In In re Illinois National Insurance Co., the Texas Supreme Court held that disclaiming insurers were not bound by any underlying settlement agreement, entered into without the insurers’ consent, where the claimants promised not to pursue the insured’s non-insurance assets. The underlying claimants were investment funds that filed suit in 2014 against Cobalt International Energy and its officers and directors. The claimants asserted securities fraud in connection with ... Keep Reading »
Duty to Defend
Divided Ninth Circuit Finds Toxic Dust From Wildfire Is Not “Pollutant” Under Policy’s Pollution Exclusion
In Wesco Insurance Co. v. Brad Ingram Construction, the Ninth Circuit Court of Appeals reversed a summary judgment ruling in favor of Wesco Insurance Co. after a split panel concluded that toxic dust and debris from a wildfire did not fall under the policy’s definition of “pollutant.” Background and Underlying Action The plaintiff in the underlying lawsuit, Richard Vargas, was allegedly exposed to toxic dust while loading and unloading his work truck during the ... Keep Reading »
“Common Sense Should Prevail” — Federal Court Recognizes Exception to “Eight-Corners Rule,” Allows Use of Undisputed Extrinsic Evidence to Preclude Duty to Defend
In Southern-Owners Insurance Co. v. Midnight Tires Inc., the U.S. District Court for the Middle District of Florida granted an insurer’s motion for summary judgment after considering extrinsic evidence on the issue of the insurer’s duty to defend in an action seeking a declaration that the insured’s garage general liability policy did not cover claims in an underlying motor vehicle injury lawsuit. In the underlying action, Midnight Tires Inc. was sued in connection ... Keep Reading »
Explosives Manufacturer’s Pollution-Related Claim Blown Up by State-Specific Endorsement
In Dyno Nobel v. Steadfast Insurance Co., the Tenth Circuit Court of Appeals recently held that, under Utah law, where a specific state is listed in an endorsement heading, coverage under the endorsement is limited to claims that have a nexus with that state, so long as such a reading is consistent with the body of the endorsement and policy text. Dyno Nobel is an explosives manufacturer with its principal place of business in Utah. It purchased a commercial general ... Keep Reading »
New York Federal Court Enforces “Third Party or Contracted Security” Exclusion to Abrogate Duty to Defend for All Defendants in Assault Suit
In Clear Blue Specialty Insurance Co. v. TFS NY Inc., the U.S. District Court for the Eastern District of New York, interpreting the plain and unambiguous terms of a commercial general liability policy issued by Clear Blue Specialty Insurance Co. to TFS NY Inc., ruled Clear Blue did not have a duty to defend TFS against a suit arising from an alleged assault. TFS does business as Sugardaddy’s and owns and operates a nightclub. The underlying dispute stemmed from a ... Keep Reading »
Alabama Federal Court Finds No Duty to Defend Lawsuit Alleging Concealment of Defects in Sale of Home
In Nationwide Mutual Fire Insurance Co. v. Carmichael, the U.S. District Court for the Northern District of Alabama, applying Alabama law, entered summary judgment ruling that Nationwide Fire Insurance Co. had no duty to defend a home seller under a homeowners policy for an underlying lawsuit alleging that the seller failed to disclose defects in his home when selling it. The underlying lawsuit was filed by the purchasers of the home. The purchasers asserted a claim ... Keep Reading »
Cause and Effect: Southern District of Florida Determines Parkland Shooting Constituted One Occurrence
In the ongoing case of Tony v. Evanston Insurance Co., the U.S. District Court for the Southern District of Florida recently issued a ruling denying a motion to dismiss filed by defendant Evanston Insurance Co. in which it addressed whether multiple shootings originating from a single shooter are treated as separate occurrences or a single occurrence for purposes of coverage under an insurance policy. In the context of insurance coverage cases dealing with shootings, the ... Keep Reading »
Seventh Circuit Declines to Enforce Plain Language of Distribution of Material Exclusion in Business Liability Policy
On June 15, 2023, in Citizens Insurance Company of America v. Wynndalco Enterprises LLC, the Seventh Circuit Court of Appeals affirmed the U.S. District Court for the Northern District of Illinois’ decision holding that a Citizens’ business liability insurance policy exclusion for the distribution of material in violation of statutes gave rise to an ambiguity. The ruling stems from two putative consumer class actions filed against Wynndalco Enterprises LLC, an ... Keep Reading »
Fifth Circuit Holds No Liability Coverage for Negligence Claim Premised on Allegations of Intentional Conduct
In Gold Coast Commodities, Inc. v. Crum & Forster Specialty Insurance Co., issued May 22, 2023, the U.S. Court of Appeals for the Fifth Circuit held that a pollution liability policy did not provide coverage for a negligence claim premised on allegations of intentional conduct. In Gold Coast, the insured, Gold Coast Commodities sought defense and indemnity coverage for an underlying lawsuit filed against it by the city of Brandon, Mississippi. In that lawsuit, the ... Keep Reading »
Second Circuit Affirms Ruling That Prior Knowledge Exclusion Barred Coverage for Legal Malpractice Lawsuit
The Second Circuit Court of Appeals recently affirmed a lower court’s ruling, which declared that North River Insurance Co. had no duty to defend or indemnify its insured in connection with a legal malpractice lawsuit. Background In September 2019, Max Leifer and his law office applied for professional liability insurance with North River. Leifer’s application was approved, and North River issued the policy, which covered damages and defense expenses for claims ... Keep Reading »
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