The United States Court of Appeals for the Eighth Circuit, applying Federal procedural and Minnesota substantive law, affirmed a district court’s conclusion that insured corporate directors failed to carry their burden to establish that their insurer was responsible for 100% of the fees and costs incurred in connection with a suit against the directors, the corporation, and other parties.  Brand v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 2019 WL 3850592 (8th Cir. Aug. 16, 2019).

Continue Reading Declaratory Judgment Pleading and Allocation: Don’t Demand “All or Nothing” Unless You Really Mean It

The United States District Court for the Middle District of Florida has ruled regarding the discoverability of a broad array of documents sought by an insurer in a declaratory judgment action concerning application of a prior knowledge condition.  Berkley Assurance Co. v. Expert Grp. Int’l Inc., 2017 WL 4574599 (M.D. Fla. Oct. 13, 2017).  The court’s order included mixed rulings on seven of the insurer’s requests for production (RFPs) and one interrogatory.

Continue Reading Federal Court Limits Information Discoverable by Insurer Concerning Insured’s Prior Knowledge

A Pennsylvania federal district court, evaluating the recent amendments to the Federal Rules of Civil Procedure regarding proportionality in discovery, has held that an insured that seeks to discover extrinsic evidence regarding interpretation of an insurance policy must: (1) point to specific language in the policy itself that is genuinely ambiguous (or that extrinsic evidence is likely to render ambiguous); and (2) show that the requested extrinsic evidence is also likely to resolve the ambiguity without imposing unreasonable expense. Westfield Ins. Co. v. Icon Legacy Custom Modular Homes, 2017 WL 2021514 (M.D. Pa. May 12, 2017).

Continue Reading Court Applies 2015 “Proportionality” Amendments to Federal Rules to Preclude Insured’s Discovery into Extrinsic Evidence Regarding Insurance Policy

The United States District Court for the Northern District of Illinois, applying federal and Illinois law, has found that an employment discrimination lawsuit was “first made” within a professional liability policy’s policy period despite the fact that the lawsuit’s required precursor, an Equal Employment Opportunity Commission (EEOC) charge, was filed before the policy period.  John Marshall Law Sch. v. Nat’l Union Fire Ins. Co., 2016 WL 7429221 (N.D. Ill. Dec. 26, 2016).  The court also refused to dismiss an insured’s request for a declaratory judgment that would prevent the insurer from raising policy defenses, as well as the insured’s claim for vexatious refusal to pay under an Illinois statute.

Continue Reading Court Finds EEOC Charge and Subsequent Lawsuit to Be Two Separate Claims Under Claims-Made Policy

In a favorable ruling for a Wiley Rein client, a Tennessee federal court has rejected an insured’s motion to compel documents and interrogatory responses relating to reserves, reinsurance communications, claims and underwriting manuals, and other claims against other insureds.  First Horizon Nat’l Corp. v. Houston Cas. Co., 2016 WL 5869580 (W.D. Tenn. Oct. 5, 2016).  Wiley Rein represents the primary carrier.

Continue Reading Documents Relating to Other Insureds, Reserves, Reinsurance Communications, Claims Handling and Underwriting Manuals Not Discoverable

The United States Court of Appeals for the Seventh Circuit has affirmed a trial court’s ruling that, under Illinois law, a contract exclusion applied to preclude coverage for a claim stemming from an insured’s failure to pay its contractor because all of the claimant’s causes of action arose from its contract with the insured. Altom Transp., Inc. v. Westchester Fire Ins. Co., 2016 WL 2956834 (7th Cir. May 20, 2016). The appellate court also dismissed the claimant—a dispensable, non-diverse party—in order to preserve diversity jurisdiction.
Continue Reading Federal Appellate Court Declares “Language of the Policy is King” in Affirming Application of Contract Exclusion

The United States District Court for the Eastern District of New York, applying international law, has held that a Swiss forum selection clause in a D&O policy issued to the Federacion Internationale de Football Association (FIFA) did not apply to an individual insured because the individual, a FIFA executive, was not a signatory to the policy and was not domiciled in the country of the insurers or the named insured. Li v. Certain Underwriters at Lloyd’s, London, 2016 WL 1706125 (E.D.N.Y. Apr. 27, 2016). Pursuant to its ancillary jurisdiction, which was triggered as a result of the underlying criminal proceedings against the insured executive, the court ordered the insurers to advance the executive’s defense costs.
Continue Reading D&O Policy Forum Selection Clause Not Binding on Individual Insured