The United States Circuit Court of Appeals for the Ninth Circuit, applying California law, has held that an insurer owed no duty to reimburse the insured’s costs of responding to a governmental investigation. Millennium Labs., Inc. v. Allied World Assurance Co., Inc., 2018 WL 1179601 (9th Cir. Mar. 7, 2018). While the court held that the investigation constituted seven “claims,” it found that each such “claim” either fell within the policy’s specific litigation or pending-or-prior litigation exclusions, or was first made after the policy incepted.
The United States District Court for the Eastern District of Pennsylvania has held that where an occurrence-based crime policy covers only losses discovered “during the Policy Period,” no coverage is available for losses discovered after the policy period concluded, despite the fact that a prior policy issued to the insured contained a discovery period extending beyond the termination of the policy. Wescott Electric Co. v. Cincinnati Ins. Co., 2018 WL 1210543 (E.D. Pa. Mar. 8, 2018). Furthermore, where the policy defines one “occurrence” as a “series of acts whether or not related,” multiple employee thefts over ten years constitute a single occurrence.
Applying California law, the United States Court of Appeals for the Ninth Circuit affirmed a federal district court decision which held that a deceptive business practices exclusion in an errors and omissions policy did not bar coverage for a suit alleging the insured real estate broker received kickbacks, because two of the causes of action did not require a finding of deception or fraud. Hanover Ins. Co. v. Paul M. Zagaris, Inc., 2018 WL 1126670 (9th Cir. Mar. 2, 2018).
A New York federal district court, applying New York law, has held that the sending of unsolicited text message advertisements in violation of the Telephone Consumer Protection Act (TCPA) triggered professional services coverage under a Miscellaneous Professional Liability (MPL) policy. Illinois Union Ins. Co. v. US Bus Charter & Limo, Inc., 2018 WL 1193464 (E.D.N.Y. Mar. 8, 2018).
A Colorado federal district court, applying Colorado law, has held that a claim against an information technology consulting firm arising from the firm’s alleged mismanagement of a project to replace its client’s systems did not involve “property damage” (including “loss of use”) under a CGL policy. Ciber, Inc. v. Federal Ins. Co., No. 16-cv-01957-PAB-MEH (D. Colo. Mar. 5, 2018).
Applying Colorado law, the United States Court of Appeals for the Tenth Circuit has held that statutory damages sought under the Telephone Consumer Protection Act are uninsurable penalties, and that injunctive relief does not constitute “damages.” Ace American Ins. Co. v. Dish Network, LLC, 2018 WL 988404 (10th Cir. Feb. 21, 2018).
The United States District Court for the Southern District of Mississippi has held that notice of an underlying accident sent to the insured’s three insurance carriers represented a timely “claim” under the claims-made general liability policies at issue in light of the insurers’ course of conduct upon receipt of the notice. Jordan v. Maxfield & Oberton Holdings LLC, 2018 WL 1033318 (S.D. Miss. 2018).
The United States District Court for the District of New Jersey has held that an exclusion in a professional liability policy applicable to claims arising out of the failure to effect or maintain any insurance precludes coverage for defense costs incurred in an action against an insured on the basis that the action arose out of the insured’s management role in the maintenance of a client’s “key person” life insurance policies. Princeton Inv. Partners, Ltd. v. RLI Ins. Co., 2018 WL 846917 (D.N.J. Feb. 9, 2018).
A New York trial court has rejected a “disclosure-only” settlement in a shareholder class action, determining that the disclosures were not sufficiently beneficial to the class to support the settlement or the related plaintiffs’ fee award. City Trading Fund v. Nye, Index No. 651668/2014 (Sup. Ct. NY County Feb. 8, 2018).
The United States District Court for the District of New Jersey has held that allegations that a lawyer and his law firm engaged in a fraudulent insurance scheme to induce payment of personal injury protection benefits while representing clients constituted “Professional Legal Services” under the firm’s professional liability policy, triggering the duty to defend. Arzadi v. Evanston Ins. Co., 2018 WL 747379 (D.N.J. Feb. 7, 2018). Moreover, the court determined that the policy’s prior knowledge exclusion did not apply to preclude coverage under the circumstances.