We have previously discussed the requirements imposed on insurers by New York law to inform insureds seeking coverage for death or bodily injury to describe any disclaimer of coverage “with a high degree of specificity of the ground or grounds on which the disclaimer is predicated.” In Philadelphia Indemnity Insurance Co. v. Yeshivat Beth Hillel of Krasna Inc., the Second Circuit Court of Appeals recently illustrated the consequences of failing to disclaim with such ... Keep Reading »
Duty to Defend
Texas Federal Court Finds Law Firm’s Alleged 40,000 Unauthorized Claims Related to Deepwater Horizon Disaster Were Not “Professional Services” Triggering Duty to Defend
The Southern District of Texas held that New York Marine and General Insurance Co. had no duty to defend its insured under a legal professional malpractice insurance policy for claims stemming from the firm's efforts to develop business in the wake of the Deepwater Horizon disaster. In the underlying litigation (the Nguyen litigation), a group of 439 Vietnamese Americans brought claims against the law firm, alleging that the firm targeted Vietnamese American fishermen ... Keep Reading »
Colorado Federal Court Finds “Kona” Class Actions Did Not Trigger “Personal and Advertising Injury” Insuring Agreement
A Colorado federal court relieved the Travelers Indemnity Company of America and Travelers Property Casualty Company of America of any obligation to defend or indemnify two putative class actions, finding neither action implicated the insuring agreement for "personal and advertising injury" contained in several Travelers commercial liability policies. The Underlying Actions Two underlying class actions were filed in Washington federal court against various coffee ... Keep Reading »
Ninth Circuit Flags NFL Stadium Design and Construction as Intentional Conduct Resulting in Out of Bounds Claim for Occurrence Coverage
The Ninth Circuit Court of Appeals recently found that insurers did not have to defend a construction company from the San Francisco 49ers' claim that the company negligently failed to construct the NFL team's stadium to be accessible to all people with physical disabilities. In Hartford Fire Insurance Co. v. Turner/Devcon, the federal appellate court ruled that because the construction of the stadium was an intentional act, it did not constitute bodily injury or ... Keep Reading »
Gluing Feathers to a Phone Does Not Make a Turkey: Seventh Circuit Finds Mere “Negligence” Label and “Stitched Together” Factual Allegations Do Not Trigger Duty to Defend Aggressive Robocall Lawsuit Under Illinois Law
In 2015, Ocwen Financial Corp. was sued for its attempts to collect on a mortgage loan that had been discharged in bankruptcy. It tendered the defense to Zurich American Insurance Co., but Zurich asserted that two exclusions precluded coverage and sought a declaration from a federal court that it had no duty to defend the underlying complaint. The district court agreed, and the Seventh Circuit affirmed on appeal. The underlying complaint alleged that Ocwen violated ... Keep Reading »
Outlier Decision of New York Appellate Court Denies Insurer’s Right to Recoup Defense Costs Even Though Court Found No Duty to Indemnify
Recoupment of defense costs (defense fees and costs) by insurers in the absence of a duty to indemnify under a liability policy is an unsettled issue in many states. In a recent decision, a New York intermediate appellate court held that even though there was no duty to indemnify an underlying personal injury action under a CGL policy, the insurer could not recoup the defense costs it had advanced under a reservation of rights (ROR) letter where the policy at issue ... Keep Reading »
Ninth Circuit Applies Willful Violation of Law Exclusion in Professional Liability Policy To Preclude Coverage for Wrongful Death Lawsuit Stemming From Doctor’s Unlawful Distribution of Fentanyl
In National Fire & Marine Insurance Company v. Hampton, No. 19-17235 (9th Cir. Oct. 21, 2020), the Ninth Circuit held that a doctor’s guilty plea to the unlawful distribution of a controlled substance barred insurance coverage under his professional liability policy for a subsequent wrongful death lawsuit resulting from a patient’s overdose. According to the Ninth Circuit, the doctor’s admission that he intentionally distributed fentanyl clearly implicated the ... Keep Reading »
The No Corners Rule? New York Federal Court Holds No Duty to Defend Where There Is No Possible Legal or Factual Basis for Indemnification of Insured
Under New York law, an insurer's duty to defend ends if it establishes as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured. This rule was recently applied by the Southern District of New York in Philadelphia Indemnity Insurance Co. v. Streb, Inc., No. 19 CIV. 366 (KPF), 2020 WL 5549316 (S.D.N.Y. Sept. 16, 2020). In Streb, the Philadelphia Indemnity Insurance Company ("PIIC") issued a ... Keep Reading »
An Equitable Exception To the Four Corners Rule: The Eleventh Circuit Looks Beyond Operative Complaint To Find No Duty To Defend
Under Florida law, similar to that of other states, an insurer’s duty to defend is generally determined solely by the allegations found within the four corners of the complaint. Florida courts, however, recognize an exception to that general rule and will allow for the consideration of extrinsic undisputed facts, which, if pled, would place the claim outside the scope of coverage. The Eleventh Circuit recently applied this exception in BBG Design Build, LLC v. Southern ... Keep Reading »
Eleventh Circuit Explicitly Adopts Distinction Following Hoover to Confirm That Coverage Cannot Be Created Through Waiver or Estoppel
On July 30, 2020, the Eleventh Circuit Court of Appeals in AEGIS Electric & Gas International Services Ltd. v. ECI Management LLC reversed the trial court's grant of summary judgment in favor of an insurer, AEGIS Electric & Gas International Services Ltd. In that case, AEGIS issued a real estate services professional liability policy to ECI Management LLC. Subsequently, ECI was named as a defendant in a putative class action in which the plaintiff alleged that ... Keep Reading »
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