The United States District Court for the Northern District of Illinois, applying Illinois law, has held that there is no coverage under a D&O policy where the insured did not timely report a declaratory judgment lawsuit and instead sought coverage only after an amended complaint was filed in the successive policy period.  Hanover Ins. Co. v. R.W. Dunteman Co., 2020 WL 1275002 (N.D. Ill. Mar. 17, 2020).  The court held that the complaints were…

The United States District Court for the Northern District of Mississippi, applying Mississippi law, held that only a “Social Engineering Fraud” provision responded to a loss resulting when an unknown third-party, posing as the insured’s vendor, sent fraudulent banking information and the insured issued payments based on that information.  Miss. Silicon Holdings, LLC v. AXIS Ins. Co., 2020 WL 868874 (N.D. Miss. Feb. 21, 2020).  The court, holding that the policy provisions were unambiguous, rejected…

The United States Court of Appeals for the First Circuit, applying Massachusetts law, has held that an SEC investigation of the insured company constituted a claim “first made” when the SEC’s formal order of investigation issued.  Jalbert v. Zurich Servs. Corp., No. 18-2244, 2020 WL 1322787 (1st Cir. March 20, 2020).  As a result, two excess insurers whose policies incepted after the formal order entered did not owe coverage.  Wiley represented one of the…

An Illinois intermediate appellate court, applying Illinois law, has held that an insurer must defend an attorney against a malpractice claim seeking damages for alleged negligence in the amount of fees paid to the attorney, concluding that the “legal fees” exclusion in the policy did not apply because the injury suffered by the claimant was not a consequence of the lawyer’s fees.  Illinois State Bar Ass’n Mut. Ins. Co.  v. Canulli, No. 1-19-0142 (Ill. …

The Fifth Circuit, applying Louisiana law, has held that coverage was unavailable for an $11.7 million settlement with the government because the settlement did not relate to “professional services” provided by the insured to its “client.”  IberiaBank Corp. v. Illinois Union Ins. Co., 2020 WL 1284958 (5th Cir. Mar. 18, 2020).…

The Delaware Supreme Court today handed securities defendants a major victory, concluding that forum selection provisions in Delaware companies’ registration statements that required that certain securities litigation be brought solely in federal district court were facially valid.  Salzberg, et al. v. Sciabacucchi, Case No. 314 2019 (Del. Mar. 18, 2020).  In doing so, it overturned the Delaware Chancery Court’s previous conclusion that such provisions were unenforceable to the extent that they required any claim…

The U.S. Court of Appeals for the Eighth Circuit, applying Kansas law, has held that a contract exclusion bars coverage for a lawsuit asserting claims for conversion and breach of fiduciary duty for failure to purchase a deceased owner’s stock under a stock repurchase agreement.  Russell v. Liberty Ins. Underwriters, Inc., 2020 WL 812910 (8th Cir. Feb. 19, 2020).  The court also held that the agreement was not an employee benefit plan that would…