The United States District Court for the District of Hawaii, applying Hawaii law, has held that a claims-made policy did not provide coverage for damages awarded in a final judgment for an underlying lawsuit because the claims in that lawsuit were first made prior to the policy period. Greenspon v. AIG Specialty Ins. Co., 2020 WL 1917333 (D. Haw. Apr. 20, 2020).
Continue Reading No Coverage for Judgment Premised on Same Facts Asserted in Suit Filed Prior to Policy Period
Applying Illinois law, a federal district court has held that an insurer had no duty to defend or indemnify an insured for a lawsuit that derived in part from facts or circumstances that were the subject of an EEOC charge filed during a prior policy period. U.S. Specialty Ins. Co. v. Village of Melrose Park, 2020 WL 1923076 (N.D. Ill. April 21, 2020).
Continue Reading No Duty to Defend or Indemnify Lawsuit Overlapping With Prior EEOC Charge
Applying North Carolina law, the United States District Court for the Eastern District of North Carolina has held that an insurer did not breach its D&O policy by denying coverage for (i) a putative class action complaint that did not name the insured company; (ii) a subpoena duces tecum served on the insured in connection with the class action that did not satisfy the policy’s definition of “Claim;” (iii) a settlement that the insured was not required to participate in and to which the insurer did not consent; and (iv) a written indemnification demand implicating the policy’s contractual liability exclusion. Trialcard Inc. v. Travelers Cas. & Surety Co. of Am., 2020 WL 1609483 (E.D.N.C. Apr. 1, 2020). The court further held that any “Claim” asserted against the insured would otherwise be barred by the policy’s professional services exclusion.
Continue Reading Suit Against “Doe” Defendant is Not a “Claim”
The United States District Court for the Northern District of Illinois, applying Illinois law, has held that there is no coverage under a D&O policy where the insured did not timely report a declaratory judgment lawsuit and instead sought coverage only after an amended complaint was filed in the successive policy period. Hanover Ins. Co. v. R.W. Dunteman Co., 2020 WL 1275002 (N.D. Ill. Mar. 17, 2020). The court held that the complaints were part of a single “claim” and not separate “claims” even though the amended complaint added insured defendants and theories of liability.
Continue Reading Declaratory Judgment Complaint Constitutes a Reportable Claim for a Wrongful Act; Subsequent Amended Complaint Adding Insured Defendants Not a Separate Claim
The United States Court of Appeals for the First Circuit, applying Massachusetts law, has held that an SEC investigation of the insured company constituted a claim “first made” when the SEC’s formal order of investigation issued. Jalbert v. Zurich Servs. Corp., No. 18-2244, 2020 WL 1322787 (1st Cir. March 20, 2020). As a result, two excess insurers whose policies incepted after the formal order entered did not owe coverage. Wiley represented one of the prevailing carriers.
Continue Reading SEC Investigation Is a Claim First Made When Formal Order of Investigation Issues
Applying New York law, the United States District Court for the Southern District of New York has held that, because a subpoena duces tecum previously issued to the insured by a post-judgment creditor of a non-insured entity was not a “Claim” against the insured, the subpoena and a later-filed lawsuit against the insured could not qualify as “Related Claims” deemed first made when the subpoena was issued. Protective Specialty Ins. Co. v. Castle Title Ins. Agency, Inc., 2020 WL 550700 (S.D.N.Y. Feb. 3, 2020). The court also held that the “warranty exclusion” in the application for the policy (in which the insured warranted that it was “not aware of any incident or circumstance which may result in a claim”) did not bar coverage for the lawsuit, even though the insured failed to disclose the subpoena in the application.
Continue Reading Subpoena Not a ‘Claim’ When Issued in Litigation Not Involving Insured’s Professional Services
In a win for Wiley Rein’s client, the United States District Court for the Southern District of Florida, applying Florida law, held that, as a matter of law, a lawsuit against an engineer arising out of three alleged errors in connection with a construction project constituted a single “claim” under the engineer’s claims-made-and-reported architects and engineers policies. Nova Southeastern Univ., Inc. v. Continental Cas. Co., No. 18-CIV-61842-RAR (S.D. Fla. Dec. 27, 2019). Furthermore, the court held that the policies’ prior knowledge and prior notice provisions separately and independently barred coverage for the lawsuit.
Continue Reading Lawsuit Arising Out of Three Design Errors is a Single “Claim,” and Prior Knowledge and Prior Notice Provisions Bar Coverage
Applying Ohio law, a federal district court has held that misrepresentations in an application warranty statement regarding three unreported lawsuits filed against the insured during the initial policy period rendered a renewed claims-made and reported policy void ab initio. Certain Underwriters at Lloyds London Subscribing to Policy No. HMPL 18-0164 & HMPL 17-0158 v. KG Admin. Servs., Inc., 2019 WL 6770061 (N.D. Ohio Dec. 12, 2019). The court also held that, because the claims were not reported during the initial policy period, the insurer did not have any coverage obligations under the initial policy.
Continue Reading Concealment of Pending Lawsuits in Renewal Application Voids Policy
In a win for an insurer represented by Wiley Rein, the United States District Court for the District of Maryland has held that an intra-corporate dispute between shareholders was not covered under an EPL insuring agreement because the underlying demand letter and complaint did not state a claim “for” an Employment Practices Wrongful Act, and it was not covered under a D&O insuring agreement because the claimant owned 10% or more of the outstanding shares of the insured company at the time the claim was made. Madison Mechanical, Inc. v. Twin City Fire Ins. Co., 2019 WL 6035690 (D. Md. Nov. 14, 2019).
Continue Reading No EPL or D&O Coverage for Intra-Corporate Shareholder Dispute
The Delaware Supreme Court has held that D&O policies do not afford coverage for an underlying lawsuit asserting causes of action for breach of fiduciary
Continue Reading Delaware Supreme Court Holds Trustee Action Alleging Breach of Fiduciary Duty, Unlawful Dividend, and Fraudulent Transfer Is Not a “Securities Claim”