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 …

The United States District Court for the Eastern District of Virginia, applying Virginia law, has held that a professional liability policy’s exclusion for “negligent supervision” of funds applied to bar coverage for damages resulting from an insured attorney’s reckless investment of trust assets.  ALPS Prop. & Cas. Ins. Co. v. Farthing, 2018 WL 4927366 (E.D. Va. Sept. 26, 2018).  The court also held that the insurer was entitled to recoup defense costs paid…

The United States District Court for the Northern District of Illinois has held that three claims brought by a resident against a condominium owners’ association for alleged discrimination and retaliation involved related wrongful acts and therefore are properly treated as a single Claim deemed first made during the claims-made policy period when the first such claim was asserted. Great Am. Ins. Co. v. State Parkway Condo. Ass’n et al., 2018 WL 433623 (N.D. Ill. Sept. …

The Supreme Court of Montana has held that a Montana statute allowing insurers to “prevent a recovery” under an insurance policy in certain circumstances, including when the insured made misrepresentations or omissions in its application, does not provide a right to rescind the policy ab initio.  ALPS Prop. & Cas. Ins. Co. v. McLean & McLean, PLLP, 2018 WL 3737950 (Mont. Aug. 7, 2018).  The court also held that an innocent insured attorney had…