Related Claims and associated exclusions

The U.S. Court of Appeals for the Third Circuit, applying California and Virginia law, has found that wrongful acts alleged in two ERISA class actions comprising different class periods are causally and logically related.  Northrop Grumman Corp. v. AXIS Reinsurance Co., 2020 WL 1933264 (3rd Cir. Apr. 22, 2020).

Continue Reading Class Actions Comprising Different Class Periods Causally and Logically Related

The United States District Court for the District of Hawaii, applying Hawaii law, has held that a claims-made policy did not provide coverage for damages awarded in a final judgment for an underlying lawsuit because the claims in that lawsuit were first made prior to the policy period.  Greenspon v. AIG Specialty Ins. Co., 2020 WL 1917333 (D. Haw. Apr. 20, 2020).

Continue Reading No Coverage for Judgment Premised on Same Facts Asserted in Suit Filed Prior to Policy Period

The United States District Court for the Southern District of West Virginia, applying West Virginia law, has held that claims against a surgery center arising out of medical procedures performed by a doctor while patients were anesthetized, primarily related to alleged sexual abuse, were “related claims” subject to a single limit of liability pursuant to a sexual misconduct endorsement.  Allied World Surplus Lines Ins. Co. v. Day Surgery Ltd. Liab. Co., 2020 WL 1545881 (S.D. W. Va.) (Mar. 31, 2020).  However, the court held that the surgery center’s excess policy, which did not contain a sexual misconduct endorsement, did not cover claims arising solely out of sexual abuse.

Continue Reading Claims Arising Out of Alleged Sexual Abuse by Doctor are “Related Claims” Subject to Single Limit of Liability Under Sexual Misconduct Endorsement

In a win for Wiley’s client, a Texas appellate court held that a D&O policy did not cover Wells notices issued by the United States Securities and Exchange Commission (SEC) or its enforcement action because they involved the same series of related facts as the SEC’s original investigation and shareholder litigation initiated before the claims-made policy period.  UniPixel, Inc. v. XL Specialty Ins. Co., 2020 WL 1528098 (Tex. App. Mar. 31, 2020).

Continue Reading SEC Enforcement Action Deemed a Single Claim With Prior SEC Investigation and Shareholder Suits

The United States District Court for the Northern District of Illinois, applying Illinois law, has held that there is no coverage under a D&O policy where the insured did not timely report a declaratory judgment lawsuit and instead sought coverage only after an amended complaint was filed in the successive policy period.  Hanover Ins. Co. v. R.W. Dunteman Co., 2020 WL 1275002 (N.D. Ill. Mar. 17, 2020).  The court held that the complaints were part of a single “claim” and not separate “claims” even though the amended complaint added insured defendants and theories of liability.

Continue Reading Declaratory Judgment Complaint Constitutes a Reportable Claim for a Wrongful Act; Subsequent Amended Complaint Adding Insured Defendants Not a Separate Claim

The United States Court of Appeals for the Ninth Circuit, applying Washington law, has held that a district court erred in concluding that a demand letter and suit alleging the same wrongful act constituted a “single claim” where the applicable professional liability policy lacked a related claims provision.  Nat’l Union Fire Ins. Co. v. Zillow, Inc., 2020 WL 774366 (9th Cir. Feb. 18, 2020).  The court of appeals declined, however, to find that the absence of a related claims provision resolved the coverage issue and remanded for consideration of extrinsic evidence to determine the parties’ intent.

Continue Reading Ninth Circuit Holds Demand Letter and Suit Alleging Same Wrongful Acts Are Not Necessarily a Single Claim Where Policy Lacks Related Claims Provision

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.

Continue Reading Subpoena Not a ‘Claim’ When Issued in Litigation Not Involving Insured’s Professional Services

Applying Pennsylvania law, the United States District Court for the Eastern District of Pennsylvania has held that a shareholder demand letter, a derivative action and a shareholder lawsuit against the insured were not “related” because the alleged conduct took place at different times and involved different individuals.  Vito v. RSUI Indem. Co., 2020 WL 424592 (E.D. Pa. Jan. 27, 2020).

Continue Reading Claims Alleging Same Conduct Against Same Insured But Based on Different Specific Facts Not Related Under D&O Policy

In a win for Wiley Rein’s client, the United States District Court for the Southern District of Florida, applying Florida law, held that, as a matter of law, a lawsuit against an engineer arising out of three alleged errors in connection with a construction project constituted a single “claim” under the engineer’s claims-made-and-reported architects and engineers policies. Nova Southeastern Univ., Inc. v. Continental Cas. Co., No. 18-CIV-61842-RAR (S.D. Fla. Dec. 27, 2019).  Furthermore, the court held that the policies’ prior knowledge and prior notice provisions separately and independently barred coverage for the lawsuit.

Continue Reading Lawsuit Arising Out of Three Design Errors is a Single “Claim,” and Prior Knowledge and Prior Notice Provisions Bar Coverage

Applying Illinois Law, the United States District Court for the Northern District of Illinois has held that an insurer had no duty to defend a claim reported more than nine months after the end of the policy period.  Wesco Ins. Co. v. Elements Architectural Grp., Inc., 2019 WL 5725440 (N.D. Ill. Nov. 5, 2019).

Continue Reading Obligation to Timely Report Claim Applies Even if Claim Appears to Have Been Abandoned