In Lemko Corp. v. Federal Insurance Co., No. 12 C 03283, 2014 U.S. Dist. LEXIS 138667 (N.D. Ill. Sept. 30, 2014), the Northern District of Illinois granted summary judgment in favor of Federal Insurance Company (Federal) and Cincinnati Insurance Company (Cincinnati), finding that they had no duty to defend Lemko Corporation in a business competition and intellectual property infringement lawsuit brought by Motorola. The underlying complaint involved several claims by Motorola against Lemko originating from Lemko accessing “Motorola computers without authorization, or in excess …
Continue ReadingCategory: Emerging Issues
Knowing Violation of the Rights of Another Exclusion Precludes Coverage for Consumer Protection Suits
The Southern District of New York held that two insurers had no duty to defend or indemnify their insured against lawsuits alleging deceptive “data pass” practices. Nat’l Fire Ins. Co. of Hartford v. E. Mishan & Sons, Inc., No. 13-cv-5774, 2014 U.S. Dist. LEXIS 130608 (S.D.N.Y. Sept. 16, 2014). The underlying actions (one in Illinois state court and the other in the Western District of Michigan) alleged similar claims against E. Mishan & Sons, Inc. (dba Emson, Inc.). Specifically, they alleged that Emson would …
Continue ReadingBackroom Dealings Impair Coverage For High Stakes TCPA Class Settlement
In Central Mutual Insurance Co. v. Tracy’s Treasures, Inc., No. 1-12-3339, 2014 IL App (1st) 123339 (Sept. 30, 2014), the Illinois Appellate Court expressed great skepticism regarding an insured’s settlement of an underlying TCPA without the insurer’s knowledge.
Central insured Tracy’s Treasures under primary and excess liability policies from 1997 – 2005 and 2002 – 2005, respectively. Idlas filed suit in March 2007 against Tracy’s on behalf of himself and the putative class, asserting violations of the TCPA resulting from Tracy’s sending of junk faxes. …
Continue ReadingSecond Circuit Holds Insurer Need Not Show Prejudice to Assert Late Notice Where Policy Issued Outside of New York
In Indian Harbor Insurance Co. v. City of San Diego (2d Cir., No. 13-4244-cv, Oct. 2, 2014), the Second Circuit affirmed summary judgment in favor of Indian Harbor, finding based on a late notice defense that Indian Harbor had no duty to indemnify the City for three pollution claims. The main issue was whether New York Insurance Law § 3420(a)(5) applied and required Indian Harbor to prove prejudice as a result of the City’s untimely notice.
The policy in question, a pollution and remediation legal …
Continue ReadingTCPA Lawsuit Quacks Again: Courts Continue to Apply Violation of Statutes Exclusion in Favor of Insurers
The Illinois Appellate Court recently modified and reissued an earlier ruling involving an insurer’s duty to defend and indemnify against an underlying TCPA lawsuit. G.M. Sign, Inc. v. State Farm Fire & Cas. Co., No. 2-13-0593, 2014 IL App (2d) 130593 (Modified September 2, 2014). We previously reported on this important decision on May 19, 2014. See, If It Walks Like a Duck and Talks Like a Duck … IL Appellate Court Applies Violation of Statutes Exclusion To Preclude Coverage for Non-TCPA Counts in …
Continue ReadingCourt Finds TCPA Violations Do Not Relate to Other Lawsuits Involving Non-TCPA Claims
The Superior Court of Delaware, New Castle County, ruled that RSUI Indemnity Company owed its insured, Sempris, LLC, a duty to defend and indemnify against an underlying TCPA lawsuit pending in the United States District Court for the Northern District of Illinois. RSUI Indem. Co. v. Sempris, LLC, C.A. No. N13C-10-096, 2014 Del. Super. LEXIS 449 (Sept. 3, 2014).
The coverage dispute arose out of the following circumstances. RSUI issued a D&O liability policy to Sempris effective from March 1, 2013 through March 1, …
Continue ReadingToo Big To Fail? MetLife To Fight Federal Agency’s Designation of the Insurer as a ‘Systemically Important Financial Institution’
In the wake of the 2008 financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). After Americans quickly learned that financial institutions previously thought “too big to fail” could, in fact, fail, Dodd-Frank equipped the Federal Reserve with unprecedented regulatory power to ensure safeguards were in place to prevent a similar crisis in the future. Dodd-Frank established the Financial Stability Oversight Council (FSOC), a government organization which has the authority to designate financial institutions as Systemically Important Financial Institutions (SIFIs). …
Continue ReadingDistrict Court Finds Sale of Knock Off Fendi Products Does Not Constitute “Advertising Injury”
The United States District Court for the Southern District of New York ruled that United States Fidelity & Guaranty Co. (USF&G) had no obligation to indemnify its insured, Ashley Reed, for a judgment of $30 million stemming from its sale and distribution of counterfeit Fendi products. United States Fid. & Guar. Co. v. Ashley Reed Trading, Inc., No. 11 Civ. 4782, 2014 U.S. Dist. LEXIS 116280 (S.D.N.Y. Aug. 20, 2014).
The coverage dispute arose out of the following circumstances. USF&G issued three CGL policies …
Continue ReadingDistrict of Columbia Ruling Highlights Importance of Reservation of Rights, but Preserves Potential Application of Deductibles
The district court for the District of Columbia recently ruled an insurer must reserve its rights for each lawsuit, despite the similarities or relatedness of lawsuits for which the insurer has reserved rights to disclaim coverage, at the risk of waiving coverage defenses. Yet, notwithstanding the insurer’s failure to properly reserve its rights, the court held that the insurer still maintains the ability to assert that policy deductibles apply on a per claim, per claimant basis in TCPA cases. Cincinnati Ins. Co. v. All Plumbing, …
Continue ReadingSixth Circuit: ‘Advertising Idea’ Must Involve ‘Plan, Scheme, or Design’ to Bring Public Attention; Standing Alone Customer List is Not a ‘Plan’
On Friday, August 15, The 6th Circuit Court of Appeals upheld an order from the Eastern District of Kentucky, granting Liberty Corporate Capital Limited’s declaratory judgment determining it has no duty to indemnify or defend the plaintiff firearms retailer.
Security Safe Outlet (SSO), a firearms retailer in Kentucky, acquired BudsGunShop.com LLC’s (the website) customer information database through their employee, Matthew Denninghoff, who previously worked in IT for the website. Denninghoff allegedly maintained a copy of the website’s customer database and supplied it to his …
Continue Reading