On remand from the Tenth Circuit, the United States District Court for the District of Colorado, applying Colorado law, has held that an insurer failed to satisfy its burden of proof on allocation where it neglected to ensure that an arbitration award was sufficiently detailed.  Rockhill Ins. Co. v. CFI-Global Fisheries Mgmt., 2020 WL 996882 (D. Colo. Mar. 2, 2020).  As a result, the District Court entered judgment against the insurer for the full amount of the arbitration award.

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The Fifth Circuit, applying Louisiana law, has held that coverage was unavailable for an $11.7 million settlement with the government because the settlement did not relate to “professional services” provided by the insured to its “client.”  IberiaBank Corp. v. Illinois Union Ins. Co., 2020 WL 1284958 (5th Cir. Mar. 18, 2020).

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Applying New York law, the United States District Court for the Southern District of New York has held that, because a subpoena duces tecum previously issued to the insured by a post-judgment creditor of a non-insured entity was not a “Claim” against the insured, the subpoena and a later-filed lawsuit against the insured could not qualify as “Related Claims” deemed first made when the subpoena was issued. Protective Specialty Ins. Co. v. Castle Title Ins. Agency, Inc., 2020 WL 550700 (S.D.N.Y. Feb. 3, 2020). The court also held that the “warranty exclusion” in the application for the policy (in which the insured warranted that it was “not aware of any incident or circumstance which may result in a claim”) did not bar coverage for the lawsuit, even though the insured failed to disclose the subpoena in the application.

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Applying Michigan law, a federal district court has held that common law causes of action for fraud and negligent misrepresentation are not “based on or arising out of actual or alleged violations” of ERISA or securities laws merely because they arise out of the same factual scenario.  Great Am. Fidelity Ins. Co. v. Stout Risius Ross, Inc., 2020 WL 601784 (E.D. Mich. Feb. 7, 2020).

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In a win for Wiley Rein’s client, the U.S. Court of Appeals for the Second Circuit, applying Connecticut law, has held that no coverage is available for a lawsuit seeking recovery of disputed legal fees because the relief sought does not constitute covered “damages” and because the insured was not performing “legal services.”  Continental Cas. Co. v. Parnoff, 2019 WL 6999867 (2d Cir. Dec. 20, 2019).

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Applying California Law, the United States District Court for the Southern District of California has held that an insurer must pay defense costs contemporaneously, even where the policy’s advancement provision merely requires payment “prior to final disposition of a claim,” because the insured became legally liable for defense costs as they were incurred.  Renovate Am., Inc. v. Lloyd’s Syndicate 1458, 2019 WL 6716735 (S.D. Cal. Dec. 10, 2019).  The court further held that the insured was excused from obtaining the insurer’s prior written consent regarding defense arrangements given the insurer’s seven-month delay in responding to the insured’s initial notice.

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The Court of Appeals of Wisconsin has held that the “location endorsement” in a professional liability policy precluded coverage for a medical negligence claim where the insured’s liability was “connected with” professional services performed outside the covered territory.  Paynter v. ProAssurance Wisconsin Ins. Co., 2019 WL 4018339 (Wis. Ct. App. Aug. 27, 2019).

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