The United States District Court for the Southern District of California has held that a liability insurer had no duty to defend a claim made against an insured arising out of the denial of an employee’s life insurance benefits because coverage was barred by an ERISA exclusion. By Referral Only, Inc. v. Travelers Prop. Cas. Co. of Am., 2019 WL 1559145 (S.D. Cal. Apr. 10, 2019).
No Coverage for Wage and Hour Claims Under Labor Professional Liability Policy
Posted in Rescission, Wrongful ActApplying California law, a federal district court has held that an insurer was not obligated to cover a labor union’s defense costs and damages in a lawsuit brought by a former employee because the alleged wage and hour violations were not “wrongful employment practices” or “wrongful acts” under the policy. United Farm Workers of Am. v. Hudson Ins. Co., 2019 WL 1517568 (E.D. Cal. Apr. 8, 2019). The court also held that material misrepresentations in the labor union’s application for insurance voided the policy.
Run-Off Exclusion Precludes Coverage for OIG Subpoena
Posted in “Claim”The United States District Court for the Eastern District of Texas, applying Texas law, has held that a government-issued subpoena constituted a “Claim” under a directors and officers liability policy, but also determined that the policy’s “run-off exclusion” barred coverage. Ocean’s Healthcare, L.L.C. v. Illinois Union Ins. Co., 2019 WL 1437955 (E.D. Tex. March 30, 2019).
Connecticut Supreme Court Answers Certified Question in Favor of Insurance Adjuster, Holding That Continuing Course of Conduct Doctrine Did Not Toll Statute of Repose
Posted in UncategorizedIn a win for Wiley Rein’s client, the Connecticut Supreme Court has held that the continuing course of conduct doctrine could not save the untimely claims of an insurer brought against an insurance adjuster. See Essex Ins. Co. v. William Kramer & Associates, LLC, Case No. SC 20130 (Conn. Apr. 16, 2019). On a certified question from the United States Court of Appeals for the Second Circuit, the Supreme Court held that the doctrine did not toll the applicable three-year statute of repose because the adjuster’s duties to the insurer ended when the adjuster closed its file more than six years before the insurer’s lawsuit.
Warranty Exclusion Bars Coverage Where Start-Up Made Material Misrepresentations in Application about Potential Acquisitions
Posted in RescissionThe U.S. District Court for the Central District of California, applying California law, held that a warranty exclusion barred coverage where a start-up company made material misrepresentations regarding contemplated acquisitions in its policy application. Scottsdale Ins. Co. v. CSC Agility Platform, Inc., 2019 WL 1452910 (C.D. Cal. Feb. 4, 2019). The court further held that the insurer did not waive its right to enforce the warranty exclusion, nor was it estopped from doing so.
Contract Exclusion Bars Coverage for Demand for Cost-Overrun Payment
Posted in Breach of Contract, Defense Costs, Wrongful ActThe United States District Court for the Eastern District of California, applying California law, has held that no coverage is available for a demand for payment in excess of agreed purchase orders based on an exclusion barring coverage for loss “as a result of” a claim “for any actual or alleged obligation under . . . any oral or written contract or agreement.” Cross Check Servs., LLC v. Old Republic Ins. Co., 2019 WL 1429336 (E.D. Cal. Mar. 29, 2019).
Excess Carrier Not Entitled to Compel Production of Insured’s Settlement Agreement with Underlying Carriers
Posted in Cooperation, Excess insurance/exhaustionApplying Illinois law, a federal district court has held that a cooperation clause in an excess insurer’s policy did not entitle the excess insurer to compel production of the insured’s settlement agreement with a primary carrier. Homeland Ins. Co. of N.Y. v. Health Care Serv. Corp., 2019 WL 1499300 (N.D. Ill. Apr. 3, 2019).
Coverage Barred Because Causally Related Claims Deemed a Single Claim Under Earlier Policy
Posted in Related Claims and associated exclusionsApplying California law, a federal district court has held that an original and an amended complaint arising out of a series of related wrongful acts were deemed a single claim under an earlier policy, such that coverage was barred under a policy issued later. General Ins. Co. v. INB Ins. Servs. Corp., 2019 WL 1318252 (N.D. Cal. Mar. 22, 2019).
Options Trading Exclusion Unambiguously Bars Coverage for Investor Claims
Posted in Exclusion lead-in language (Arising out of), ExclusionsThe United States District Court for the District of Utah has held that an errors and omissions policy’s “options trading” exclusion applied to bar coverage for claims resulting from an insured investment company’s high-risk trade. Allegis Invest. Servs., LLC v. Arthur Gallagher & Co., 2019 WL 1002364 (D. Utah Mar. 1, 2019).
Claims Based on Similar Wrongdoing Deemed “Related” Despite Geographic Differences of Class Composition
Posted in Defense Costs, Related Claims and associated exclusionsA Utah federal district court has held that claims based on similar acts of wrongdoing were barred by a prior notice exclusion despite geographic differences among the putative class definitions. Starr Indem. & Liab. Co. v. Monavie, Inc., 2019 WL 1227930 (D. Utah Mar. 5, 2019). The court also ruled that the insurer was entitled to recoup defense costs incurred in connection with the non-covered claims.