The U.S. District Court for the Southern District of New York, applying New York law, has concluded that an insurer waived the right to assert a policy exclusion as a coverage defense in a declaratory judgment action after incorrectly denying coverage based on a similar, but broader, exclusion contained in an inapplicable policy.  City of New York v. Philadelphia Indem. Ins. Co., 2020 WL 5441347 (S.D.N.Y. Sept. 10, 2020).

Continue Reading Insurer Waived Right to Assert Policy Exclusion First Raised in Answer to Declaratory Judgment Complaint

A federal district court applying Alabama law has held that an insurer owed no defense or indemnification obligations because the employment practices at issue in an underlying discrimination action against the insured occurred prior to the policy’s retroactive date.  Elite Refreshment Servs. LLC v. Liberty Mut. Grp., Inc., 2020 WL 470289 (N.D. Ala. Jan. 29, 2020).

Continue Reading Retroactive Date Bars Coverage for Underlying Discrimination Action

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.

Continue Reading Insurer Must Advance Defense Costs as Incurred and Cannot Enforce Policy’s Defense Arrangement Consent Provision

Applying Illinois law, a federal district court has held that a policy’s sexual misconduct exclusion did not apply to preclude coverage for an underlying lawsuit against a school district involving a student’s acts of sexual misconduct, where the applicability of the exclusion in that context was not “clear and free from doubt.”  Netherlands Ins. Co. v. Macomb Cmty. Unit Sch. Dist., 2019 WL 5417144 (C.D. Ill. Aug 6, 2019).

Continue Reading Coverage for Lawsuit Against School District Involving Student’s Acts of Sexual Misconduct Not Barred by Sexual Misconduct Exclusion

A Minnesota federal court has held that a prior acts exclusion bars coverage for claims involving wrongful acts that occurred both before and after the applicable prior acts date because the wrongful acts arose from the “same nucleus” of facts.  Tile Shop Holdings, Inc. v. Allied World Nat’l Assurance Co., 2019 WL 2357044 (D. Minn. June 4, 2019).

Continue Reading No Coverage for Claims Alleging Pre- and Post-Prior Acts Date Conduct

In a win for Wiley Rein’s client, the Connecticut Supreme Court has held that the continuing course of conduct doctrine could not save the untimely claims of an insurer brought against an insurance adjuster.  See Essex Ins. Co. v. William Kramer & Associates, LLC, Case No. SC 20130 (Conn. Apr. 16, 2019).  On a certified question from the United States Court of Appeals for the Second Circuit, the Supreme Court held that the doctrine did not toll the applicable three-year statute of repose because the adjuster’s duties to the insurer ended when the adjuster closed its file more than six years before the insurer’s lawsuit.

Continue Reading Connecticut Supreme Court Answers Certified Question in Favor of Insurance Adjuster, Holding That Continuing Course of Conduct Doctrine Did Not Toll Statute of Repose

Applying Florida law, a federal district court has held that an insurer owed no duty to defend or indemnify its individual insureds because an exclusion for claims arising from the purchase or sale of securities barred coverage.  Colorado Boxed Beef Co. v. Evanston Ins. Co., 2019 WL 77376 (M. D. Fla. Jan. 2, 2018).

Continue Reading No Duty to Defend or Indemnify Due to Securities Exclusion

Applying Delaware law, a Delaware state court has held that a policy’s “capacity” exclusion precluded coverage for two directors because the claims filed against those directors would not have been established “but for” the directors’ alleged misconduct related to third-party investment entities the directors formed to control the insured company.   Goggin v. National Union Fire Ins. Co. of Pittsburgh, 2018 WL 62661195 (Del. Sup. Ct. Nov. 30, 2018).

Continue Reading “Capacity” Exclusion Bars Coverage for Two Directors for Claims of Wrongdoing and Fiduciary Breaches Outside Their Insured Capacity

In a case that was briefed and argued by Wiley Rein in the trial court and on appeal, along with Fox Rothschild LLP as Delaware local counsel, the Delaware Supreme Court held that Texas law applies to a comprehensive insurance program issued to a Texas corporation and its subsidiaries nationwide.  The Travelers Indemnity Company v. CNH Industrial America, LLC, No. 420, 2017 (Del. July 16, 2018).  The Court reversed a decision of the Superior Court holding that Wisconsin law applied and, as a result, that the anti-assignment provisions of the policies at issue were unenforceable.  Noting that it was undisputed that the anti-assignment provisions are enforceable under Texas law, the Court reversed the nearly $14 million judgment in favor of the purported assignee of rights under the policies and directed entry of judgment for the insurer.

Continue Reading Delaware Supreme Court Holds Texas Law Applies to Comprehensive Insurance Program Issued to a Texas Corporation and Its Subsidiaries