In a favorable ruling for a Wiley Rein client, a Tennessee federal court has rejected an insured’s motion to compel documents and interrogatory responses relating to reserves, reinsurance communications, claims and underwriting manuals, and other claims against other insureds. First Horizon Nat’l Corp. v. Houston Cas. Co., 2016 WL 5869580 (W.D. Tenn. Oct. 5, 2016). Wiley Rein represents the primary carrier.
The United States District Court for the Northern District of Mississippi, applying Mississippi law, has granted summary judgment in favor of an insurer, holding that the insurer is entitled to rescind a lawyers professional liability policy based on the insured attorneys’ material misrepresentations in the insurance application. Imperium Ins. Co. v. Shelton & Assocs. P.A., 2016 WL 5477635 (N.D. Miss. Sept. 29, 2016). The court also held that, even if the policy were not rescinded, the malpractice actions against the attorneys were excluded from coverage based on the policy’s Prior Knowledge Exclusion.
Applying Texas law, the United States Court of Appeals for the Fifth Circuit has held that an exclusion barring coverage for any claim brought or maintained by or on behalf of any creditor of the company precluded coverage for claims by lenders against company officers alleging that they misrepresented the financial condition of a company. Markel Am. Ins. Co. v. Verbeek, 2016 WL 5400412 (5th Cir. Sept. 27, 2016)
The Delaware Superior Court, applying Delaware law, has held that an insured’s failure to provide timely notice of a claim during the applicable claims-made policy period did not preclude coverage when the insured renews the policy and provides notice of the claim during the renewal policy period, unless the insurer can prove prejudice as a result of the untimely notice. Medical Depot, Inc. v. RSUI Indem. Co., 2016 WL 5539879 (Del. Super. Ct. Sept. 29, 2016).
The Ninth Circuit Court of Appeals has reversed a district court’s denial of an insurer’s motion for summary judgment and held that the insurer, which was organized as a risk retention group, was entitled to reimbursement of defense costs incurred in defense of a non-covered claim because Alaska’s statutory bar against recoupment conflicts with the federal statute pursuant to which the risk retention group was formed. Attorneys Liability Protection Society, Inc. v. Ingaldson Fitzgerald, P.C., 2016 WL 5335036 (9th Cir. 2016). The court also rejected the policyholder’s argument that the insurer should be estopped from asserting defenses to coverage because it acted in bad faith by failing to attend settlement meetings.
The United States District Court for the Southern District of Indiana has held that coverage under a claims-made-and-reported policy is not illusory where coverage is unavailable for claims that do not satisfy the policy’s claims-made, reporting, and retroactive date requirements. Sunshine v. Gen. Star Nat’l Ins. Co., 2016 WL 5371848 (S.D. Ind. Sept. 26, 2016).
In a win for a Wiley Rein client, the United States District Court for the District of New Jersey, applying New Jersey law, held that no coverage was available under an errors and omissions policy for remediation work performed by an insured because the insured was not “legally obligated to pay” for the remediation. Wyndham Constr., LLC v. Columbia Cas. Co., 2016 WL 5329585 (D.N.J. Sept. 21, 2016). In addition, the court held that the remediation costs were not covered “damages” because they were incurred without the insurer’s consent. Wiley Rein represented the insurer.
The United States District Court for the Southern District of New York, applying Pennsylvania law, has held that an insured’s failure to provide sufficient notice of a potential claim during the policy period precluded coverage under its claims-made policy. University of Pittsburgh v. Lexington Ins. Co., 2016 WL 4991622 (S.D.N.Y. Sept. 16, 2016).
The United States Court of Appeals for the Seventh Circuit, applying Illinois law, has held that extrinsic evidence that does not decide an “ultimate issue” in the underlying claim may be admitted in a declaratory judgment action for purposes of establishing that an insurer has no duty to defend. Landmark Am. Ins. Co. v. Hilger, 2016 WL 5239833 (7th Cir. Sept. 22, 2016).
The United States District Court for the Eastern District of New York, applying New York law, has held that a consent judgment accompanied by a covenant not to execute by the claimant was covered “Loss” under a D&O insurance policy where there was no waiver of the right to pursue the insurer. Intelligent Digital Systems, LLC v. Beazley Ins. Co., 2016 WL 5390390 (E.D.N.Y. Sept. 16, 2016).