Insurer must fund $50M settlement despite assignment of claim to class with agreement not to pursue policyholder A New York district court, applying New York law, granted partial summary judgment, finding that Illinois Union Insurance Company (“Illinois Union”) must fund a nearly $50 million class action settlement for alleged Telephone Consumer Protection Act (“TCPA”) violations.  The court held that Illinois... Read More

$4.6M award reduced to $25k because plaintiff failed to show the outcome would have been better had the insurer defended The Seventh Circuit Court of Appeals, in an opinion authored by Justice Easterbrook (joined by Bauer and Rovner), reduced a bad faith judgment from $4.6M plus interest to $25k plus interest.  The action was brought by a plaintiff injured in... Read More

$7.5M for Travelers’ failure to settle within limits and $2.7M §155 attorneys’ fees; estopped from asserting pollution exclusion In a 2-1 opinion, the Illinois Appellate Court for the Fifth District affirmed summary judgment for the policyholder, Rogers Cartage Co., (“Rogers”) against two Travelers units and in favor of Rogers with respect to claims filed by Solutia Inc. and Pfizer Inc.... Read More

Parking lot shooting covered rejecting insurer argument it didn’t result from a defect in the premises. An Illinois appellate court in the first district, applying Illinois law, reversed the trial court’s grant of summary judgment in favor of an insurer and held the insurer had a duty to defend and indemnify the policyholder for claims filed by two individuals who... Read More

Claim excluded by Virus and Bacteria and Pollution Exclusions. The Wisconsin Court of Appeals, Fourth District, affirmed a trial court finding that the plaintiff-policyholders’ claims were barred based on mold (Virus and Bacteria) and pollution exclusions in the insurers’ policies.  Michael and Rhonda Sue Foley hired Harry Simons, Jr. to remodel their house.  The Foleys sued Simons alleging that Simons’... Read More

Insurer ordered to produce specimen forms and a witness to testify on those forms. A federal magistrate judge from the Western District of New York, applying New York law, held that policyholder American Precision Industries, Inc. (“API”) was entitled to deposition testimony and policy forms from an insurer in connection with its effort to prove up lost policies, and therefore... Read More

“Operations Clause” precluded coverage for contamination pre-dating Conrail’s ownership. A Pennsylvania appeals court, applying Pennsylvania law, affirmed the lower court’s ruling that interpreted an “Operations Clause” to require insurance coverage only for environmental contamination that was caused by or grew out of the insured’s operations.  Thus, while the insured paid millions in remediation and other expenses due to contamination at... Read More

Alleged extrinsic evidence outside complaint did not trigger defense duty. A Washington federal court, applying Washington law, granted Cincinnati Insurance Company’s motion for summary judgment, holding that the insurer need not cover its insured, Zaycon Foods, LLC (“Zaycon”), in a lawsuit brought by an ousted, former CEO.  Zaycon conceded that the only potential for coverage of the underlying lawsuit would... Read More