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 court held that the exclusion applied only to events reported prior to the policy’s inception, and further that the exclusion did not apply because the action against the insured was not caused by or related to two previous lawsuits.
The United States District Court for the Southern District of New York, applying New York law, has held that an insurer was entitled to rescind a lawyers professional liability policy because the insured law firm made a material misrepresentation in its application. Travelers Cas. & Surety Co. of Am. v. Gold, Schollar, Moshan, PLLC, 2018 WL 1508573 (S.D.N.Y. Mar. 14, 2018).
The United States Court of Appeals for the Tenth Circuit, applying New Mexico law, has held that a sub-contractor’s insurer had a duty to defend and indemnify a general contractor named as an additional insured in a wrongful death suit and that the sub-contractor’s insurance policy was primary to the general contractor’s own policy. First Mercury Ins. Co. v. Cincinnati Ins. Co., 882 F.3d 1289 (10th Cir. Feb. 26, 2018).
Applying California law, a federal district court has held that a disciplinary proceeding initiated by a state insurance department against an insured life insurance agent is unambiguously subject to a regulatory action sublimit of liability. Cerf v. Cont’l Cas. Co., Case No. 17-cv-07993-DSF-SS (C.D. Cal. Mar. 13, 2018). Wiley Rein represented the insurer in this case.
Applying Arizona and New York law, an Arizona trial court has held that a claims-made-and-reported policy unambiguously does not apply where the insured failed to notify the insurer of a claim before the policy’s reporting deadline. Southwest Energy Systems LLC v. Underwriters at Lloyd’s, London, Case No. 2017-015010 (Ariz. Super. Ct., Maricopa Cnty. Mar. 15, 2018). Wiley Rein represented the insurer in this case.
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. v. Cont’l Cas. Co., No. 5:15-CV-377-D (E.D.N.C. Mar. 20, 2017).
The Ohio Court of Appeals has affirmed that an insurer owed no duty to defend under an employment practices liability policy where a lawsuit was brought by employees of the insured who were also former partners and shareholders, and the suit was premised solely on the employees’ rights as former partners and shareholders. Orthopedic & Neurological Consultants, Inc. v. Cincinnati Ins. Co., 2018 WL 460738 (Ohio Ct. App. Jan. 18, 2018).
Applying Pennsylvania law, a federal district court has held that an insurer had no duty to defend or indemnify a judgment for excessive legal fees because a court-ordered letter predating the policy period and previewing objections to the insured law firm’s fees was a “claim” first made prior to the policy’s inception. Allied World Ins. Co. v. McErlane, P.C., 2018 WL 1035781 (E.D. Pa. Feb. 23, 2018). The district court held that the letter, issued at the request of a state court during estate proceedings in which the insured law firm represented the executor, constituted a “claim” because it was a “written notice” for monetary relief.
The United States Circuit Court of Appeals for the Ninth Circuit, applying California law, has held that an insurer owed no duty to reimburse the insured’s costs of responding to a governmental investigation. Millennium Labs., Inc. v. Allied World Assurance Co., Inc., 2018 WL 1179601 (9th Cir. Mar. 7, 2018). While the court held that the investigation constituted seven “claims,” it found that each such “claim” either fell within the policy’s specific litigation or pending-or-prior litigation exclusions, or was first made after the policy incepted.
The United States District Court for the Eastern District of Pennsylvania has held that where an occurrence-based crime policy covers only losses discovered “during the Policy Period,” no coverage is available for losses discovered after the policy period concluded, despite the fact that a prior policy issued to the insured contained a discovery period extending beyond the termination of the policy. Wescott Electric Co. v. Cincinnati Ins. Co., 2018 WL 1210543 (E.D. Pa. Mar. 8, 2018). Furthermore, where the policy defines one “occurrence” as a “series of acts whether or not related,” multiple employee thefts over ten years constitute a single occurrence.