The United States District Court for the District of Colorado, applying Colorado law, has held that a professional liability insurer was not obligated to defend an attorney accused of discovery misconduct. The court ruled that an order requiring the attorney to show cause why he should not be sanctioned did not seek Damages, as defined in the policy, and fell within an exclusion for claims seeking payment of legal fees and costs. Godin & Baity, LLC v. Markel Ins. Co., Inc., 2020 WL 5076764 (D. Colo. Aug. 27, 2020). The court also addressed and rejected the insured’s “reasonable expectations” argument, as the facts did not satisfy either of the two conditions under which Colorado law recognizes the doctrine.

Continue Reading Sanctions Carve-Out Bars Coverage for Show Cause Order Issued to Attorney

Applying Arizona law, the United States District Court for the District of Arizona held that an insurer that breached its duty to defend bears the burden of demonstrating that an allocation of defense costs between covered and non-covered claims is possible. Tapestry on Cent. Condo. Ass’n. v. Liberty Ins. Underwriters Inc., 2020 WL 4607248 (D. Ariz. Aug. 11. 2020).

Continue Reading Insurer that Breached Duty to Defend Bears Burden on Allocation of Defense Costs

Applying Pennsylvania law, the United States District Court for the Western District of Pennsylvania has held that an insurer wrongfully withdrew its defense after paying a covered verdict because the duty to defend extended until the court deemed the verdict to be “satisfied.”  Highland Park Care Ctr., LLC v. Campmed Cas. & Indem. Co., 2020 WL 2571900 (W.D. Pa. May 21, 2020).  The court also concluded that the policy’s standard-interest clause required the insurer to pay all post-judgment interest on the covered verdict.

Continue Reading Insurer Required to Defend Until “Satisfaction” of Covered Verdict

The United States District Court for the Central District of California has held that California Insurance Code Section 533.5 precludes a duty to defend any claim brought by the California Attorney General under the Unfair Competition Law or False Advertising Law for the recovery of a fine, penalty, or restitution.  Adir Int’l, LLC v. Starr Indem. & Liab. Co., 2019 WL 4462613 (C.D. Cal. Sept. 10, 2019).

Continue Reading No Duty to Defend Claims Brought by California Attorney General Under Unfair Competition or False Advertising Laws

Applying Texas law, the Fifth Circuit has held that a D&O policy’s securities exclusion barred coverage for a suit for misrepresentation and misconduct that arose out of a sale of equity interests.  Gleason v. Markel Am. Ins. Co., 2019 WL 3437642 at *1 (5th Cir. July 30, 2019).

Continue Reading Fifth Circuit Holds Securities Exclusion Bars Coverage for Suit Arising out of Sale of Equity Interests