An Ohio federal court has held that attorneys’ fees awarded under a fee-shifting provision contained in the Individuals with Disabilities Education Act (IDEA) do not constitute covered “damages” under an insurance policy. Wesco Ins. Co. v. Roderick Linton Belfance LLP, 2018 WL 4510093 (N.D. Ohio Sept. 19, 2018).
Four-Month Delay in Sending Reservation of Rights Letter Creates Issue of Fact
Posted in EstoppelThe Supreme Court of Kansas has held that a four-month delay in sending a reservation of rights letter created an issue of fact as to whether the insurer timely reserved its rights. Becker v. The Bar Plan Mut. Ins. Co., 2018 WL 5304671 (Kan. Oct. 26, 2018).
Fourth Circuit Affirms that All Claims Arising from Negligent Design of Two, Nearly Identical Bridges Constitute “Related Claims”
Posted in Related Claims and associated exclusionsIn a win for an insurer represented by Wiley Rein, the United States Court of Appeals for the Fourth Circuit, applying North Carolina law, affirmed that all claims against an engineering firm for the negligent design of two bridges constituted “related claims,” subject to a single limit of liability. Stewart Eng’g, Inc. v. Continental Cas. Co., No. 18-1386 (4th Cir. Nov. 7, 2018). A summary of the district court’s opinion can be found here.
Two Class Action Lawsuits Are “Related,” Despite Different Plaintiffs and Different Time Periods
Posted in Related Claims and associated exclusionsApplying California and Virginia law, a federal district court has held that two class action lawsuits alleging similar wrongful conduct, but brought by different classes for different class periods, were nonetheless related and constituted a single claim. Northrop Grumman Corp. v. AXIS Reinsurance Co., 2018 WL 5314918 (D. Del. Oct. 26, 2018).
Contract Exclusion Precludes Coverage for Breach of Health Management Service Provider Agreement
Posted in Breach of ContractA Texas federal district court, applying Texas law, has held that a contract exclusion in an errors and omissions policy precluded coverage for a suit alleging that the insured breached a contract and committed related misconduct in connection with a contract for providing health management services to a client. Conifer Health Solutions, LLC v. QBE Specialty Ins. Co., 2018 WL 4620613 (E.D. Texas Sept. 26, 2018).
Nebraska Court Rules Injury from Malicious Prosecution Occurs at Time of Charging
Posted in Wrongful ConvictionA Nebraska state trial court, applying Nebraska law, has held that law enforcement liability coverage for malicious prosecution claims is triggered solely when an individual is charged, rejecting several alternate trigger theories put forward by the insured county. Gage Cty., Neb. v. Neb. Intergovernmental Risk Mgmt. Ass’n, No. CI 17-0339 (Neb. Dist. Ct. Oct. 10, 2018). In so holding, the court joined a majority of jurisdictions that have considered the issue.
Monetary Loss from Fraudulent Email Scheme Triggers Coverage Under Business Owners’ Policy
Posted in Cyber Policies and IssuesA Montana federal district court has ruled that a false pretense exclusion did not preclude coverage under a crime policy for monetary losses resulting from a fraudulent email scheme, reasoning that the exclusion was ambiguous. Ad Advert. Design, Inc. v. Sentinel Ins. Co., 2018 WL 4621744 (D. Mont. Sept. 26, 2018). The court also held that further briefing was necessary to determine the amount recoverable under the policy.
Law Firm’s Dispute Over Contingency Fee Does Not Involve Covered Loss
Posted in LossApplying Texas law, the United States Court of Appeals for the Fifth Circuit has held that an insured law firm’s dispute with its clients about the scope of the firm’s contingency fee award did not involve covered Loss. John M. O’Quinn, P.C. v. Lexington Ins. Co., 2018 WL 5075485 (5th Cir. Oct. 18, 2018).
Negligent Supervision of Funds Exclusion Bars Coverage for Trust Investment Losses
Posted in Loss, Professional ServicesThe United States District Court for the Eastern District of Virginia, applying Virginia law, has held that a professional liability policy’s exclusion for “negligent supervision” of funds applied to bar coverage for damages resulting from an insured attorney’s reckless investment of trust assets. ALPS Prop. & Cas. Ins. Co. v. Farthing, 2018 WL 4927366 (E.D. Va. Sept. 26, 2018). The court also held that the insurer was entitled to recoup defense costs paid in the underlying suit.
Alleged Fraudulent Submission of Medicaid Claims Does Not Constitute Rendering or Failure to Render Medical Professional Services
Posted in Professional ServicesApplying North Carolina law, the United States District Court for the Middle District of North Carolina has held that an insurer had no duty to defend or indemnify an insured for a qui tam action alleging false Medicaid reimbursement submissions because the suit failed to allege a claim arising out of the rendering of or failure to render medical professional services. Affinity Living Grp., LLC v. StarStone Specialty Ins. Co., 2018 WL 4854650 (M.D.N.C. Oct. 5, 2018).