The U.S. District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, has held that an insurer is estopped from denying coverage for a legal malpractice action after defending the action for over a year without a reservation of rights, despite knowledge of the facts upon which it ultimately relied to deny coverage.  However, the court also held that the insurer was not estopped from denying coverage for a subsequent action seeking disgorgement of the insured attorney’s fees because the insurer timely reserved rights with respect to the disgorgement action. Westport Ins. Corp. v. McClellan , 2020 WL5961047 (E.D. Pa. Oct. 8, 2020).
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Continue Reading Insurer Estopped from Denying Coverage for Legal Malpractice Action But Not Subsequent Disgorgement Action

The United States District Court for the Northern District of California has held that, in an action to rescind a professional liability policy, a triable issue of fact existed regarding whether an insured misrepresented or concealed information in connection with obtaining insurance where the insured did not have express notice of the clients’ dissatisfaction with his services and it was not otherwise obvious that a claim might be filed against him when he applied for the policy. Am. Alternative Ins. Corp. v. Warner, 2020 WL 6204924 (N.D. Cal. Oct. 22, 2020). In denying the insurer’s motion for summary judgment, the court noted that evidence of an increase in premiums is sufficient to establish materiality under California law.
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Continue Reading Whether Insured Misrepresented or Concealed Information in Application is a Fact Issue for Trial

The United States District Court for the Western District of Texas, applying Texas law, has held that a legal malpractice insurer was not liable for a statutory bad faith claim by the insured law firm because the evidence presented a bona fide coverage dispute, not a bad faith denial of the request for a defense.  Ryan Law Firm v. New York Marine & Gen. Ins. Co., 2020 WL 5820531 (W.D. Tex. Sept. 30, 2020).
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Continue Reading Malpractice Insurer Not Liable for Bad Faith for Rejecting Settlement Demand Within Limits

Applying California law, the United States Court of Appeals for the Ninth Circuit has held that a letter proposing an informal settlement received before the policy period constituted a claim, such that no coverage was available for subsequent related lawsuits.  Pac. Coast Surgical Ctr., L.P. v. Scottsdale Ins. Co., 2020 WL 5870257 (9th Cir. Oct. 2, 2020).
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Continue Reading Pre-Policy Settlement Letter Deemed a “Claim,” Barring Coverage for Related Lawsuits

Applying Illinois law, a federal district court has held that an insurer did not have a duty to defend or indemnify for a lawsuit that was filed and dismissed prior to the policy period and later refiled during the policy period.  Navigators Specialty Ins. Co. v. B.D. McClure & Assocs., Ltd., 2020 WL 5909067 (N.D. Ill. Oct. 6, 2020).
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Continue Reading Insurer Had No Duty to Defend or Indemnify for Lawsuit Refiled During the Policy Period

Reversing the trial court, the Delaware Supreme Court has held that an appraisal proceeding does not constitute a “Securities Claim” under a D&O policy.  In re Solera Insurance Coverage Appeals, Nos. 413,2019 and 418,2019 (Del. Oct. 23, 2020).
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Continue Reading Delaware Supreme Court Holds that Appraisal Proceeding is not a “Securities Claim”

The United States District Court for the District of Kansas, applying Kansas law, has held that an excess E&O insurer was required to advance defense costs where coverage under a potentially responsive D&O policy had not yet been resolved and no other coverage was available.  Bedivere Ins. Co. v. Blue Cross & Blue Shield of Kansas, Inc., 2019 WL 5819612 (D. Kan. Sept. 30, 2020).
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Continue Reading Excess E&O Insurer Must Reimburse Defense Expenses Pending Resolution of Insured’s Coverage Dispute with Primary D&O Insurer

The United States District Court for the Western District of Washington, applying Washington law, has held that exclusions for false advertising and trademark infringement in a media liability policy did not bar defense coverage for a claim alleging that Expedia violated the Lanham Act.  Nat’l Union Fire Ins. Co. v. Expedia, Inc., 2020 WL 5893326 (W.D. Wash. Oct. 5, 2020).
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Continue Reading Insurer Has Duty to Defend Lanham Act “False Advertising” Claims Despite False Advertising and Trademark Exclusions

A California federal court has held that a complaint alleging that a law firm was providing services in a non-legal capacity nonetheless triggered a duty to defend the firm under a lawyers’ professional liability policy, where the complaint also described legal-related services provided by the insured.  Associated Indus. Ins. Co. v. Bloom, 2020 WL 5802949 (C.D. Cal. July 29, 2020). 
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Continue Reading Despite Allegation that Law Firm Was Not Providing “Legal Advice,” Complaint Triggers Duty to Defend Under Lawyers’ Professional Liability Policy

Applying New York law, a New York state trial court granted an insurer’s motion for summary judgment where an insured sought coverage under a private company D&O policy for a settlement it had paid for fraudulent filings for state construction projects that were made after the policy’s run-off date.  WDF Inc. v. Zurich Am. Ins. Co., 2020 WL 5801072 (N.Y. Sup. Ct., N.Y. Cnty. Sept. 29, 2020).
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Continue Reading Run-Off Endorsement Bars Coverage for “False Filings” Made in Connection with Construction Projects for State Agencies