Applying California Law, the United States District Court for the Southern District of California has held that an insurer must pay defense costs contemporaneously, even where the policy’s advancement provision merely requires payment “prior to final disposition of a claim,” because the insured became legally liable for defense costs as they were incurred.  Renovate Am., Inc. v. Lloyd’s Syndicate 1458, 2019 WL 6716735 (S.D. Cal. Dec. 10, 2019).  The court further held that the insured was excused from obtaining the insurer’s prior written consent regarding defense arrangements given the insurer’s seven-month delay in responding to the insured’s initial notice.

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Applying Illinois law, a federal district court has held that a cooperation clause in an excess insurer’s policy did not entitle the excess insurer to compel production of the insured’s settlement agreement with a primary carrier.  Homeland Ins. Co. of N.Y. v. Health Care Serv. Corp., 2019 WL 1499300 (N.D. Ill. Apr. 3, 2019).

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The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, has held that a telephone marketing scam and an internet false advertising scam were not interrelated wrongful acts precluding coverage because the conduct behind the alleged wrongful acts was different. Connect America Holdings, LLC v. Arch Ins. Co., 2016 WL 1254073 (E.D. Pa. Mar. 31, 2016).
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The Colorado Supreme Court has held that an insurer had no duty to cover a settlement entered into by an insured regardless whether the insured’s failure to obtain the insurer’s consent prejudiced it in any way. Travelers Prop. Cas. Co. v. Stresscon Co., 2016 WL 1639565 (Colo. Apr. 25, 2016). Wiley Rein represented an amicus curiae in support of the insurer.
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The Pennsylvania Supreme Court has held that a group of insureds could recover from their insurers for a settlement that was “fair, reasonable and non-collusive” regardless of whether the insureds obtained the insurers’ consent as required by the policies and regardless of whether the insureds failed to show that the insurers acted in bad faith. The Babcock & Wilcox Co. v. Am. Nuclear Insurers, No. 2 WAP 2014 (Pa. July 21, 2015).
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