The United States District Court for the Western District of New York, applying New York law, held that an insurer did not owe a fiduciary duty to its insured when the insured was represented by independent defense counsel, nor did the insurer breach its contractual duties to its insured in paying defense costs, which ultimately exhausted the policy limit.  Korn v. Federal Ins. Co., 2019 WL 4277187 (W.D.N.Y. Sept 10, 2019).…

The U.S. District Court for the Middle District of Florida, applying Florida law, held that a directors and officers liability insurance policy did not provide coverage for a claim asserted by a receiver seeking the return of bonus and other compensation amounts paid to a former director and officer of the company because (1) the policy’s profit exclusion applied; and (2) the claw back claim did not arise out of a “Wrongful Act.”  Desai v. …

The U.S. Court of Appeals for the Eleventh Circuit, applying Florida law, has held that a securities exclusion in a private company directors and officers insurance policy broadly barred coverage for all claims in an underlying lawsuit brought by former shareholders of an insured company arising out of the sale of their shares.  Colorado Boxed Beef Co., Inc. v. Evanston Ins. Co., No. 19-10326, 2019 WL 2479321 (11th Cir. June 13, 2019).…

The U.S. District Court for the Southern District of California, applying California law, held that two lawsuits against a real estate broker involving his dual representation of buyers and sellers in the same real estate transaction arose from the same wrongful act, such that the second suit was deemed a claim first made at the time the first suit was filed—prior to the inception of the broker’s claims-made errors and omissions policy.  Martin v. QBE …

The U.S. District Court for the Central District of California, applying California law, held that a warranty exclusion barred coverage where a start-up company made material misrepresentations regarding contemplated acquisitions in its policy application.  Scottsdale Ins. Co. v. CSC Agility Platform, Inc., 2019 WL 1452910 (C.D. Cal. Feb. 4, 2019).  The court further held that the insurer did not waive its right to enforce the warranty exclusion, nor was it estopped from doing so.…

The U.S. District Court for the Southern District of California, applying California law, has held that neither fiduciary nor employment benefits liability coverage applied to claims seeking benefits under an insured company’s employee benefits plan because the company’s liability arose, not from negligent acts or breaches of fiduciary duty, but from its contractual obligation to provide employees with benefit plans.  Erickson-Hall Constr. Co. v. Scottsdale Ins. Co., 2019 WL 719204 (S.D. Cal. Feb. 20, 2019)…

Applying North Dakota law, the United States Court of Appeals for the Eighth Circuit has held that an insurance policy issued to a parent company and several of its commonly owned affiliates did not provide coverage for a lawsuit against the owner of the companies and one of the insured subsidiaries for breach of a noncompetition covenant in an asset purchase agreement.  Mau v. Twin City Fire Ins. Co., — F.3d –, 2018 WL 6379281 …