liability insurance policy's professional services exclusion bars coverage for underlying breach of contract and negligence claims against a security company insured arising from a break-in at a car dealership, finding that the security services the insured provided were professional in nature (The Burlington Insurance Company v. Bay One Security, Inc., et al., No. 17-04734, N.D. Calif., 2018 U.S. Dist. LEXIS 61700).



Judge: Insurer Owes No Defense, Indemnity For Sexual Abuse Claims Against Teacher
BIG STONE GAP, Va.- A Virginia federal judge on April 10 granted an insurer's motion for summary judgment in its lawsuit disputing educators employment liability insurance coverage for underlying claims that a fourth-grade teacher sexually abused a student in 1984 and 1985 (Horace Mann Insurance Company v. Judy Walton Barney, et al., No. 17-00016, W.D. Va., 2018 U.S. Dist. LEXIS 60318).



USA Gymnastics Sues Insurers In Indiana Court, Seeking Coverage For Nassar Suits
MARION, Ind. - On April 6, USA Gymnastics (USAG) sued seven of its insurers in Indiana court for breach of contract, seeking a declaration as to comprehensive general liability and directors and officers (D&O) coverage for underlying negligence lawsuits arising from the sexual abuse committed by the former doctor of the American gymnastics team Lawrence "Larry" Gerard Nassar (USA Gymnastics v. Ace American Insurance Co., et al., No. 49D011804PL013423, Ind. Super.).



Harvey Weinstein Seeks To Remove Insurers' Coverage Suit To Federal Court
NEW YORK - Harvey Weinstein on March 21 sought to remove to a federal court insurers' New York lawsuit seeking a declaration that they owe no coverage for 11 underlying lawsuits alleging that he committed intentional, egregious sexual predatory behavior that spanned at least 30 years (Federal Insurance Company, et al. v. Harvey Weinstein, No. 18-02526, S.D. N.Y.).



Insurer Appeals $945,265 Breach Of Contract Judgment, Discovery Ruling In 2nd Circuit
NEW YORK - An insurer recently asked the Second Circuit U.S. Court of Appeals to reverse 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 (The Hartford Roman Catholic Diocesan Corp. v. Interstate Fire & Casualty Company, Nos. 16-2999 and 17-2484, 2nd Cir.).



2nd Circuit Reverses Ruling In Coverage Dispute Over Fatal Construction Site Injury
NEW YORK - The Second Circuit U.S. Court of Appeals on April 4 reversed a lower court's ruling in favor of two business auto liability insurers in a dispute over coverage for an underlying fatal injury that occurred at a construction site, ruling that the court erred in finding that the mechanical device and employers liability exclusions relieved the insurers of their coverage obligations (Employers Insurance Company of Wausau v. Harleysville Preferred Insurance Co., et al., 16-906, 2nd Cir., 2018 U.S. App. LEXIS 8499).



No Coverage Afforded For Losses Incurred As A Result Of Madoff Ponzi Scheme
NEW HAVEN, Conn. - A Connecticut federal judge on April 10 dismissed an insured's claims for breach of contract and bad faith after determining that no coverage exists for the insured's losses arising out of the Bernard Madoff Ponzi scheme because Madoff's "wrongful entry" into the insured's investment account is not the type of "wrongful entry" covered under the homeowners policies at issue (Susan Kostin v. Pacific Indemnity Co., et al., No. 17-1320, D. Conn., 2018 U.S. Dist. LEXIS 60846).



5th Circuit Certifies Questions About Voluntary Payment To Mississippi High Court
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on April 16 certified two questions to the Mississippi Supreme Court regarding whether Mississippi's voluntary payment doctrine bars an insurer from recovering a settlement payment made on behalf of an additional insured when the insurer disputes that the additional insured was actually covered for the settlement under the applicable policy (Colony Insurance Co. v. First Specialty Insurance Corp., No. 17-60094, 5th Cir., 2018 U.S. App. LEXIS 9444).



Mobile Home Damage Was Not 'Sudden,' No Coverage Owed, 9th Circuit Affirms
SEATTLE - The Ninth Circuit U.S. Court of Appeals on April 11 held that the undisputed evidence demonstrates that the damage to an insured's mobile home developed over a period of up to a year or longer and was readily detectable, affirming a lower federal court's ruling that the damage was not "sudden" and is not covered under a comprehensive insurance policy (Benito Cervantes v. Foremost Insurance Company, 16-35315, 9th Cir., 2018 U.S. App. LEXIS 9059).



Insurer Has No Duty To Defend False Advertising Suit, 11th Circuit Affirms
ATLANTA - The 11th Circuit U.S. Court of Appeals on April 3 affirmed a lower court's finding that an insurer had no duty to defend or indemnify its insured in a false advertising lawsuit because coverage is barred by a policy exclusion and the insured failed to provide timely notice of the underlying action (Scott, Blane and Darren Recovery, LLC, et al. v. Auto-Owners Insurance Company, No. 17-12945, 11th Cir., 2018 U.S. App. LEXIS 8630).



Insurer Has No Duty To Defend FMU Against Negligence Suit Brought By Student Dancer
MIAMI - A Florida federal judge on April 9 entered judgment in favor of an insurer three days after finding that the "Sponsorship Exclusion" in an insurance policy endorsement bars coverage for all claims brought against Florida Memorial University (FMU) by a student and member of its dance team (Philadelphia Indemnity Insurance Company v. Florida Memorial University, et al., No. 17-21133, S.D. Fla., 2018 U.S. Dist. LEXIS 61528).



Justice Again Refuses To Dismiss Insurer's Suit Seeking $1M For Personal Injury Claim
NEW YORK - A New York justice on April 9 adhered to a prior decision that 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., 2018 N.Y. Misc. LEXIS 1338).



Judge: Insurer Is Not Barred From Litigating Applicability Of Knowledge Exclusion
LOUISVILLE, Ky. - A Kentucky federal judge on March 29 held that an insurer is not barred from seeking an independent determination as to whether its insured knowingly infringed on a competitor's trademarks but is precluded from seeking reimbursement of underlying defense costs (National Trust Insurance Company v. Heaven Hill Distilleries, Inc., No. 14-394, W.D. Ky., 2018 U.S. Dist. LEXIS 52569).



Insurer Appeals Denial Of Appeal Fees In Copyright Settlement Dispute
ATLANTA - An insurer recently appealed to the 11th Circuit U.S. Court of Appeals the denial of appellate fees in a dispute with its insured (Highland Holdings, Inc., v. Mid-Continent Casualty Company, No. 17-14455-AA, 11th Cir.).



Parties Dispute Whether Foreign Insurer Received Proper Notice Of Complaint
HELENA, Mont. - A reservation operations center and an insurer and brokers recently submitted arguments before the Montana Supreme Court, disputing whether the foreign insurer was properly served with a complaint and jury demand filed by the center in relation to a coverage dispute and whether a default ruling entered against the insurer should be vacated (Reservation Operations Center v. Scottsdale Insurance Company, et al., No. 17-0580, Mont. Sup.).



Insured Asks 6th Circuit To Find Policy Covers $306,808 Postjudgment Interest
CINCINNATI - An insured recently asked the Sixth Circuit U.S. Court of Appeals to a reverse a lower federal court's grant of summary judgment in favor of a commercial excess insurer in its breach of contract lawsuit seeking to recover $306,808.46 in post-judgment interest that was awarded against it in an underlying product liability dispute (Key Safety Systems Inc. v. AIG Specialty Insurance Co., 17-1934, 6th Cir.).



9th Circuit Rejects Investors' Argument That Excess Coverage Was Triggered
PASADENA, Calif. - The Ninth Circuit U.S Court of Appeals on March 30 held that under either New York or California law, excess coverage was not triggered in a coverage dispute arising from a breach of fiduciary class action brought against a bankrupt subprime mortgage company's officers and directors (Ruth Ann Wunderman-Cooper, et al. v. Certain Underwriters at Lloyd's London, No. 15-56671, 9th Cir., 2018 U.S. App. LEXIS 8127).



9th Circuit Refuses To Rehear D&O Coverage Dispute Over Federal Investigation
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on March 20 denied a health care organization insured's petition for a panel rehearing challenging its ruling in favor of a directors and officers liability insurer in a coverage dispute over an underlying investigation brought by the U.S. Department of Justice (DOJ) against the insured (Millennium Laboratories, Inc. v. Allied World Assurance Company [U.S.] Inc., No. 16-55432, 9th Cir.).



Insureds Oppose Insurers' Appeal In Directors, Officers Liability Insurance Dispute
WILMINGTON, Del. - Insureds on March 19 responded to directors and officers liability insurers' appeal of a Delaware judge's finding that state law and public policy do not explicitly prohibit directors and officers liability insurers from indemnifying insureds' alleged fraud, contending the judge's ruling is consistent with the holdings of the state's highest court (Arch Insurance Company, et al. v. David H. Murdock, et al., No. N16C-01-104-EMD, Del. Super., New Castle Co.).



Discrimination, Retaliation Claims Are Interrelated Wrongful Acts Under Policy
CHICAGO - An Illinois federal judge on March 30 held that an employment practices liability insurer has no duty to defend its insured against discrimination and retaliation claims because the claims are interrelated wrongful acts that are barred from coverage, further finding that the insured failed to provide timely notice of the initial discrimination claim (Twin City Fire Insurance Company v. Permatron Corporation, et al., No. 15-10252, N.D. Ill., 2018 U.S. Dist. LEXIS 55126).



Intentional Shooting At Campground Was Not Occurrence, Idaho High Court Affirms
BOISE, Idaho - The Idaho Supreme Court on March 30 found that an intentional shooting at the insureds' campground was not an "occurrence" under an insurance policy, affirming a lower court's ruling that the insurer has no duty to defend its insureds under the policy's bodily injury liability provision (Farm Bureau Mutual Insurance Company of Idaho v. Edgar Wilkins Cook Jr., et al., No. 44897, Idaho Sup., 2018 Ida. LEXIS 71).



Panel: Fact Issues Preclude Judgment In Coverage Dispute Over Stabbing Death
NEW ORLEANS - A majority of a Louisiana appeals panel on March 14 denied relief sought by a liability insurer in a coverage dispute arising from a stabbing death, finding that fact issues preclude a summary judgment ruling (Daphne Richardson Valteau v. First Mercury Insurance Company, et al., No. 2017-C-0889, La. App., 4th Cir., 2018 La. App. LEXIS 483).



Fortuity Doctrine Bars Professional Liability Coverage, 5th Circuit Affirms
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on March 26 affirmed a lower federal court's ruling that the fortuity doctrine excuses a professional liability insurer from defending and indemnifying its attorney insured against an underlying fraud lawsuit that resulted in an award of $680,000 in actual damages (Wesco Insurance Company v. Gwendolyn Gene Layton, et al., No. 17- 10362, 5th Cir., 2018 U.S. App. LEXIS 7557).



New York Justice Rules On Discovery In Professional Liability Coverage Dispute
NEW YORK - A New York justice on March 23 granted the branch of an insured's order to show cause to compel its professional liability insurer to produce copies of unredacted claims notes that were made during a particular period and that contain reserve information relevant to the insured's claim for coverage for an underlying medical malpractice lawsuit (American Medical Alert Corp. v. Evanston Insurance Company, et al., No. 655974/2016, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 961).



Professional Liability Insurer Has No Duty To Cover Negligent Notarization Claims
NEW ORLEANS - Granting a professional liability insurer's motion for summary judgment in its declaratory judgment lawsuit, a Louisiana federal judge on March 22 found that a policy exclusion relieves the insurer of the duty to defend and indemnify its law firm insured against an underlying negligent notarization claim (Westport Insurance Corp. v. Juge Napolitano Guilbeau Ruli & Frieman, et al., No. 17-12536, E.D. La., 2018 U.S. Dist. LEXIS 47199).



Excess Insurer Does Not Have To Equitably Contribute To Doctor's Defense Costs
SAN FRANCISCO - Rejecting a professional liability insurer's appeal on March 14, the Ninth Circuit U.S. Court of Appeals found that a captive insurer is not the primary insurer and is not liable for equitable contribution of the defense and indemnity costs incurred by a physician sued for medical negligence (Admiral Insurance Company v. Community Insurance Group SPC Limited, Nos. 16-17321 and 17-15481, 9th Cir., 2018 U.S. App. LEXIS 6325).



Judge: Insurer's Claim For $5M Defects Settlement Coverage Made Before Policy
NEW YORK - In a dispute over coverage for a $5 million construction defects settlement, an insurer's claim arises out of "wrongful acts" alleged in a demand letter made before the inception of a professional liability insurance policy, a New York federal judge ruled March 26 (Colony Insurance Co. v. AIG Specialty Insurance Co., No. 15-3896, S.D. N.Y.).



9th Circuit Affirms Dismissal Of Financial Elder Abuse Claims Against Insurer
PORTLAND, Ore. - Following the Oregon Supreme Court's answer to its certified question, the Ninth Circuit U.S. Court of Appeals held on March 29 that a lower federal court properly dismissed financial elder abuse claims under Oregon Revised Statutes 124.110(1)(b) brought against an insurer (Lorraine Bates, et al. v. Bankers Life and Casualty Company, et al., No. 14-35397, 9th Cir., 2018 U.S. App. LEXIS 7960).



Judge Awards Insurer $1.1M In Attorney Fees In 'Unmeritorious, Unjust' Bad Faith Suit
PHOENIX - An Arizona federal judge on March 30 awarded an insurer $1,099,011.50 in attorney fees, finding that an insured's breach of contract, bad faith and negligence lawsuit was "unmeritorious and unjust at its core" and that failure to award the attorney fees "would work an injustice in the circumstances of this case" (11333 Inc. v. Certain Underwriters at Lloyd's, London, et al., No. 14-02001, D. Ariz., 2018 U.S. Dist. LEXIS 54130).



Procurement Fraud Claim Against Insurer Tossed In Flood Coverage Dispute
SAN FRANCISCO - A California federal magistrate judge on March 8 granted a federal flood insurer's motion to dismiss insureds' procurement fraud claim, finding that the claim is insufficient to allege fraud (Alicia Martin v. CSAA Insurance Exchange, et al., No. 17-04066, N.D. Calif., 2018 U.S. Dist. LEXIS 38444).



Federal Judge: Coverage Barred By Policy Exclusion For Dishonest Conduct
CINCINNATI - Granting an insurer's motion for summary judgment in its declaratory judgment lawsuit, a federal judge in Ohio on March 31 found that coverage for an underlying lawsuit that resulted in a $49.5 million jury verdict against a trade association insured is barred by an insurance policy's exclusion for dishonest or deliberately fraudulent conduct (Evanston Insurance Company v. Certified Steel Stud Association, et al., No. 16-276, S.D. Ohio, 2018 U.S. Dist. LEXIS 55154).



Majority: Court Erred In Finding Mosquito Bite Was Not 'Accidental Bodily Injury'
NEW ORLEANS - A majority of the Fifth Circuit U.S. Court of Appeals on March 22 held that a lower federal court erred in relying solely on the Centers for Disease Control and Prevention to determine that there is no issue of material fact regarding whether a mosquito bite was an "accidental bodily injury," reversing the lower court in part in a dispute over accidental death insurance benefits (Gloria Wells v. Minnesota Life Insurance Company, No. 16-20831, 5th Cir., 2018 U.S. App. LEXIS 7267).



Second-Tier Subcontractor's Insurer Liable For $1.7M Settlement, Defense Costs
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on March 28 found that a "second-tier" subcontractor's insurer was liable to pay the full costs of a $1.7 million underlying personal injury settlement and all of another insurer's underlying defense costs, affirming in part, vacating in part and remanding in part (Continental Casualty Company v. Amerisure Insurance Company, Nos. 17-1149 and 17-1208, 4th Cir., 2018 U.S. App. LEXIS 7754).



Insurer's Duty To Defend Negligence Suit Is Limited To $100,000, Panel Affirms
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on March 27 affirmed a lower federal court finding that an insurer was required to provide only $100,000 in coverage to defend a lawsuit alleging that a commercial climbing gym insured was negligent in hiring two adult coaches who engaged in consensual sexual activity with a minor who was on the competitive climbing team (Gemini Insurance Company v. Earth Treks, Inc., No. 17-1652, 4th Cir., 2018 U.S. App. LEXIS 7622).



Impaired Property Exclusion Bars Coverage For Negligence Suit, Panel Affirms
LOS ANGELES - A California appeals panel on March 19 affirmed a lower court's finding that an insurer has no duty to defend its insured against underlying claims that it negligently installed electrical equipment for a medical scanner because the policy excludes coverage for loss of use of property caused by a deficiency in the insured's work (All Green Electric, Inc. v. Security National Insurance Company, No. B279456, Calif. App., 2nd Dist., Div. 8, 2018 Cal. App. Unpub. LEXIS 1817).



Real Estate Property Managed Endorsement Rendered Policy Excess, 9th Circuit Affirms
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on March 13 affirmed a lower federal court's finding that a real estate property managed endorsement rendered an insurer's policies excess with respect to an underlying personal injury claim and, therefore, the insurer has no duty to defend or indemnity its property manager insured (Atain Specialty Insurance Co. v. Sierra Pacific Management Co., et al., No. 16-17221, 9th Cir., 2018 U.S. App. LEXIS 6232).



Judge: No Disparagement Or Defamation Claim Was Alleged To Trigger Duty To Defend
CAMDEN, N.J. - Granting an insurer's motion for summary judgment, a New Jersey federal judge held March 26 that the insurer's defense duty was not triggered because neither a disparagement claim nor a defamation claim was alleged in the underlying lawsuit brought against the insured (Albion Engineering Company v. Hartford Fire Insurance Company, No. 17-3569, D. N.J., 2018 U.S. Dist. LEXIS 49271).



Insurer Challenges Coverage For Claims Club Misappropriated Images On Social Media
TRENTON, N.J. - A commercial general liability insurer on March 9 filed a declaratory judgment lawsuit in the U.S. District Court for the District of New Jersey challenging coverage for underlying claims that its club owner insured misappropriated images and likenesses of alleged models and actresses without their consent for use in its advertising materials on social media (Capitol Specialty Insurance Corporation v. 35 Club, LLC, et al., No. 18-03399, D. N.J.).



Scallops Damage Was Caused By 'Occurrence' Under CGL Policy, Justice Finds On Remand
BOSTON - Following remand from Massachusetts Appeals Court, a Massachusetts justice on Jan. 22 granted a seafood-processing facility insured's renewed motion for partial summary judgment in a coverage dispute, finding that unexplained damage to scallops was caused by an occurrence pursuant to a commercial general liability insurance policy (The Hanover Insurance Group, Inc. v. Raw Seafoods, Inc., No. 139260, Mass. Super., 2018 Mass. Super. LEXIS 18).



Panel: 'Relation Back' Doctrine Does Not Render Claims Against Insurer Timely
SALT LAKE CITY - A Utah appeals panel on March 22 held that a lower court properly denied a convenience store insured's motion to amend its complaint to add breach of contract and bad faith claims against its insurer in a dispute over an employee theft, finding that the "relation back" doctrine does not save the untimely claims (The Frugal Flamingo Quick Stop v. Farm Bureau Mutual Insurance Company, No. 20160540, Utah App., 2018 Utah App. LEXIS 50).



'Knowing Violation' Exclusion Does Not Bar Coverage, Wisconsin Panel Says, Reverses
WAUKESHA, Wis. - A Wisconsin appeals panel on March 28 found that a lower court erred in ruling that a commercial general liability insurance policy's "knowing violation" exclusion precludes coverage for all 10 underlying claims against a medical supply company insured, reversing and remanding the lower court's ruling in favor of the insurer (West Bend Mutual Insurance Company v. Ixthus Medical Supply, Inc., et al., No. 2017AP909, Wis. App., Dist. 2, 2018 Wisc. App. LEXIS 355).



Justice: Engineer's Insurer Has No Duty To Defend Against Wrongful Death Suit
NEW YORK - A New York justice on March 13 held that due to a limitation in a policy endorsement, an engineer's insurer does not owe additional insured coverage to a construction company and the owner of a premises where a fatal injury occurred and, therefore, has no duty to defend them against an underlying wrongful death lawsuit (New York Marine and General Insurance Company, et al. v. American Empire Insurance Company, et al., No. 151192/2017, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 882).



Insurer Refutes Claim That Its Narrow Policy Interpretation 'Defies Common Sense'
BLUEFIELD, W.Va. - A business owners liability insurer on March 12 replied to an insured's response in opposition to its motion challenging coverage for seven lawsuits alleging that the insured's employee filed fraudulent tax returns (Ohio Security Insurance Co. v. K R Enterprises, Inc., et al., No. 15-16264, S.D. W.Va.).



Judge Allows Limited Jurisdictional Discovery In 9/11 Suit Against Saudi Arabia
NEW YORK - A New York federal judge on March 28 denied the Kingdom of Saudi Arabia's motion to dismiss a lawsuit alleging that its government's agents and employees bear responsibility for the Sept. 11, 2001, terrorist attacks, finding that limited jurisdictional discovery on specific factual allegations critical to whether Saudi is immune from the suit will proceed promptly and expeditiously as to the alleged tortious acts by purported Saudi agents Fahad al Thumairy and Omar al Bayoumi (Underwriters Inc., et al. v. Kingdom of Saudi Arabia, et al., No. MDL 03-1570, S.D. N.Y.).



Judge: Insurer's Delay In Denying Coverage Of Sexual Assault Claim Is Unreasonable
NEW YORK - A New York federal judge on March 26 found that a commercial general liability insurer's unexplained delay of at least 15 months between the date it learned of the grounds to deny coverage of an underlying sexual assault suit and the date it actually denied coverage is unreasonable under New York Insurance Law Section 3420(d)(2), concluding that the insurer cannot invoke the policy's abuse or molestation exclusion (Philadelphia Indemnity Insurance Co. v. Intrepid Group, LLC, et al., No. 16-7928, S.D. N.Y., 2018 U.S. Dist. LEXIS 50744).



Judge Dismisses Suit Seeking Coverage For Claims That Insured Stole Trade Secrets
PHILADELPHIA - A Pennsylvania federal judge on March 15 granted a commercial general liability insurer's motion to dismiss an insured's declaratory judgment lawsuit seeking coverage for underlying claims that it stole a competitor's employees and trade secrets to develop and sell competing products, finding that the policy's libel and slander coverage provision was not triggered (TELA Bio, Inc., et al. v. Federal Insurance Company, No. 16-5585, E.D. Pa., 2018 U.S. Dist. LEXIS 43221).



Relators In Katrina Qui Tam Suit Say State Farm Withheld, Spoliated Documents
GULFPORT, Miss. - The relators in a 12-year-old qui tam suit accusing State Farm Fire and Casualty Co. of filing false flood insurance after Hurricane Katrina ask a California federal court in a March 12 reply brief to compel the insurer to produce documents it improperly withheld as privileged (United States, ex rel. Cori Rigsby, et al. v. State Farm Fire & Casualty Co., No. 1:06-cv-00433, S.D. Miss.).



Judge: Collateral Estoppel Applies; Professional Liability Insurer Owes No Defense
FAIRBANKS, Alaska - Applying Alaska's four elements of collateral estoppel, a federal judge on March 12 found that the court is bound by the Alaska Supreme Court's finding in an underlying lawsuit that a law firm insured had knowledge of a potential claim prior to a professional liability insurance policy's effective date (ALPS Property & Casualty Insurance Company v. Merdes & Merdes, et al., No. 14-00002, D. Ala., 2018 U.S. Dist. LEXIS 39653).



Federal Judge Abstains From, Remands Legal Malpractice Coverage Suit To State Court
NEWARK, N.J. - A New Jersey federal judge on March 12 abstained from adjudicating an insurer's declaratory judgment lawsuit disputing coverage for underlying malpractice claims against its attorney insured, remanding the case to the Bergen County, N.J., Superior Court (Craig Swenson v. Carolina Casualty Insurance Co., No. 18-3086, D. N.J., 2018 U.S. Dist. LEXIS 39885).



Panel: Exclusion For Claims Arising Out Of 'Unfair Business Practices' Does Not Apply
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on March 2 affirmed a lower federal court's finding that a professional liability policy exclusion does not bar coverage for an underlying class action lawsuit alleging that a real estate broker insured and individual agents received secret profits while acting as real estate agents (Hanover Insurance Co. v. Paul M. Zagaris, Inc., No. 17-15477, 9th Cir., 2018 U.S. App. LEXIS 5429).



Federal Judge: Insurer Has Duty To Defend Suit Arising From Fetal Injury
HOUSTON - A Texas federal judge on Feb. 28 held that a commercial general liability and professional liability insurer has a duty to defend its insured against an underlying lawsuit over a fetal injury, further finding that whether the insurer has a duty to defend is not ripe for review (Colony Insurance Company v. Hearts with Hope Foundation, No. 17-886, S.D. Texas, 2018 U.S. Dist. LEXIS 32280).



Judge: Claims Question Appropriateness Of Chiropractor's Professional Services
SEATTLE - A Washington federal judge on Feb. 27 denied a professional liability insurer's motion for summary judgment in its lawsuit disputing coverage for underlying claims that a chiropractor insured submitted misleading, false and/or fraudulent bills to obtain personal injury protection (PIP) payments from his patients' auto insurer (PACO Assurance Company, Inc. v. Peter J. Hanson, No. 17-0649, W.D. Wash., 2018 U.S. Dist. LEXIS 31832).



Panel Reverses Dismissal Of Claims In Coverage Dispute Over Anti-Semitic Harassment
BROOKLYN, N.Y. - A New York appeals panel on March 9 reversed a lower court's dismissal of an insurer's four claims seeking a declaration that it has no duty to indemnify an underlying lawsuit alleging that its school district insured violated five students' civil rights by being deliberately indifferent to anti-Semitic harassment and discrimination that was perpetrated by other students (Graphic Arts Mutual Insurance Co. v. Pine Bush Central School District, et al., No. 2015-11565, N.Y. Sup., App. Div., 2nd Dept., 2018 N.Y. App. Div. LEXIS 1553).



9th Circuit Affirms Ruling In Insurer's Favor In Suit Over Federal Investigation
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on March 7 affirmed a lower federal court's ruling in favor of a directors and officers liability insurer in a coverage dispute arising from an underlying investigation brought by the U.S. Department of Justice against its health care organization insured (Millennium Laboratories, Inc. v. Allied World Assurance Company [U.S.] Inc., No. 16-55432, 9th Cir., 2018 U.S. App. LEXIS 5782).



Judge: Public Policy Does Not Excuse Insurers From Indemnifying Insureds' Fraud
WILMINGTON, Del. - A Delaware judge on March 1 granted in part and denied in part directors and officers liability insurers' motion for summary judgment in their lawsuit seeking a declaration that principals in a company are not entitled to coverage for the costs they incurred in negotiating settlements in two lawsuits brought by stock shareholders, saying that although it may strain public policy to permit a director to collect insurance on a purported fraud, it does not appear to be explicitly prohibited by state law (Arch Insurance Company, et al. v. David H. Murdock, et al., No. N16C-01-104-EMD, Del. Super., New Castle Co., 2018 Del. Super. LEXIS 96).



Negligence Claim Triggers Directors & Officers Coverage, Massachusetts Panel Says
BOSTON - A Massachusetts appeals panel on Jan. 25 found that a directors and officers liability insurer has a duty to defend its insured against an underlying lawsuit brought by trustees of a condominium development, reversing and remanding a lower court (Frank Fodera, Sr. v. Arbella Protection Insurance Company, No. n/a, Mass App. Div., 2018 Mass. App. Div. LEXIS 3).



Court Did Not Err In Enforcing Forum-Selection Clause, 5th Circuit Affirms
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on March 9 affirmed a lower court's dismissal of Louisiana insureds' lawsuit seeking coverage for 2015 property damage to their food-manufacturing facility, finding that the lower court properly enforced the insurance policy's forum-selection clause (Al Copeland Investments LLC, et al. v. First Specialty Insurance Corp., No. 17-30557, 5th Cir., 2018 U.S. App. LEXIS 5949).



Majority: 'Electrical Current' Exclusion Bars Coverage For Damage To City Property
DES MOINES, Iowa - A majority of the Iowa Court of Appeals on March 7 affirmed a lower court's finding that an insurance policy's "electrical currents" exclusion precludes coverage for damage to equipment at an electrical substation owned by the city of West Liberty, Iowa (West Liberty v. Employers Mutual Casualty Company, No. 16-1972, Iowa App., 2018 Iowa App. LEXIS 221).



Georgia Panel Vacates, Remands 'Long-Standing Insurance Coverage Case'
ATLANTA - A Georgia appeals panel on March 7 vacated and remanded a lower court's order in a "long-standing insurance coverage case" arising from for employee forgery and fraud, finding that the trial court exceeded its authority under the state's Declaratory Judgment Act by issuing a coercive declaratory judgment (Georgia Casualty & Surety Company v. Valley Wood Inc., No. A17A2093, Ga. App., 1st Div., 2018 Ga. App. LEXIS 166).



Employee Theft Constituted 1 Occurrence Under 1 Policy, Federal Judge Says
PHILADELPHIA - A Pennsylvania federal judge on March 8 held that a $3 million employee theft against an insured that spanned a decade constitutes only one "occurrence" under only one of the insured's four consecutive insurance policies, granting the insurer's motion to dismiss a breach of contract suit (Wescott Electric Company v. Cincinnati Insurance Company, No. 17-4718, E.D. Pa., 2018 U.S. Dist. LEXIS 37938).



Panel: Restoration Company Has No Standing To Pursue RICO Claim Against Insurer
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on March 9 affirmed a lower federal court's finding that a restoration company's alleged injury was not proximately caused by an insurer's conduct and, therefore, the restoration company fails to state a plausible claim under the Racketeer Influenced and Corrupt Organizations Act against the insurer and its consultants (Slay's Restoration, LLC v. Wright National Flood Insurance Company, et al., No. 17-1106, 4th Cir., 2018 U.S. App. LEXIS 5958).



Alleged Advertising Injury Is Substantially The Same Over Time, Federal Judge Says
ELIZABETH, N.C.- A North Carolina federal judge on March 5 found that an alleged advertising injury as to the insured's use of a trademark is substantially the same over time without any meaningful interruption and, therefore, is not covered under its businessowners liability and commercial umbrella insurance policies (Pennsylvania National Mutual Casualty Insurance Company v. Beach Mart, Inc., No. 14-8, E.D. N.C., 2018 U.S. Dist. LEXIS 36211).



Utah High Court Admonishes Insured's Counsel For Saying It Was Biased For Insurers
SALT LAKE CITY - Denying an insured's motion for rehearing on the issue of attorney fees in a coverage dispute arising from a jet ski accident, the Utah Supreme Court on Feb. 28 said the insured's counsel's rhetoric questioning its motives rather than ideas has no place in filings before any Utah court (Fire Insurance Exchange v. Robert Allen Oltmanns, No. 20160304, Utah Sup., 2018 Utah LEXIS 32).



Claims Sounding In Professional Negligence Are Untimely, Panel Says In Wildfire Suit
SACRAMENTO, Calif.- A California appeals panel on Feb. 20 affirmed a lower court's finding that the gravamen of an insured's breach of fiduciary duty and financial elder abuse claims against its insurance broker is professional negligence and, therefore, the claims are time-barred by California Code of Civil Procedure Section 339, Subdivision 1 (Hank R. Pritchard V. Andy Houghton Insurance Agency, et al., No. C082975, Calif. App., 3rd Dist., 2018 Cal. App. Unpub. LEXIS 1160).



Harvey Weinstein's Insurers Dispute Coverage For 11 Sexual Assault Lawsuits
NEW YORK - In a 37-page complaint filed in a New York court on Feb. 28, insurers of Harvey Weinstein seek a declaration that they owe no coverage for 11 underlying lawsuits alleging that Weinstein committed intentional, egregious sexual predatory behavior that spanned at least 30 years (Federal Insurance Company, et al. v. Harvey Weinstein, No. 650952/2018, N.Y. Sup., New York Co.).



5th Circuit Weighing Trigger For Law Enforcement Insurance Liability Policy
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals is set to decide whether law enforcement liability policies issued to a local Mississippi government in the mid-1980s cover claims by three individuals wrongfully arrested and imprisoned in 1980 and later exonerated in 2010 (The Travelers Indemnity Co., et al. v. Ethel Mitchell, et al., No. 17-60291, 5th Cir.).