The Indiana Court of Appeals, applying Indiana law, has held that two lawsuits filed against the NCAA claiming that it and its member schools engaged in anticompetitive conduct detrimental to student-athletes arose from Related Wrongful Acts.  Nat’l Collegiate Athletic Ass’n v. Ace Am. Ins., 2020 WL 3983041 (Ind. Ct. App. July 15, 2020).  Based on this conclusion, the second lawsuit was deemed to be a Claim first made at the time the earlier suit was noticed and no coverage was available under the policies in force when the second suit was filed.

Continue Reading Suits Alleging Anticompetitive Conduct by NCAA Deemed Related

The U.S. Court of Appeals for the Seventh Circuit, applying Illinois law, has held that a written demand for monetary relief, made as part of an ongoing civil proceeding, cannot constitute a second Claim distinct from the Claim already initiated by the civil proceeding itself under a claims-made policy.  Market Street Bancshares, Inc. v. Fed. Ins. Co., 2020 WL 3396303 (7th Cir. June 19, 2020).  The court based its holding on both the policy’s text and the principles underlying claims-made coverage.

Continue Reading “Written Demand” Made Within a “Civil Proceeding” is Not a New Claim

The Pennsylvania Superior Court has held that two men who held senior management roles at a hotel and used their positions to cause the hotel to make payments to a fake company that they created were performing “Professional Services” within the meaning of a professional liability policy while doing so.  Gemini Ins. Co. v. Meyer Jabara Hotels LLC, 2020 WL 1649888 (Pa. Super. Ct. Apr. 3, 2020).  Because the policy excluded coverage for losses arising out of criminal acts committed by employees while rendering Professional Services, the court held that no coverage was available.

Continue Reading Wire Fraud and Money Laundering Can Be “Professional Services” Triggering Criminal Acts Exclusion

On remand from the Tenth Circuit, the United States District Court for the District of Colorado, applying Colorado law, has held that an insurer failed to satisfy its burden of proof on allocation where it neglected to ensure that an arbitration award was sufficiently detailed.  Rockhill Ins. Co. v. CFI-Global Fisheries Mgmt., 2020 WL 996882 (D. Colo. Mar. 2, 2020).  As a result, the District Court entered judgment against the insurer for the full amount of the arbitration award.

Continue Reading Insurer’s Failure to Obtain Allocation in Arbitration Award Results in Coverage for Full Award

The Massachusetts Supreme Judicial Court has held that consent-to-settle clauses in professional liability policies that give the insured absolute discretion regarding settlement do not inherently conflict with the state’s unfair insurance settlement practices statute, Mass. G.L. ch. 176D § 3(9)(f).  Rawan v. Continental Casualty Company, 136 N.E.3d 327 (Mass. Dec. 16, 2019).  The case had attracted considerable attention from amici concerned about potential disruption of the professional liability insurance market in Massachusetts if such consent-to-settle clauses were deemed impermissible.

Continue Reading Massachusetts SJC: E&O Insurers May Allow Insureds to Veto Settlement, But Settlement-Related Duties to Claimants Remain

The United States Court of Appeals for the Eighth Circuit, applying Federal procedural and Minnesota substantive law, affirmed a district court’s conclusion that insured corporate directors failed to carry their burden to establish that their insurer was responsible for 100% of the fees and costs incurred in connection with a suit against the directors, the corporation, and other parties.  Brand v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 2019 WL 3850592 (8th Cir. Aug. 16, 2019).

Continue Reading Declaratory Judgment Pleading and Allocation: Don’t Demand “All or Nothing” Unless You Really Mean It

The United States District Court for the Eastern District of Louisiana, applying Louisiana law, has allowed an insured’s claim against a third party adjuster (TPA) to survive a motion to dismiss, where the insured’s principal support for the claim was its alleged “belief” that the contract between the insurer and the TPA (which defendants declined to provide to the insured) contained a provision stipulating that the contract was for the benefit of insureds.  Hammerman & Gainer, LLC v. Lexington Ins. Co., 2019 WL 2603637 (E.D. La. June 25, 2019).

Continue Reading Court Lets Insured’s Third-Party Beneficiary Claim Proceed Against Adjuster With Which It Had No Contract

The United States District Court for the Western District of Washington, applying Washington law, has held that no Washington state public policy prevents an insurer from enforcing a defense cost recoupment provision.  Massachusetts Bay Ins. Co. v. Walflor Indus., 2019 WL 1651659 (W.D. Wash. Apr. 17, 2019).  The court resolved the issue based on precedent and saw no need to certify the question of the enforceability of such provisions to the Washington Supreme Court as the insured urged.

Continue Reading Defense Cost Recoupment Provisions Enforceable Under Washington Law

The First Circuit, applying Massachusetts law, has held that an SEC investigation was a single claim first made when an insured received the formal order of investigation.  The court rejected the insureds’ attempt to split the investigation into various different claims based on the SEC’s subsequent subpoenas and enforcement action.  Biochemics, Inc. v. Axis Reinsurance Co., 2019 WL 2223125 (1st Cir. May 23, 2019).

Continue Reading SEC Investigation Constitutes One Claim; Component Subpoenas Are Not Written Demands for Non-Monetary Relief