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Executive Summary Blog

Legal developments affecting professional liability insurers

Category Archives: Uncategorized

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“No Direct Action” Rule Bars Claimant’s Declaratory Judgment Claim Against Insurer

Posted in Uncategorized
The Texas Supreme Court has ruled that the state’s “no direct action” rule barred a personal injury claimant from suing an insurer until the insurer’s legal obligation to pay damages has been established.  In re Essex Ins. Co., No. 13-1006 (Tex. Sup. Ct. Nov. 21, 2014).  In so doing, the court reversed the trial court’s… Continue Reading

Tax Shelter Exclusion Bars Coverage for Suits Against Accounting Firm

Posted in Uncategorized
Applying Tennessee law, a federal district court has held that a tax shelter exclusion precludes coverage for two underlying complaints alleging that the insured implemented investment strategies constituting illegal tax avoidance schemes.  Financial Strategy Group, PLC v. Continental Casualty Co., No. 2:14-cv-2154 (W.D. Tenn. Sept. 23, 2014).  Wiley Rein represented the insurer in this case.… Continue Reading

New Jersey Appellate Court Concludes Third Parties Have Standing to Bring Action Against E&O Insurer

Posted in Uncategorized
In an unpublished opinion, a New Jersey appellate court has held that third-party claimants have standing to bring an action against an insolvent insured’s E&O carriers, even in the absence of policy language providing that right.  Ferguson v. Travelers Indemnity Co., 2014 WL 3798524 (N.J. App. Div. Aug. 4, 2014). … Continue Reading

Professional Services Exclusion Unambiguously Excludes Coverage for Negligent Building Design

Posted in Professional Services, Uncategorized
The United States Court of Appeals for the Fifth Circuit has held that, under Louisiana law, an insurer had no duty to defend by operation of a professional services exclusion because the underlying complaint arose out of the rendering of or failure to render professional services.  Wisznia Co., Inc. v. General Star Indem. Co., No.… Continue Reading

No Coverage for Claims Arising out of Madoff’s Ponzi Scheme

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A New York state intermediate appellate court, applying Connecticut law, has held that a liability insurance policy’s loss-of-money, personal-profit, sale-of-securities, and insolvency exclusions preclude coverage for claims by investors against an insured bank for amounts lost in connection with Bernard Madoff’s Ponzi scheme.  Associated Cmty. Bancorp, Inc. v. St. Paul Mercury Ins. Co., 2014 WL… Continue Reading

Absence of Parallel State Court Proceedings Does Not Require Federal Court to Exercise Jurisdiction Under Declaratory Judgment Act

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A federal appellate court has held that a lower court did not abuse its discretion in declining to exercise jurisdiction under the Declaratory Judgment Act even though there was not a parallel state court proceeding because the litigation addressed issues of state law that were better suited to be resolved in the state court system. … Continue Reading

Other Insurers Impacted by Determination of Relationship of Claims are Necessary Parties in a Declaratory Judgment Action

Posted in Uncategorized
A federal district court in California has held that, where an insured and an excess insurer dispute whether certain claims are related, and the resolution of that dispute would affect the availability of coverage under policies issued by other carriers, the other carriers are necessary and indispensable parties to the coverage litigation. Navigators Ins. Co.… Continue Reading

No Coverage for Lawyer’s Alleged Self-Dealing

Posted in Uncategorized
A federal district court in Nevada has granted an insurer’s motion for summary judgment, holding that the business enterprise, trust, and investment advice exclusions in a lawyers professional liability policy barred coverage for a suit alleging self-dealing by the insured attorney and his firm. Christensen v. Darwin Nat’l Assurance Co., No. 2:13-CV-00956-APG-VCF (D. Nev. Apr. 14,… Continue Reading

Independent Counsel’s Settlement Report Inadmissible in Subsequent Litigation Under Different Policy

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Applying California law, a federal court in California has held that an insurer that issued two primary policies to a policyholder may not use a confidential settlement memorandum prepared by independent counsel retained under one policy in subsequent coverage litigation related to the other policy. Fidelity Nat’l Financial, Inc., et al. v. Nat’l Union Fire Ins.… Continue Reading

After Missing a Statute of Limitations, Insured Law Firm Should Have Disclosed a Potential Claim

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Applying District of Columbia law, the United States District Court for the District of Columbia has held that, where an insured law firm is required to disclose reasonably foreseeable potential claims and does not disclose a missed statute of limitations, its insurer may disclaim coverage for the resulting malpractice claim.  Chi. Ins. Co. v. Paulson… Continue Reading

Former Employee Not an “Insured Member”

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The United States District Court for the District of Columbia has held that a former employee was not an “Insured Member” under District of Columbia law.  Silver v. Am. Safety Indem. Co., 2014 WL 1233034 (D.D.C. Mar. 26, 2014).… Continue Reading