By Hume Ross on Posted in Dishonesty ExclusionApplying California law, the United States Court of Appeals for the Ninth Circuit affirmed a federal district court decision which held that a deceptive business practices exclusion in an errors and omissions policy did not bar coverage for a suit alleging the insured real estate broker received kickbacks, because two of the causes of action… Continue Reading
By Emily S. Hart on Posted in Dishonesty Exclusion,Prior Knowledge/Warranty Exclusion,Professional ServicesThe United States District Court for the District of New Jersey has held that allegations that a lawyer and his law firm engaged in a fraudulent insurance scheme to induce payment of personal injury protection benefits while representing clients constituted “Professional Legal Services” under the firm’s professional liability policy, triggering the duty to defend. Arzadi… Continue Reading
By Emily S. Hart on Posted in Dishonesty Exclusion,Personal Profit/Advantage exclusion,Professional ServicesApplying Colorado law, the United States District Court for the District of Colorado has held that allegations of collusion to fix wages in violation of the Sherman Antitrust Act do not fall within the scope of professional liability coverage for “counseling” services because “counseling” does not include an alleged agreement to fix wages. Colony Ins.… Continue Reading
By Emily S. Hart on Posted in Defense Costs,Dishonesty Exclusion,Prior Knowledge/Warranty ExclusionApplying Illinois law, the United States Court of Appeals for the Seventh Circuit has held that an insurer who initially refused to defend its insured and waited five years to bring an action for declaratory relief was precluded from raising policy defenses to indemnity. Title Indus. Assurance Co. v. First American Title Ins. Co., 2017… Continue Reading
By Jessica N. Gallinaro on Posted in Dishonesty ExclusionThe California Court of Appeal has held that an exclusion requiring repayment to the insurer upon a “final determination” of the insured’s culpability applies only after the insured’s direct appeals have been exhausted, and therefore the insurer was obligated to pay the insured’s litigation expenses in an appeal of the underlying litigation. Stein v. AXIS… Continue Reading
By Nicole Audet Richardson on Posted in Dishonesty ExclusionThe United States District Court for the Northern District of California has held that a deceptive practices exclusion contained in an errors and omissions policy issued to a real estate brokerage did not bar coverage for a suit alleging the brokerage engaged in a kickback scheme with a vendor because two causes of action asserted… Continue Reading
By Matthew W. Beato on Posted in Dishonesty ExclusionThe Delaware Superior Court, purporting to apply Delaware and California law, has held that there was no “final adjudication” for purposes of triggering a conduct exclusion where the parties to the underlying action settled after the court issued an interlocutory memorandum opinion containing findings of fraud. Arch Ins. Co. v. Murdock, 2016 WL 7414218 (Del.… Continue Reading
By Margaret Thomas on Posted in Dishonesty Exclusion,Wrongful ActThe Court of Appeals of Indiana, applying Indiana law, has held that an insurer had no duty to defend its insured against a complaint alleging only intentional misconduct where the policy covered only negligent acts, errors and omissions. Mt. Vernon Fire Ins. Co. v. Louis Jancetic, 2016 WL 6584268 (Ind. Ct. App. Nov. 4, 2016). … Continue Reading
By Leland H. Jones, IV on Posted in Defense Costs,Dishonesty Exclusion,Excess insurance/exhaustion,LossThe California Court of Appeal has held that an errors and omissions insurer had a duty to defend lawsuits seeking amounts owed under contract because the lawsuits potentially sought non-contractual damages for breach of fiduciary duty and non-disclosure. Health Net, Inc. v. Am. Int’l Spec. Ins. Co., 2016 Cal. App. Lexis 7296 (Cal. Ct. App.… Continue Reading
By Jennifer A. Williams on Posted in Dishonesty Exclusion,Loss,Public Policy prohibition on insuranceThe U.S. District Court for the Middle District of Pennsylvania, predicting Pennsylvania law, has held that restitution for criminal acts is uninsurable as a matter of public policy. Darwin Nat’l Assurance Co. v. Luzerne Cty. Transp. Auth., 2016 WL 1242283 (M.D. Pa. Mar. 30, 2016). The court accordingly found that criminal proceedings against a public… Continue Reading
By Edward R. Brown on Posted in Dishonesty Exclusion,Notice of ClaimAn Oklahoma federal district court has held that an insurer properly denied coverage for a lawsuit because notice to the insurer of an earlier suit seeking temporary injunctive relief did not also qualify as notice of the later suit involving the same conduct and seeking damages. Thames v. Evanston Ins. Co., 2015 WL 7272214 (N.D.… Continue Reading
By Milad Emam on Posted in Dishonesty ExclusionApplying New York law, the United States District Court for the Northern District of New York has held that a dishonesty exclusion bars coverage for a claim alleging that a law firm representing the sellers of an inn fraudulently induced the underlying claimants to extend a loan to the inn’s purchaser. Lewis & Stanzione v.… Continue Reading
By Nicole Audet Richardson on Posted in Defense Costs,Dishonesty ExclusionA New York appellate court has affirmed a trial court’s application of a fraud exclusion and order requiring the insured to reimburse defense costs where the insured had been convicted and sentenced for fraud, holding that the insured’s pending appeal did not change the finality of the criminal judgment. Dupree v. Scottsdale Ins. Co., 2015… Continue Reading
By Jennifer A. Williams on Posted in Dishonesty Exclusion,Professional ServicesThe U.S. Bankruptcy Court for the Middle District of Florida, applying Florida law, has held that a dishonesty exclusion precludes coverage for a claim under a professional liability policy issued to a trusts and estates attorney who made fraudulent representations and abused his fiduciary position to obtain an exorbitant fee from an estate. Fla. Lawyers… Continue Reading
By Bonnie Thompson on Posted in Bankruptcy,Dishonesty Exclusion,Professional ServicesThe United States Bankruptcy Court for the Middle District of Florida has held that an attorney’s overbilling stemming from fraudulent misrepresentations likely involved “professional services” under a lawyers’ professional liability policy but coverage was barred, in any event, under the policy’s exclusion for “criminal, dishonest, intentional, malicious or fraudulent act(s).” Fla. Lawyers Mut. Ins. Co.… Continue Reading
By Leland H. Jones, IV on Posted in Dishonesty ExclusionThe Pennsylvania Superior Court has held that a fraud exclusion bars coverage for a suit in which the trial court found that the insured committed fraud and the court’s ruling was upheld on appeal. Cigna Corp. v. Exec. Risk. Indem. Co., 2015 WL 836933 (Pa. Super. Ct. Feb. 27, 2015).… Continue Reading
By Karen L. Toto on Posted in Dishonesty Exclusion,LossA New York state intermediate appellate court has held that SEC administrative orders and related settlements do not trigger the final adjudication language in a policy’s dishonesty exclusion because the orders expressly stated that the insured did not admit any of the alleged wrongdoing. J.P. Morgan Securities Inc. v. Vigilant Ins. Co., 2015 WL 175512 (N.Y.… Continue Reading
By Executive Summary on Posted in Dishonesty ExclusionAn Illinois federal court has held that a fraud exclusion applied to an underlying complaint alleging counts for violations of the federal Racketeer Influenced Corrupt Organizations (RICO) Act and for common law fraud. Gen. Star Nat. Ins. Co. v. Adams Valuation Corp., 2014 WL 4783027 (N.D. Ill. Sept. 23, 2014). Notably, the exclusion did not… Continue Reading
By Executive Summary on Posted in Dishonesty Exclusion,Personal Profit/Advantage exclusion,Prior Knowledge/Warranty ExclusionA federal district court, applying Virginia law, has held that an insurer entitled to recoup defense expenses also was entitled to pre-judgment interest on its payments. Protection Strategies, Inc. v. Starr Indemn. & Liab. Co., No. 1:13-CV-00763 (E.D. Va. Aug. 18, 2014). Wiley Rein LLP represents the insurer.… Continue Reading
