The United States District Court for the Southern District of Ohio, applying Ohio law, has held that an ERISA exclusion in two E&O policies barred coverage for a lawsuit filed by the United States Department of Labor alleging ERISA violations in connection with an employee stock ownership program (ESOP) stock purchase. Gemini Ins. Co. v. Potts, 2020 WL 4000977 (S.D. Ohio July 15, 2020).
Continue Reading ERISA Exclusion in E&O Policies Bars Coverage for Suit Filed by the Department of Labor
Applying Oklahoma law, the United States District Court for the Western District of Oklahoma has held that no coverage is available for a lawsuit involving an equity holder in an investment agreement because the action did not involve a “Wrongful Act” in an individual’s capacity as “an Insured Person.” Turner v. XL Specialty Ins. Co., 2020 WL 3547954 (W.D. Okla. June 10, 2020). The court further held that the insured did not satisfy his burden of proving that his legal costs were “Defense Expenses” even though he was nominally a “defendant” in the suit.
Continue Reading No Coverage for Affirmative Lawsuit Challenging Distribution of Proceeds From Sale of Investment Assets
Applying Pennsylvania law, the United States District Court for the Eastern District of Pennsylvania has held that no coverage is available under a professional liability policy for a lawsuit alleging human trafficking, wage and hour, and consumer protection violations because all counts rested on intentional conduct that occurred after professional services were rendered. Hemphill v. Landmark Ins. Co., 2020 WL 3871295 (E.D. Pa. July 9, 2020).
Continue Reading No Coverage for Lawsuit Alleging Human Trafficking and Wage and Hour Violations
The Georgia Court of Appeals has held that correspondence to an insured attorney from a former client’s new counsel potentially alluding to a malpractice suit did not constitute a claim and that questions of fact remained as to whether the correspondence gave the insured a basis to reasonably expect a claim. Joseph v. Certain Underwriters at Lloyd’s London, 2020 WL 3168543 (Ga. Ct. App. June 15, 2020).
Continue Reading Pre-Policy Period Letters to Disqualified Counsel from Claimant’s New Attorney are Not a Claim or A Prior Incident that Could be the Basis for a Claim
Applying Pennsylvania law, the United States District Court for the Western District of Pennsylvania has held that an insurer wrongfully withdrew its defense after paying a covered verdict because the duty to defend extended until the court deemed the verdict to be “satisfied.” Highland Park Care Ctr., LLC v. Campmed Cas. & Indem. Co., 2020 WL 2571900 (W.D. Pa. May 21, 2020). The court also concluded that the policy’s standard-interest clause required the insurer to pay all post-judgment interest on the covered verdict.
Continue Reading Insurer Required to Defend Until “Satisfaction” of Covered Verdict
The United States District Court for the Eastern District of Kentucky, applying Kentucky law, has held that an insurer had no duty to defend or indemnify its insured given the applicability of the policy’s “contractual liability” exclusion to the claims at issue. See Global Holdings, LLC v. Navigators Mgmt. Co., 2020 WL 3065914 (E.D. Ky. June 9, 2020).
Continue Reading Contract Exclusion Bars Coverage for Class Action
The United States Court of Appeals for the Ninth Circuit, applying California law, has held that two exclusions in a D&O policy applicable to claims by employees and for Fair Labor Standards Act violations barred coverage for a wage-and-hour class action lawsuit. U.S. Telepacific Corp. v. U.S. Specialty Ins. Co., 2020 WL 3265238 (9th Cir. June 17, 2020).
Continue Reading EPL Exclusions in D&O Policy Barred Coverage for Wage-and-Hour Class Action
The Illinois Court of Appeals, applying Illinois law, affirmed a trial court’s ruling that an insurer did not act in bad faith by denying coverage where there was a “bona fide” coverage dispute concerning an underlying lawsuit against the insured. Nine Grp. II, LLC v. Liberty Int’l Underwriters, Inc., 2020 Ill. App. WL 190320 (Ill. Ct. App. Jun. 18, 2020). The court held that the trial court had correctly refused to award certain costs to the insured under an Illinois statute applicable where an insurers’ conduct is “vexatious and unreasonable.”
Continue Reading Illinois Court of Appeals Rules Insurer Did Not Act in Bad Faith in Denying Coverage Where Claim Was Made Before Policy Period
Applying Iowa law, a federal district court has held that an insurer did not act in bad faith when denying coverage for expenses relating to an ERISA lawsuit because the claim turned on an unsettled question of Iowa law. Telligen, Inc. v. Atlantic Specialty Ins. Co., 2020 WL 3399916 (S.D. Iowa Apr. 16, 2020).
Continue Reading Insurer Did Not Act in Bad Faith by Denying Coverage for Claim that Turned On Unsettled Question of Law
A New Jersey federal district court has ruled that a broad exclusion in a D&O Policy for claims arising out of services provided to third parties barred coverage for a claim arising out of an insured’s provision of services to its client, and the inclusion in the policy of narrower exclusions (for professional services and insurance company services) did not create any ambiguity. Benecard Servs., Inc. v. Allied World Specialty Ins. Co., 2020 WL 2842570 (D.N.J. May 31, 2020).
Continue Reading D&O Policy’s “Third-Party Services” Exclusion Bars Coverage for Claim Brought by Insured’s Client