Emily S. Hart

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The U.S. Court of Appeals for the Eighth Circuit, applying Kansas law, has held that a contract exclusion bars coverage for a lawsuit asserting claims for conversion and breach of fiduciary duty for failure to purchase a deceased owner’s stock under a stock repurchase agreement.  Russell v. Liberty Ins. Underwriters, Inc., 2020 WL 812910 (8th Cir. Feb. 19, 2020).  The court also held that the agreement was not an employee benefit plan that would implicate fiduciary liability coverage.
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In a win for Wiley Rein’s client, the U.S. Court of Appeals for the Second Circuit, applying Connecticut law, has held that no coverage is available for a lawsuit seeking recovery of disputed legal fees because the relief sought does not constitute covered “damages” and because the insured was not performing “legal services.”  Continental Cas. Co. v. Parnoff, 2019 WL 6999867 (2d Cir. Dec. 20, 2019).
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The United States District Court for the District of Minnesota, applying Minnesota law, has held that coverage is unavailable where the insured failed to report the claim to its insurer “as soon as practicable” as required by the policy’s notice provision.  Citizens Ins. Co. of Am. v. Assessment Sys. Corp., 2019 WL 4014955 (D. Minn. Aug. 26, 2019).
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The United States District Court for the Eastern District of Arkansas, applying Arkansas law, has held that coverage is unavailable for a lawsuit arising out of Interrelated Wrongful Acts at issue in an EEOC charge where the insured failed to report the EEOC charge to its insurer within the claims-made policy’s reporting period.  Pine Bluff Sch. Dist. v. ACE Am. Ins. Co., 2019 WL 3074011 (E.D. Ark. July 12, 2019).  The court also held that the insurer was not barred from denying coverage based on waiver or estoppel after it first provided a defense under a reservation of rights.
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The United States District Court for the Northern District of Illinois, applying Oklahoma law, has held that the insured bears the burden of demonstrating that an exception to an otherwise applicable exclusion applies to restore coverage.  World Water Works Holdings, Inc. v. Continental Cas. Co., 2019 WL 2576560 (N.D. Ill. June 24, 2019).
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The United States Court of Appeals for the Ninth Circuit, applying California law, has affirmed the district court’s holding that a specific matter exclusion bars coverage for a series of lawsuits involving the same parties as a lawsuit included in the policy’s definition of “Specific Matter” in that exclusion.  Ocean Towers Hous. Corp. v. Evanston Ins. Co., 2019 WL 2484415 (9th Cir. June 14, 2019).
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In a win for Wiley Rein’s client, a New York appellate court has held that a program of asset management liability insurance afforded no coverage for a UK regulatory “Warning Notice” because the notice and a previous notice issued by the same regulator to the same targets arising from the same transaction involved “Related Wrongful Acts” and therefore constituted a single claim first made prior to inception of the relevant policies.  Berkshire Hathaway Specialty Ins. Co. v. H.I.G. Capital, LLC, 2019 WL 2179145 (N.Y. App. Div. May 21, 2019).  In addition, the court held that the policies’ prior notice exclusion applied to bar coverage.
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The United States District Court for the Central District of California, applying California law, has held that an insured is entitled to independent counsel where an insurer’s coverage action turns on facts that overlap with facts that might establish an insured’s liability in the underlying lawsuit.  Aspen Am. Ins. Co. v. Ou, 2019 WL 1950293 (C.D. Cal. Mar. 14, 2019).
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