Say What You Mean and Mean What You Say, Says California Federal District Court

A California federal district court determined a standard Breach of Contract Exclusion under Coverage B of a CGL policy did not preclude the duty to defend for alleged disparagement. In MedeAnalytics, Inc. v. Federal Insurance Co., the United States District Court for the Northern District of California interpreted the exclusion very narrowly, finding it applied only to actual — and not alleged — breaches of contract and found a duty to defend.

As background, the claimant alleged the policyholder made disparaging comments in order …

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Wisconsin’s Strict Exhaustion Requirement Burns Insurer

In Burgraff v. Menard, Inc., 2016 WI 11 (Wis. 2016), the Wisconsin Supreme Court affirmed a Court of Appeals decision that determined Millers First Insurance Company breached its continuing duty to defend Menard, Inc. Specifically, the issue was whether Millers First should have continued its defense of Menard even after it reached a settlement with the plaintiff, Kenneth Burgraff, for its proportionate share of the claim. This is an important decision which reiterates the strict requirements of complete exhaustion in order for an insurer’s …

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Mutually Exclusive Polices Found to Share Defense Obligation

When the use of an auto is involved in an accident, normally a professional liability insurer whose policy excludes claims arising out of the use of an auto will have no obligation to share with the auto insurer in the defense of the policyholder. However, that is exactly what occurred in Knightbrook Ins. Co. v. Northfield Ins. Co., 2016 U.S. Dist. LEXIS 9265 (E.D. Pa. Jan. 26, 2016).

In Knightbrook, an underlying plaintiff brought suit against the policyholder, an ambulance company. The underlying …

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Hartford v. Tempur-Sealy: Can an Insurer Rest Easy When a Claim Does Not Appear to Be Covered?

When a complaint specifically denies that the plaintiff is seeking damages covered by an insurance policy, it seems logical that the insurer would not have a duty to defend. However, taking a very broad view of the duty to defend, a California federal court recently held that an insurer did, in fact, have to provide a defense even though the complaint, on its face, did not include a claim for damages covered under the policy. (Hartford Fire Ins. Co. v. Tempur-Sealy Int’l, Inc., …

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Insurer Entitled to Reimbursement of Defense Costs for Non-Covered Claims

In Chiquita Brands Int’l, Inc. v. Nat’l Union Fire Ins. Co., 2015-Ohio-5477 (Oh. Ct. App. Dec. 30, 2015), the Court of Appeals of Ohio held that an insurer was entitled to recover defense costs and prejudgment interest pursuant to restitution theory. Ultimately, however, the net effect of Chiquita Brands Int’l, Inc. is somewhat diminished by the Court of Appeals’ statement that its holding was narrow and limited to the particular posture and facts of the case, which while not exceeding rare, may be difficult …

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Wrongful Debt-Collection is Not Wrongful Repossession; Insured is Not Covered

Parties to an insurance contract beware; a Missouri Court of Appeal’s analysis to determine the presence of an ambiguity in an insurance contract is more complex than meets the eye. In, Wolfe Automotive Group, LLC v. Universal Underwriters Insurance Company, the Eighth Circuit Court of Appeals affirmed the District Court for the Western District of Missouri’s decision denying that an insurer had a duty to defend its insured. The insured was a used-car dealership that had an umbrella policy that provided indemnity and defense …

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Another Nail in the Junk Fax Coffin: Wisconsin Joins Illinois, California, Michigan, and Oklahoma in Finding No Coverage for TCPA Suits

The Wisconsin Court of Appeals held in a recent decision that a standard TCPA exclusion precludes coverage for all causes of action brought by the plaintiff that emanated from the unauthorized sending of faxes. This includes a common law conversion cause of action, as well as a cause of action for violations of the Telephone Consumer Protection Act (TCPA).

As background, in State Farm Fire & Casualty Co. v. Easy PC Solutions, LLC, No. 2014AP2657, 2015 Wisc. App. LEXIS 855 (Wisc. Ct. App. Dec. …

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A Sporting Retailer’s Bid for Coverage Gets Punted by the Ninth Circuit

The Ninth Circuit recently handed down a decision holding that insurers did not have a duty to defend their policyholder, a sporting goods retailer, in several ZIP code class action lawsuits.  The class action lawsuit all arose out of alleged violations of the Song-Beverly Act, a California statute which prohibits retailers from collecting customer ZIP code information as a purported requirement of credit card transactions. The court held that policy exclusions negated coverage.

In Big 5 Sporting Goods Corp. v. Zurich American Insurance Co., …

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Despite Irrebuttable Presumption Of Prejudice, Insurer Who Failed To Timely Disclaim Coverage For Default Judgment Against Its Insured Must Pay

In Montpelier U.S. Insurance Co., v. 240 MT. Hope Realty Co., et al., 2015 WL 6395949 (S.D.N.Y. Oct. 22, 2015), the United States District Court for the Southern District of New York joined the ever-growing list of courts interpreting N.Y. Insurance Law §3420(d)(2) to hold insurers who issue or deliver policies in New York strictly accountable for failing to timely disclaim coverage for bodily injury claims arising out of accidents occurring within the state.

This concept is by no means a fresh one in …

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Beware of Boilerplate Claims for “Other Relief Deemed Appropriate” — They Could Trigger a Duty to Defend

Boilerplate demands for “all other relief deemed appropriate” are routine. However, they should not be overlooked when analyzing whether a complaint triggers an insurer’s duty to defend. In Country Mutual Insurance Company v. Bible Pork, Inc. (No. 08-MR-14), the Fifth District Court of Appeals in Illinois held that a nuisance suit against a livestock producer seeking injunctive relief triggered a duty to defend. The appellate court’s decision is significant because the court held that a complaint that appeared to seek only injunctive relief, also asserted …

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