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Legal developments affecting professional liability insurers

Category Archives: Related Claims and associated exclusions

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Fourth Circuit Affirms that All Claims Arising from Negligent Design of Two, Nearly Identical Bridges Constitute “Related Claims”

Posted in Related Claims and associated exclusions
In a win for an insurer represented by Wiley Rein, the United States Court of Appeals for the Fourth Circuit, applying North Carolina law, affirmed that all claims against an engineering firm for the negligent design of two bridges constituted “related claims,” subject to a single limit of liability.  Stewart Eng’g, Inc. v. Continental Cas. Co.,… Continue Reading

Two Class Action Lawsuits Are “Related,” Despite Different Plaintiffs and Different Time Periods

Posted in Related Claims and associated exclusions
Applying California and Virginia law, a federal district court has held that two class action lawsuits alleging similar wrongful conduct, but brought by different classes for different class periods, were nonetheless related and constituted a single claim.  Northrop Grumman Corp. v. AXIS Reinsurance Co., 2018 WL 5314918 (D. Del. Oct. 26, 2018).… Continue Reading

Securities Suits Alleging Misstatements About Financial Performance Over Same Time Period Constitute A Single Claim

Posted in Related Claims and associated exclusions
Applying Texas law, a federal district court has held that an insurer breached its policy by denying coverage for two lawsuits filed after the policy period on the basis that they were not related to an earlier lawsuit.  Nobilis Health Corp. v. Great American Ins. Co., 2018 WL 4810840 (S.D. Tex. Oct. 4, 2018).  The… Continue Reading

Ten Lawsuits Alleging Mishandling or Sale of Human Body Parts Constitute a Single “Claim”

Posted in Related Claims and associated exclusions
Applying Illinois law, a federal district court has held that ten lawsuits against an anatomical donation company for alleged mishandling and sale of human body parts are “related” and constitute a single “Claim” under a professional liability policy.  Lloyd’s Syndicate 3624 v. Biological Res. Ctr. of Ill., LLC, 2018 WL 4489589 (N.D. Ill. Sept. 19,… Continue Reading

Resident’s Three Claims Against Condo Association Spanning Multiple Years Deemed Single Claim Subject to Single Limit

Posted in Related Claims and associated exclusions, Wrongful Act
The United States District Court for the Northern District of Illinois has held that three claims brought by a resident against a condominium owners’ association for alleged discrimination and retaliation involved related wrongful acts and therefore are properly treated as a single Claim deemed first made during the claims-made policy period when the first such… Continue Reading

Prior and Pending Litigation Exclusion Does Not Apply Where Insurer Cannot Establish Facts Alleged in Later Investigation Were “Underlying” Prior Investigation

Posted in Related Claims and associated exclusions
A New York state court, applying New York law, has held that an insurer was not entitled to summary judgment based on a prior and pending litigation exclusion because the insurer could not establish that the prior investigation shared a common fact, circumstance, situation, transaction or event with the matter at issue or that any… Continue Reading

No Coverage for Lawsuit Where SEC Notices Issued Prior to Policy Period Alleged Related Investment Misconduct

Posted in Related Claims and associated exclusions
The United States Court of Appeals for the Tenth Circuit, applying Utah law, has held that no coverage exists for a lawsuit filed against an insured where an SEC investigation and proceeding conducted prior to the policy’s inception and the lawsuit both alleged a scheme of defrauding investors over a period of several years by… Continue Reading

Lawsuits Involving a “Continuing Pattern of Anticompetitive Behavior” Constitute Related Claims

Posted in Related Claims and associated exclusions, Wrongful Act
The United States Court of Appeals for the Eleventh Circuit, applying Florida law, has affirmed a district court’s holding that multiple lawsuits filed against the insured over a fifteen-year period involving a “continuing pattern of anticompetitive behavior” constitute claims “related logically, causally or in any other way.”  Health First, Inc. v. Capitol Specialty Ins. Corp.,… Continue Reading

Wells Notices and Subsequent Enforcement Action Deemed First Made at the Time when SEC Original Investigation Began

Posted in Related Claims and associated exclusions
In a win for Wiley Rein’s client, a Texas state court, applying Texas law, has held that no coverage was available for Wells notices issued and an enforcement action brought by the United States Securities and Exchange Commission (SEC) because they were related to the SEC’s original investigation, which commenced prior to the claims-made policy… Continue Reading

Insured’s Payment to Stockholders to Settle Bankruptcy Dispute Relates to Prior Notice of Circumstances

Posted in Related Claims and associated exclusions, Wrongful Act
Applying Rhode Island law, the United States District Court for the District of Rhode Island has held that an insured was entitled to coverage for a settlement because the settlement related back to a prior notice of circumstances.  Twin River Worldwide Holdings, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2018 WL 3640995… Continue Reading

Specific Litigation Exclusion Bars Coverage for Separate Proceeding Involving Same Conduct in Allegedly Oversupplying “Pill Mills”

Posted in Prior Knowledge/Warranty Exclusion, Related Claims and associated exclusions
An Ohio federal district court has held that a specific litigation exclusion concerning a lawsuit brought by a state attorney general alleging that the insured oversupplied “pill mills” barred coverage for a show cause order the insured later received from a federal law enforcement agency concerning some of the same alleged misconduct.  Miami-Luken, Inc. v.… Continue Reading

Four Claims Regarding Same Appraisal Methodology Are Covered but Related and Therefore Confined to One Policy Year

Posted in Bad faith/duty to settle, Prior Knowledge/Warranty Exclusion, Related Claims and associated exclusions
The United States District Court for the Northern District of Illinois, applying New York law, has held that a real estate service firm’s professional liability insurance policies cover four claims regarding the firm’s allegedly improper use of a certain appraisal methodology because neither the prior knowledge exclusion nor an exclusion regarding investment activity applied.  Cushman… Continue Reading

Amended Complaint Raising Different Legal Theory Is Not a Claim First Made at Time of Initial Complaint

Posted in Notice of Claim, Related Claims and associated exclusions
The Louisiana Court of Appeals has held that a claims-made policy affords coverage for a lawsuit filed before the policy period because an amended complaint alleging a new legal theory was filed during the policy period.  Billeaudeau v. Opelousas Gen. Hosp. Auth., 2018 WL 1835510 (La. Ct. App. Apr. 18, 2018).  The court also rejected… Continue Reading

Court Holds Prior Litigation and Event Exclusion Does Not Apply

Posted in Prior Knowledge/Warranty Exclusion, Related Claims and associated exclusions, Wrongful Act
The United States District Court for the Southern District of Indiana has held that a prior litigation and event exclusion in a directors and officers liability policy did not bar coverage for a shareholder suit against the insured.  Emmis Commc’n Corp. v. Illinois Nat’l Ins. Co., 2018 WL 1410191 (S.D. Ind. Mar. 21, 2018).  The… Continue Reading

All Claims Arising from Negligent Design of Two, Nearly Identical Bridges Constitute “Related Claims”

Posted in Related Claims and associated exclusions
In a win for an insurer represented by Wiley Rein, the United States District Court for the Eastern District of North Carolina, applying North Carolina law, has held that all claims against an engineering firm for the negligent design of two bridges constituted “related claims,” subject to a single limit of liability.  Stewart Eng’g, Inc.… Continue Reading

Specific Litigation Exclusion Bars Coverage for Puerto Rico Mutual Fund Suits and Arbitrations

Posted in Related Claims and associated exclusions
In a win for Wiley Rein’s client, a Puerto Rico federal district court has held that a policy’s broadly worded specific litigation exclusion bars coverage for a series of lawsuits, regulatory investigations, and arbitrations filed against the insured because the matters all involve facts, situations, or circumstances alleged in the claims listed in the exclusion. … Continue Reading

Eleventh Circuit Holds Prior Acts Exclusion Does Not Apply to Claim by FDIC Against Failed Bank

Posted in Related Claims and associated exclusions, Wrongful Act
The U.S. Court of Appeals for the Eleventh Circuit has held that a prior acts exclusion in a directors and officers liability policy does not bar coverage for a lawsuit brought by the Federal Deposit Insurance Corporation (FDIC) against a failed bank, because the wrongful acts at issue occurred after the prior acts date and… Continue Reading

Insured’s Claims Barred by Res Judicata

Posted in Related Claims and associated exclusions
Applying Maryland law, a federal district court has held that the doctrine of res judicata barred an insured’s claims for coverage under a particular policy, where the insured’s previous efforts to bring those claims in a different proceeding and concerning a different policy failed.  The Humane Society of the United States v. Nat’l Union Fire… Continue Reading

Eleventh Circuit Affirms that Eleven Claims Arising Out Of Negligently Repackaging Two Drugs Are “Related Claims”

Posted in Related Claims and associated exclusions
In a win for an insurer represented by Wiley Rein, the United States Court of Appeals for the Eleventh Circuit, applying Florida law, has held that eleven claims by patients against a pharmacy and pharmacist for negligently repackaging two preservative-free drugs for injections by the same doctor to treat the same condition constituted “related claims.” … Continue Reading

Specific Litigation Exclusion Bars Coverage When Claim Arises “At Least in Part” From Excluded Litigation

Posted in Related Claims and associated exclusions
An Illinois district court, applying Delaware law, has held that a specific litigation exclusion in a company’s directors and officers insurance policy bars coverage for a claim arising “at least in part” from the litigation referenced in the exclusion.  RSUI Indem. Co. v. Worldwide Wagering, Inc, 2017 WL 3023748 (N.D. Ill. Jul. 17, 2017).… Continue Reading

Separate Lawsuits Part of a Single Claim First Made Prior to Policy Period

Posted in “Claim”, Related Claims and associated exclusions
The United States District Court for the District of Colorado, applying Colorado law, has held that two lawsuits were connected by the “single scheme” of a contractor to interfere with a government contract for a surveillance camera system.  Ciber, Inc. v. Ace Am. Ins. Co., 2017 WL 2537092 (D. Colo. June 9, 2017).  The district… Continue Reading

Insurer Not Estopped from Asserting Policy Defenses Where Insured Had Duty to Defend; Insured-v.-Insured Exclusion Does Not Bar Coverage for Claims by Former Shareholders

Posted in “Claim”, Insured v. Insured Exclusion, Related Claims and associated exclusions
An Illinois federal court, applying Illinois law, has held that an insurer who declined to advance defense costs was not estopped from asserting policy defenses in a coverage action later filed by the policyholder corporation.  Vita Food Prods., Inc. v. Navigators Ins. Co., 2017 WL 2404981 (N.D. Ill. June 2, 2017).  The court also held… Continue Reading