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The United States District Court for the Northern District of West Virginia, applying West Virginia law, has held that an insurer had no duty to defend or indemnify its insured because two exclusions and the definitions of “damages” and “claim” each separately precluded coverage of a claim for a client’s lost settlement funds under the lawyer’s professional liability policy.  ALPS Prop. & Cas. Ins. Co. v. Murphy, 2020 WL 4141987 (N.D. W. Va. July 20, 2020).
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Continue Reading No Coverage under Lawyer’s Professional Liability Policy for Client’s Lost Settlement Funds

Applying Kentucky law, a federal district court has held that a subpoena issued to an insured company was not a “Claim” under a D&O policy’s Side B coverage because the subpoena failed to identify an “Individual Insured.”  Springstone, Inc. v. Hiscox Ins. Co., 2020 WL 4506097 (W.D. Ky. Aug. 5, 2020).  The court also held that no coverage was available to the entity because coverage was barred by an exclusion for any Claim “seeking fines or penalties or non-monetary relief against the Company.”
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Continue Reading Government Subpoena Issued to Insured Company Not a “Claim” Against Individual Insured

The United States District Court of Connecticut, applying federal law, has denied an insured’s motion to dismiss or stay the insurer’s first-filed declaratory judgment action in deference to a subsequently filed, substantially similar coverage action filed by the insured in California state court, holding that the relevant factors weighed in favor of retaining jurisdiction over the first-filed declaratory judgment action.  Continental Cas. Co. v. Phoenix Life Ins. Co., No. 19-cv-1448 (D. Conn. August 10, 2020).
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Continue Reading Connecticut Federal Court Declines to Dismiss First-Filed Declaratory Judgment Action in Deference to Insured’s California State Court Action

Applying Texas law, the United States District Court for the Eastern District of Texas granted an insurer’s motion to dismiss where an insured sought fiduciary liability coverage for amounts it paid to defend and indemnify the trustee for the insured company’s Stock Option Plan under an agreement between the two.  Martin Resource Mgmt. Corp. v. Fed. Ins. Corp., No. 6:20-cv-00083, 2020 WL 4550395 (E.D. Tex. Aug. 6, 2020).
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Continue Reading Indemnification Demands Made by Stock Option Plan Trustee Not “Fiduciary Claims” for “Wrongful Acts”

The United States District Court for the Southern District of Florida, applying Michigan law, has ruled that an insurer did not owe an attorney and his firm a duty to defend under a professional liability policy because, among other things, the conduct at issue in an underlying action brought by a former client was undertaken in an uninsured capacity for a firm that was neither identified in the insurance application nor named as an insured in the policy. Wesco Ins. Co. v. Repasky, 2020 WL 3129145 (S.D. Fla. June 12, 2020).
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Continue Reading No Coverage for Conduct Performed By Attorney In Uninsured Capacity

The U.S. District Court for the Northern District of Illinois, applying Illinois law, has concluded that a question of fact exists regarding when a “claim” was “first made” where the recipient of a “claim” sent via email allegedly did not become aware of the claim until days after it was received in the recipient’s inbox, after the end of the policy period.  Lloyd’s Syndicate 3624 (Hiscox) v. Clow, 2020 WL 4194213 (N.D. Ill. July 21, 2020).
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Continue Reading Question of Fact When “Claim” “First Made” Where Insured Allegedly Did Not Become Aware of Claim Until After Policy Period

A Vermont federal court has held that a suit seeking “benefits [the insured] promised but failed to provide” sought amounts that fell within an exception for “restitution” from the definition of “damages” covered under an E&O policy.  James River Ins. Co. v. Inn-One Home, LLC, 2020 WL 3415627 (D. Vt. June 22, 2020).
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Continue Reading Benefits the Insured Promised But Failed to Provide Constitute Non-Covered Restitution

The Indiana Court of Appeals, applying Indiana law, has held that two lawsuits filed against the NCAA claiming that it and its member schools engaged in anticompetitive conduct detrimental to student-athletes arose from Related Wrongful Acts.  Nat’l Collegiate Athletic Ass’n v. Ace Am. Ins., 2020 WL 3983041 (Ind. Ct. App. July 15, 2020).  Based on this conclusion, the second lawsuit was deemed to be a Claim first made at the time the earlier suit was noticed and no coverage was available under the policies in force when the second suit was filed.
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Continue Reading Suits Alleging Anticompetitive Conduct by NCAA Deemed Related

The U.S. Court of Appeals for the Seventh Circuit, applying Illinois law, has held that a written demand for monetary relief, made as part of an ongoing civil proceeding, cannot constitute a second Claim distinct from the Claim already initiated by the civil proceeding itself under a claims-made policy.  Market Street Bancshares, Inc. v. Fed. Ins. Co., 2020 WL 3396303 (7th Cir. June 19, 2020).  The court based its holding on both the policy’s text and the principles underlying claims-made coverage.
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Continue Reading “Written Demand” Made Within a “Civil Proceeding” is Not a New Claim

The United States District Court for the Southern District of Ohio, applying Ohio law, has held that an ERISA exclusion in two E&O policies barred coverage for a lawsuit filed by the United States Department of Labor alleging ERISA violations in connection with an employee stock ownership program (ESOP) stock purchase.  Gemini Ins. Co. v. Potts, 2020 WL 4000977 (S.D. Ohio July 15, 2020).
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Continue Reading ERISA Exclusion in E&O Policies Bars Coverage for Suit Filed by the Department of Labor