The United States District Court for the Northern District of Alabama has held that alleged constitutional due process violations under 42 U.S.C. § 1983 do not constitute professional services “caused by the negligence” of an insured.  Madison County v. Evanston Ins. Co., 2018 WL 4680213 (N.D. Ala. Sept. 28, 2018).

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The United States District Court for the Northern District of Ohio has held that a bodily injury exclusion did not preclude coverage for a wrongful death suit, reasoning that the death did not cause the alleged wrongful conduct and therefore did not “arise out of” it.  Clarendon Nat’l Ins. Co. v. Lexington Ins. Co., 312 F. Supp. 3d 639 (N.D. Ohio 2018).  The court also held that the assault at issue was not “discovered” for purposes of triggering coverage until the underlying claimants learned of the alleged wrongful conduct at issue.

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On a certified question from the U.S. District Court for the Northern District of Georgia, the Supreme Court of Georgia has held that the traditional rule of pro rata allocation of coverage applied when two policies’ “other insurance” provisions conflict, regardless of the fact that one of the coverages was from a state-regulated insurance program.  Nat’l Cas. Co. v. Ga. Sch. Bds. Ass’n-Risk Mgmt. Fund, 2018 WL 3850936 (Ga. Aug. 14, 2018).

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The United States Court of Appeals for the Tenth Circuit, applying New Mexico law, has held that a sub-contractor’s insurer had a duty to defend and indemnify a general contractor named as an additional insured in a wrongful death suit and that the sub-contractor’s insurance policy was primary to the general contractor’s own policy.  First Mercury Ins. Co. v. Cincinnati Ins. Co., 882 F.3d 1289 (10th Cir. Feb. 26, 2018).

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A federal court in South Carolina has held that an insurer breached its contract with its insured by not paying the full policy limits even though its policy included an “other insurance” clause and there was another insurance policy that potentially covered the same loss.  Michelin North America, Inc. v. Federal Ins. Co., No 6:17-1599 (Nov. 7, 2017).  In so holding, the court noted that the dispute between the two insurers (only one of which was a party to the case), as to the appropriate proration of the insured’s loss has “no impact” on the insured’s right to fully recover under the one insurer’s policy.

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A New Jersey federal court has held that, following a statutory merger under New Jersey law, the surviving entity acquired the target entity’s rights under its directors and officers liability insurance policy by operation of law and was entitled to reimbursement for post-merger defense costs incurred in defending the target entity’s directors in shareholder class actions.  BCB Bancorp, Inc. v. Progressive Cas. Ins. Co., 2017 WL 4155235 (D. N.J. Sept. 18, 2017).

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Giving a major win to several religiously-affiliated health care systems, the United States Supreme Court unanimously held on June 5 that pension plans maintained by certain church-associated organizations qualify as ERISA-exempt “church plans,” whether or not a church first established the plans. Advocate Health Care Network v. Stapleton, No. 16-74 (June 5, 2017). Plaintiffs around the country have alleged that pension plans for employees of several hospitals were not exempt “church plans” because the statutory definition requires that such plans be “established and maintained . . . by a church.” ERISA was amended to state that a plan “established and maintained . . . by a church” includes a plan maintained by a so-called “principal-purpose organization” controlled by or associated with a church which has as its principal purpose the administration or funding of the plan. The court interpreted this amendment to mean that plans maintained by such “principal-purpose organizations” are exempt from ERISA even if the plans were not originally established by a church.

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The United States Court of Appeals for the Fourth Circuit has held that, under Maryland law, a nurse placed by a staffing agency to work at a hospital qualifies as a hospital “employee” under the hospital’s insurance policy despite a separate contract describing the nurse as an employee of the agency, not the hospital. Interstate Fire & Cas. Co. v. Dimensions Assurance, Ltd, 2016 WL 7099822 (4th Cir. Dec. 6, 2016)
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The United States District Court for the District of Arizona, applying Arizona law, has held that the “other insurance” clauses in two policies are not “mutually repugnant” to enable the primary insurer to receive equitable contribution from an excess insurer where the “other insurance” clause in the primary policy stated that the clause does not apply if the other policy is written to apply as excess insurance.  Admiral Ins. Co. v. Community Ins. Group SPC Ltd., 2016 WL 6873345 (D. Ariz. Nov. 22, 2016).

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