A Utah federal district court has held that claims based on similar acts of wrongdoing were barred by a prior notice exclusion despite geographic differences among the putative class definitions.  Starr Indem. & Liab. Co. v. Monavie, Inc., 2019 WL 1227930 (D. Utah Mar. 5, 2019).  The court also ruled that the insurer was entitled to recoup defense costs incurred in connection with the non-covered claims.…

An Alabama federal district court has ruled that a third-party claim seeking indemnification for a medical malpractice suit, allegedly resulting from the insured’s allegedly faulty performance of technology services, was barred from coverage by “medical services” and bodily injury exclusions.  Jackson, Key & Assocs., LLC v. Beazley Ins. Co., Inc., 2018 WL 6710041 (S.D. Ala. Nov. 30, 2018) (report and recommendation adopted on December 20, 2018).…

A Florida federal district court has ruled that a claim asserting that an insured’s negligent data security practices led to a payment card breach did not trigger personal injury coverage under a CGL policy.  See St. Paul Fire & Marine Ins. Co. v. Rosen Millennium, Inc., No. 6:17-cv-540-Orl-41GJK (M.D. Fla. Sept. 28, 2018).  The court reasoned that because the hacker’s conduct, not the insured’s omissions, led to the breach, the insured did not make…

A Delaware trial court, applying Tennessee law, has ruled that an insurer was entitled to recover defense costs it advanced under a reservation of rights for a non-covered claim.  Catlin Specialty Ins. Co. v. CBL & Assocs. Props., 2018 WL 3805868 (Del. Super. Ct. Aug. 9, 2018).  In so doing, the court cited the American Law Institute Restatement on the Law of Liability Insurance (Restatement), but it ultimately refused to follow the Restatement, concluding…

A Nevada federal district court has applied the “direct means direct” rule to conclude that losses an insured suffered from payment card chargebacks when certain employees made fraudulent charges on customers’ payment cards were only the “indirect” result of employee theft, and therefore not covered under the insured’s commercial crime policy.  CP Food & Beverage, Inc. v. U.S. Fire Ins. Co., No. 1:16-cv-02421-APG-GWF (D. Nev. Aug. 6, 2018).…

An Ohio federal district court has held that a specific litigation exclusion concerning a lawsuit brought by a state attorney general alleging that the insured oversupplied “pill mills” barred coverage for a show cause order the insured later received from a federal law enforcement agency concerning some of the same alleged misconduct.  Miami-Luken, Inc. v. Navigators Ins. Co., 2018 WL 3424448 (S.D. Ohio July 11, 2018).…

The United States Court of Appeals for the Fifth Circuit, applying Texas law, has reversed an order granting an insurer judgment on the pleadings, holding that a breach of contract exclusion did not bar coverage for a demand received by an insured retailer from its credit card processor for indemnification and other relief arising from a payment card breach.  Spec’s Family Partners, Ltd. v. Hanover Ins. Co., 2018 WL 3120794 (5th Cir. June…