Applying Michigan law, an intermediate court of appeals has held that a professional liability insurer was obligated to cover a claim for breach of duty notwithstanding its relationship to pre-policy period claims because those claims were for return of fees and therefore not covered under the policy and not required to be reported by the insured. Illinois Nat’l Ins. Co. v. AlixPartners LLP, 2019 WL 939018 (Mich. Ct. App. Feb. 26, 2019).
The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, found that an attorney “knew or should have known” he might get sued for (allegedly) botching a settlement term sheet where a worker’s compensation review board publicly criticized his handling of the settlement, even though his client did not appear angry at the time. Zavodnick, Zavodnick & Lasky, LLC v. Nat’l Liab. & Fire Ins. Co., 2019 WL 1003157 (E.D. Pa. Mar. 1, 2019). Because the insured attorney knew the relevant facts before his professional liability policy incepted, the district court granted the insurer’s motion for summary judgment that there was no coverage.
Applying Virginia law, the United States Court of Appeals for the Fourth Circuit has held that a Virginia statute imposing a forty-five day deadline for a coverage denial based on an insured’s breach of a liability policy does not apply to a denial based on a claim reported outside the policy period under a claims made and reported policy. See Gateway Residences at Exchange, LLC v. Illinois Union Ins. Co., 2019 WL 963238 (4th Cir. Feb. 28, 2019).
The U.S. District Court for the Southern District of California, applying California law, has held that neither fiduciary nor employment benefits liability coverage applied to claims seeking benefits under an insured company’s employee benefits plan because the company’s liability arose, not from negligent acts or breaches of fiduciary duty, but from its contractual obligation to provide employees with benefit plans. Erickson-Hall Constr. Co. v. Scottsdale Ins. Co., 2019 WL 719204 (S.D. Cal. Feb. 20, 2019).
Applying Wisconsin law, a federal district court has held that an insurer owed no duty to defend or indemnify its insureds because exclusions for claims arising from violations of securities laws or consumer protection laws, and from the failure of investments to perform as desired, barred coverage. Hanover Ins. Co. v. BMOC, Inc., 2019 WL 949215 (W. D. Wis. Feb. 27, 2019).
The Ninth Circuit, applying California law, has held that an insurer improperly failed to defend its insured in connection with a lawsuit alleging that the insured engaged in an ongoing mortgage modification fraud scheme, because one count in the lawsuit did not require willful conduct and therefore was not necessarily uninsurable under California Insurance Code § 533. First One Lending Corp. v. Hartford Casualty Ins. Co., 2017 WL 1018305 (9th Cir. Mar. 5, 2019). The court further held that a financial services exclusion did not completely bar coverage because at least some allegations bore an “insufficient causal nexus with financial services,” thus triggering the insurer’s duty to defend.
The United States District Court for the Central District of California, applying California law, has held that coverage is unavailable for a whistleblower action and subpoena noticed after the end of the reporting period of a claims-made policy. PAMC, Ltd. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 2019 WL 666726 (C.D. Cal. Feb. 12, 2019).
Applying Colorado law, the United States District Court for the District of Colorado has held that a medical professional liability insurer was entitled to reimbursement of a settlement payment made on behalf of an insured to settle a dispute with a former patient. Evanston Ins. Co. v. Aminokit Labs., Inc., 2019 WL 479204 (D. Colo. Feb. 7, 2019).
A Louisiana federal court has held that settlement of a False Claims Act investigation did not trigger the insuring agreement of a bankers professional liability policy because the claim was not made by a third-party client for acts in rendering or failing to render professional services. Iberiabank Corp. v. Ill. Union Ins. Co., 2019 WL 585288 (E.D. La. Feb. 13, 2019).
The United States District Court for the Central District of California, applying California law, has held that an insurer was not entitled to summary judgment in full, finding that triable issues of fact remained regarding the insurer’s alleged failure to provide an immediate defense to the insured corporation and to assign separate counsel for an insured director. Celerity Educ. Grp. v. Scottsdale Ins. Co., 2019 WL 430497 (C.D. Cal. Feb. 4, 2019).