A Texas court of appeals found no coverage under two excess directors and officers liability policies for an appraisal action brought by dissenting shareholders to a merger pursuant to Section 262 of the Delaware General Corporation Law.  Zale Corp. v. Berkley Ins. Co., 2020 WL 4361942 (Tex. Ct. App. July 30, 2020).  The court held that the litigation right created by the appraisal statute turns on the act of executing the merger and not on any “wrongful act” preceding the merger.  Thus, because the merger was consummated after the policy period, there was no “wrongful act” during the policy period sufficient to trigger coverage for the appraisal suits.

Continue Reading Texas Court Holds “Instrumental Act” in Appraisal Litigation is Execution of Merger

The United States District Court for the District of Connecticut, applying Connecticut law, has denied cross-motions for summary judgment, finding that fact issues remain with regard to whether the insured reasonably could have expected a pre-policy period enforcement notice to give rise to claim.  Wallingford Grp., LLC v. Arch Ins. Co., 2020 WL 4464629 (D. Conn. May 11, 2020).

Continue Reading Fact Issues Preclude Summary Judgment on Prior Knowledge Exclusion

The United States Court of Appeals for the Eleventh Circuit, applying Georgia law, has held that an insurer has a duty to defend a lawsuit where an award of attorneys’ fees might constitute covered “Loss,” even though the lawsuit did not otherwise seek covered amounts.  AEGIS Elec. & Gas Int’l Serv. Ltd. v. ECI Mgmt. LLC, No. 19-11114, 2020 WL 4359610 (11th Cir. July 30, 2020).

Continue Reading 11th Circuit Holds Insurer Must Defend Lawsuit Where Award of Attorneys’ Fees Was the Only Potentially Covered Relief

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).

Continue Reading No Coverage for Conduct Performed By Attorney In Uninsured Capacity

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).

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.”

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).

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).

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).

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).

Continue Reading Question of Fact When “Claim” “First Made” Where Insured Allegedly Did Not Become Aware of Claim Until After Policy Period