LexisNexis® Legal Newsroom
Mealey's Insurance - Panel Reverses Ruling In Insurer's Favor In Errors, Omissions Liability Dispute

HARTFORD, Conn. - A Connecticut appeals court found that an insurer's duty to defend was not barred by a public entity errors and omission liability insurance policy's contract exclusion because an underlying complaint left open the possibility that a negligent misrepresentation claim against the insured did not arise out of a contract, reversing and remanding a lower court in an opinion to be officially released Dec. 6 (Town of Monroe v. Discover Property and Casualty Insurance Co., No. AC 38332, Conn. App.; 2016 Conn. App. LEXIS 443).

Mealey's Litigation Procedure - 2nd Circuit Affirms Confirmation Of ICC Award For ConocoPhillips

NEW YORK - The Second Circuit U.S. Court of Appeals on Nov. 7 affirmed a district court's decision to deny a petition to vacate an award filed by two subsidiaries of a Venezuela oil company and granting a cross-petition to confirm the award filed by ConocoPhillips Co., finding that the appellants failed to present any evidence that the award violated public policy (PDV Sweeny, Inc., et al. v. ConocoPhillips Co., et al., No. 16-170, 2nd Cir.).

Mealey's Antitrust/Unfair Competition - California Federal Judge Transfers Contract Breach Class Suit To Virginia

SAN FRANCISCO - A California federal judge on Oct. 25 agreed to transfer a breach of contract class complaint to Virginia, finding that the contract's forum-selection clause "does not contravene any anti-waiver provision of California's UCL [unfair competition law] or the strong public policy of California" (Run Them Sweet, LLC v. CPA Global Limited, et al., No. 16-3662, N.D. Calif.; 2016 U.S. Dist. LEXIS 147803).

Mealey's Litigation Procedure - California Federal Judge Transfers Contract Breach Class Suit To Virginia

SAN FRANCISCO - A California federal judge on Oct. 25 agreed to transfer a breach of contract class complaint to Virginia, finding that the contract's forum-selection clause "does not contravene any anti-waiver provision of California's UCL [unfair competition law] or the strong public policy of California" (Run Them Sweet, LLC v. CPA Global Limited, et al., No. 16-3662, N.D. Calif.; 2016 U.S. Dist. LEXIS 147803).

Mealey's Insurance - Insurer's Negligence Claims Not Barred By Subrogation Clause, Federal Judge Says

ALLENTOWN, Pa. - A subrogation waiver clause included in a heating oil agreement sent to an insured by the heating oil company contravenes public policy because the average consumer does not have the chance to negotiate the provisions in residential heating oil contracts, a Pennsylvania federal judge said Oct. 5 in finding that an insurer is not barred from asserting negligence claims, as the subrogee of its insured, against the heating oil company (State Farm Fire & Casualty Co., et al. v. Petroleum Heat & Power Co. Inc., et al., No. 13-6732, E.D. Pa.; 2016 U.S. Dist. LEXIS 138479).

Mealey's Insurance - 6th Circuit: Claims Based On Pastor's Sexual Acts; No Coverage For $4.35M Award

CINCINNATI - The Sixth Circuit U.S. Court of Appeals on July 5 affirmed a lower federal court's finding that because underlying claims were based on an associate pastor's sexual acts, the victims and their parents cannot recover a $4.35 million award against the pastor from his church's insurer because the policy does not cover an individual's sexual misconduct and because Ohio public policy prohibits insurance for the sexual abuse of a minor (Jacquin Clifford, et al. v. Church Mutual Insurance Co., No. 15-4154, 6th Cir.; 2016 U.S. App. LEXIS 12541).

Mealey's Insurance - Panel: 'Other Insurance' Clause Is Unenforceable In Equitable Contribution Suit

SACRAMENTO, Calif. - An "other insurance" clause cannot be enforced in an equitable contribution action between successive primary insurers, a California appeals panel held April 11, also finding that enforcement of the clause in a primary commercial general liability insurance policy would violate public policy (Certain Underwriters at Lloyds, London v. Arch Specialty Insurance Co., No. C072500, Calif. App., 3rd Dist.; 2016 Cal. App. LEXIS 275).

Mealey's Insurance - Judge: Insurer In Better Shoes To Bear Risk Of Co-Insured's Potential Default

SCRANTON, Pa. - A Pennsylvania federal judge on March 30 held that whether one insured reimburses all or none of the $50,000 it was ordered to pay its insurer for the advancement of defense costs in an underlying criminal proceeding, the insurer has a duty to pay a second insured up to the $100,000 limit of liability pursuant to a public officials liability and employment practices liability insurance policy (Darwin National Assurance Co. v. Luzerne County Transportation Authority, et al., No. 14-2417, M.D. Pa.; 2016 U.S. Dist. LEXIS 41733).

Mealey's Insurance - Judge: Fact Issue Exists As To Whether Insured Agreed To Split Allocation Of Costs

NEW ORLEANS - A Louisiana federal judge held Feb. 29 that although a directors and officers liability insurance policy's allocation clause limiting an insurer's duty to defend is not prohibited by Louisiana public policy, there remains a genuine issue of material fact regarding whether the insured ever agreed to a "fifty-fifty allocation" of defense costs (Housing Authority Of New Orleans v. Landmark Insurance Co., No. 15-1080, E.D. La.; 2016 U.S. Dist. LEXIS 24419).

Mealey's Labor & Employment - Pennsylvania Majority Rejects Argument That Exclusion Is Contrary To Public Policy

HARRISBURG, Pa. - A majority of the Pennsylvania Superior Court on Feb. 12 rejected an insured's argument that a commercial general liability insurance policy's employer's liability exclusion as it relates to a "leased worker" is unconscionable and against public policy, affirming a lower court's ruling in favor of an insurer in a coverage dispute arising from a workplace injury (Westfield Insurance Company v. Astra Foods Inc., et al., No. 1392 EDA 2014, Pa. Super.; 2016 Pa. Super. LEXIS 84).

Mealey's Insurance - Pennsylvania Majority Rejects Argument That Exclusion Is Contrary To Public Policy

HARRISBURG, Pa. - A majority of the Pennsylvania Superior Court on Feb. 12 rejected an insured's argument that a commercial general liability insurance policy's employer's liability exclusion as it relates to a "leased worker" is unconscionable and against public policy, affirming a lower court's ruling in favor of an insurer in a coverage dispute arising from a workplace injury (Westfield Insurance Company v. Astra Foods Inc., et al., No. 1392 EDA 2014, Pa. Super.; 2016 Pa. Super. LEXIS 84).

Mealey's Litigation Procedure - D.C. Judge Confirms $740.3 Million ICSID Award Issued Against Venezuela

WASHINGTON, D.C. - A District of Columbia federal judge on Nov. 20 granted a Canadian gold mining company's petition to confirm a $740.3 million arbitration award issued in its favor and against the Bolivarian Republic of Venezuela, finding that the award did not violate public policy and that all of the relevant factors weighed in favor of confirmation (Gold Reserve Inc. v. Bolivarian Republic of Venezuela, No. 1:14-cv-2014, D. D.C.).

Mealey's Insurance - No Coverage For $16.9M Taxpayer Suit Against Former City Officer, 2nd Circuit Affirms

NEW YORK - The Second Circuit U.S. Court of Appeals on Nov. 18 affirmed a lower federal court's ruling that a public entity management liability protection (PEMLP) policy's insured vs. insured exclusion bars coverage for an underlying municipal taxpayer lawsuit against the former chief administrative officer of the City of Burlington, Vt. (St. Paul Guardian Insurance Co., et al. v. Jonathan Leopold, No. 14-4519, 2nd Cir.).

Mealey's IP/Tech - Panel: Complaint Against Retailer Does Not Include 'Fresh Wrongs'; No Coverage

PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Oct. 23 affirmed a lower federal court's ruling that a commercial general liability insurance policy's prior publication exclusion precludes coverage for the Navajo Nation's trademark infringement claims against retailer Urban Outfitters (The Hanover Insurance Company v. Urban Outfitters, Inc., et al., No. 14-3705, 3rd Cir.; 2015 U.S. App. LEXIS 18459).

Mealey's Insurance - Panel: Complaint Against Retailer Does Not Include 'Fresh Wrongs'; No Coverage

PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Oct. 23 affirmed a lower federal court's ruling that a commercial general liability insurance policy's prior publication exclusion precludes coverage for the Navajo Nation's trademark infringement claims against retailer Urban Outfitters (The Hanover Insurance Company v. Urban Outfitters, Inc., et al., No. 14-3705, 3rd Cir.; 2015 U.S. App. LEXIS 18459).

Mealey's Insurance - Consent Provision For Cleanup Costs Is Not Against Public Policy, Judge Says

NEW YORK - A policy's consent provision requiring an insured to obtain an insurer's consent prior to incurring any expenses for environmental contamination cleanup costs and requiring the insurer not to unreasonably withhold consent is not void as a matter of public policy and must be enforced as written, a New York federal judge said July 13 (SI Venture Holdings LLC v. Catlin Specialty Insurance Co., No. 14-2261, S.D. N.Y.; 2015 U.S. Dist. LEXIS 89925).

Mealey's PI/Product Liability - Appeals Court Upholds Ruling Denying Request To Vacate Arbitration Award

LOS ANGELES - A California judge's decision to deny a woman's request to vacate an arbitrator's decision to award $1,707.11 to a contractor accused of faulty workmanship during renovations to her home was affirmed by a state appeals panel on June 22; it found that the judge did not err in finding that the terms of the construction contract did not violate California's public policy and that she was properly informed about the arbitration process (Rena Morris v. Michael O'Neill, et al., No. B258467, Calif. App., 2nd Dist., Div. 7; 2015 Calif. App. Unpub. LEXIS 4464).

Mealey's Insurance - Federal Judge: Insurer Has To Defend But Not Indemnify Public Accounting Firm

PHILADELPHIA - Finding that there is a disputed issue of fact as to whether a public accounting firm's employee had reason to know, before an accountant's professional liability insurance policy became effective, that a claim could be reasonably anticipated, a Pennsylvania federal judge on May 18 concluded that the insurer has a duty to defend but does not have to indemnify the firm against an underlying lawsuit alleging that the firm and its employee breached their professional duty of confidentiality (Navigators Insurance Co. v. Resnick Amsterdam Leshner, et al., No. 14-5158, E.D. Pa.; 2015 U.S. Dist. LEXIS 64385).

Mealey's Insurance - Judge: No Coverage For Alleged Scheme Involving Medical Records Processing Fees

CHARLESTON, W.Va. - A West Virginia federal judge on April 16 found that the "common theme" of an underlying complaint against a hospital and a records-imaging and storage company is deliberate, intentional conduct that led to an expected, desired or foreseeable result and not a chance occurrence that arose from unknown causes, finding that an insurer has no duty to defend or indemnify the defendants against claims that they violated public policy by engaging in a scheme that misrepresented the availability of a more reasonable cost of receiving medical records (Westfield Insurance Co. v. Records Imaging & Storage Inc., et al., No. 14-18854, S.D. W.Va.; 2015 U.S. Dist. LEXIS 49986).

Mealey's Litigation Procedure - 5th Circuit Reverses Decision That Award Violated Public Policy

NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on April 16 found that a district court erred in finding that an arbitration award violated public policy, reversing a decision that refused to enforce the award in a case filed by a seaman, who alleged that he was injured aboard a vessel (Lito Martinez Asignacion v. Rickmers Genoa Schiffahrts, No. 14-30132, 5th Cir.; 2015 U.S. App. LEXIS 6245).

Mealey's Insurance - New Jersey Judge: Sandy Storm Surge Losses Not Subject To Policies' Flood Sublimits

NEWARK, N.J. - A New Jersey federal judge on March 23 found that "all risks" property insurance policies' flood sublimits do not apply to a publicly traded diversified energy company insured's losses caused by storm surge resulting from Superstorm Sandy (Public Service Enterprise Group, et al. v. ACE American Ins. Co., et al., No. ESX-L4951-13, N.J. Super., Law Div., Essex Co.; 2015 N.J. Super. Unpub. LEXIS 620).

Mealey's Insurance - Adjuster Lacks Standing To Bring False Claims Suit Against Insurers, Judge Finds

HOUSTON - A federal judge in Texas on Jan. 29 held that an insurance adjuster lacked standing to bring claims that a number of insurance companies violated the False Claims Act (FCA) by preparing and submitting inflated claims on flood insurance policies backed by the Federal Insurance Administration's (FIA) National Flood Insurance Program (NFIP), while reducing claims paid on privately backed wind insurance policies, finding that his allegations were based on publicly disclosed information (United States of America, ex rel. Kermith Sonnier v. The Standard Fire Insurance Company, et al., No. H-12-1065, S.D. Texas; 2015 U.S. Dist. LEXIS 10006).

Mealey's Litigation Procedure - U.S. High Court Declines Petition In Arbitration Agreement Dispute

WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 20 declined to hear the appeal of a ruling by the California Supreme Court that an arbitration agreement requiring an employee as a condition of employment to give up the right to bring a representative action under the California Labor Code's Private Attorney General Act (PAGA) in any forum is contrary to public policy (CLS Transportation Los Angeles, LLC v. Arshavir Iskanian, No. 14-341, U.S. Sup.; 2015 U.S. LEXIS 735).

Mealey's IP/Tech - 9th Circuit Denies Rehearing Of 'StreetSurfer' Trademark Coverage Dispute

PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Nov. 14 refused to reconsider its ruling that an insurance policy's prior publication exclusion bars coverage for underlying claims that the insured infringed on the claimant's use of the "StreetSurfer" trademark to market his skateboards (Street Surfing LLC v. Great American E&S Insurance Co., No. 12-55351, 9th Cir.).

Mealey's Insurance - 9th Circuit Denies Rehearing Of 'StreetSurfer' Trademark Coverage Dispute

PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Nov. 14 refused to reconsider its ruling that an insurance policy's prior publication exclusion bars coverage for underlying claims that the insured infringed on the claimant's use of the "StreetSurfer" trademark to market his skateboards (Street Surfing LLC v. Great American E&S Insurance Co., No. 12-55351, 9th Cir.).