Ruling in favor of Wiley Rein’s client—a primary D&O insurer—and two excess insurers, the U.S. Court of Appeals for the First Circuit today held that a broadly worded specific litigation exclusion bars coverage for a series of lawsuits, regulatory investigations, and arbitrations filed against the insured, a Puerto Rico subsidiary of UBS, because the matters all involve facts, situations, or circumstances alleged in the prior claims listed in the exclusion. UBS Financial Servs. Inc. v. XL Specialty Ins. Co., No. 18-1148 (1st Cir. July 3, 2019).

Continue Reading First Circuit Holds UBS Puerto Rico Bond Claims Barred by Specific Litigation Exclusion

Giving a major win to several religiously-affiliated health care systems, the United States Supreme Court unanimously held on June 5 that pension plans maintained by certain church-associated organizations qualify as ERISA-exempt “church plans,” whether or not a church first established the plans. Advocate Health Care Network v. Stapleton, No. 16-74 (June 5, 2017). Plaintiffs around the country have alleged that pension plans for employees of several hospitals were not exempt “church plans” because the statutory definition requires that such plans be “established and maintained . . . by a church.” ERISA was amended to state that a plan “established and maintained . . . by a church” includes a plan maintained by a so-called “principal-purpose organization” controlled by or associated with a church which has as its principal purpose the administration or funding of the plan. The court interpreted this amendment to mean that plans maintained by such “principal-purpose organizations” are exempt from ERISA even if the plans were not originally established by a church.

Continue Reading U.S. Supreme Court: ERISA “Church Plan” Exception Applies to Any Benefit Plan Maintained by Certain Church-Associated Organizations

The United States Court of Appeals for the Third Circuit has held that a bank’s $102 million payments to settle lawsuits alleging improper collection of overdraft protection fees are not covered “Damages” under the bank’s professional liability insurance policies. The PNC Financial Services Group, Inc. v. Houston Cas. Co., WL 2016 1730734 (3d Cir. May 2, 2016). Applying Pennsylvania law, the court also reversed the District Court’s finding that plaintiffs’ attorneys’ fees awarded out of the settlement funds were covered. Wiley Rein represents the insurer in the litigation.
Continue Reading Bank Settlements Returning Overdraft Fees—Including Plaintiffs’ Attorneys’ Fee Awards—Are Not “Damages”

The Supreme Court of New Jersey has held that a rescinded medical malpractice liability policy should not be reformed to require the insurer to defend and indemnify up to the state mandatory minimum amount of coverage in order to protect innocent third-party claimants whose claims arose prior to rescission. DeMarco v. Stoddard, 2015 WL 7722997 (N.J. Dec. 1, 2015).
Continue Reading New Jersey High Court Retroactively Applies Rescission of Medical Malpractice Policy

An Indiana appellate court has held that an insured attorney knew or reasonably should have  known a potential malpractice claim could be made at the time he renewed his malpractice policy even though an intermediate appellate court had reversed an order that dismissed his client’s claim due to the attorney’s alleged negligence in responding to discovery. The Bar Plan Mut’l Ins. Co. v. Likes Law Office, LLC, 2015 WL 6023075 (Ind. Ct. App. Oct. 15, 1995). The court also held that the trial court abused its discretion by permitting expert testimony that made ultimate legal conclusions prefaced only by a reference to unspecified “custom and practice of the professional liability insurance and underwriting industry.”
Continue Reading Attorney Cannot Wait on Outcome of Appeal to Report Dismissal of Client’s Claim Due to Malpractice

Applying New Jersey law, a New Jersey federal court has found that a letter to an insured law firm referencing an “action against the Firm for damages” arising out of the firm’s actions and requesting that the firm put its insurer on notice constituted a “claim” made prior to the inception of the firm’s claims-made professional liability policy. Innes v. St. Paul Fire & Marine Ins. Co., 2015 WL 5334580 (D.N.J. Sept. 11, 2015). The court also found that the letter demonstrated that the firm had knowledge prior to the policy period of an act, error or omission that might reasonably be expected to result in a claim, barring coverage for the dispute.
Continue Reading Even Without Express Demand for Money, Pre-Policy Period Letter is a “Claim”

The United States Court of Appeals for the Eighth Circuit has held that the undefined term “claim” in a claims-made liability insurance policy included a spreadsheet detailing monetary damages based on failures of the policyholder’s products. Ritrama, Inc. v. HDI-Gerling Am. Ins. Co., No. 2015 WL 4730916 (8th Cir. Aug. 11, 2015).
Continue Reading Spreadsheet Listing Asserted Damages is a “Claim”

A California federal court permitted an excess D&O liability insurer to pursue equitable subrogation against a later excess carrier to recover its contribution to a settlement of securities litigation after a finding that the securities litigation was first made during the later carrier’s policy period. Genesis Ins. Co. v. Magma Design Automation, Inc., 2015 WL 4128986  (N.D. Cal. July 8, 2015).
Continue Reading Equitable Subrogation Allows Excess Insurer to Recover Settlement Contribution from Later Insurer After Proper Policy Period Is Determined

A Texas appellate court has held that an endorsement to a “follow form” excess liability policy caused the policy to follow only the definitions, exclusions, and limitations of the primary policy, but not its claim reporting requirement. Illinois Union Ins. Co. v. Sabre Holdings Corp., 2015 WL 3917981 (Tex. Ct. App. June 25, 2015). The court therefore rejected the excess insurer’s late notice defense.
Continue Reading “Regardless of Any Apparent Intent,” Excess Policy Does Not Follow Notice Condition of Primary Policy