Colin Willmott

All articles by Colin Willmott

 

Sixth Circuit Uses Every Tool in the Box To Build Case for Coverage for Defrauded Policyholder

July 12, 2018, we reported on the Medidata decision handed down by the Second Circuit in which the court found coverage for a claim resulting from social engineering fraud. We suggested the ruling in Medidata lacks persuasive power due to its unusual factual circumstances and atypical policy language. The Sixth Circuit’s decision in American Tooling Center, Inc. v. Travelers Casualty & Surety Co. of America, No. 17-2014, 2018 WL 3404708 (6th Cir. July 13, 2018), will have more persuasive power,
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Second Circuit’s Decision Upholding Social Engineering Fraud Coverage Likely a Paper Tiger

In a case closely monitored by the insurance industry, the Second Circuit upheld in a non-precedential summary order a New York federal district court’s summary judgment finding coverage under the computer fraud coverage of a commercial crime policy. Medidata Solutions, Inc. v. Fed. Ins. Co., No. 17-2492, 2018 WL 3339245 (2d Cir. 2018). Although the policyholders are apt to tout the decision as a seismic victory, the atypical policy language and factual circumstances should greatly limit its persuasive value. As
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The Modern Fraudster: How Courts Are Responding to Social Engineering Fraud

In an article for Insurance Journal, Goldberg Segalla partner Jonathan L. Schwartz and associate Colin B. Willmott, members of the Global Insurance Services Practice Group in the firm’s Chicago office, write about social engineering fraud (SEF) and questions over availability of insurance coverage for SEF under commercial crime policies — an issue the Second and Sixth Circuit Courts of Appeals are set to clarify in 2018. SEF includes now-common types of fraud involving digital communications: phishing/whaling, spoofing, and impersonating or pretexting. “A common example [of SEF]
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Insurer Scores a Slam Dunk in TCPA Suit Before the Ninth Circuit

A recent decision by the Ninth Circuit is sure to catch the eye of insurers for its favorable reasoning rejecting coverage as well as a potential warning sign that policyholders are seeking coverage for Telephone Consumer Protection Act (TCPA) suits beyond CGL policies. In Los Angeles Lakers, Inc. v. Federal Insurance Company, No. 15-55777, 2017 WL 3613340 (9th Cir. Aug. 23, 2017), the Ninth Circuit determined there was no coverage for violations of the TCPA under a D&O policy. In
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Frankly, My Dear, I Don’t Give a “Dam”: Seventh Circuit Holds Professional Liability Insurer Off the Hook in Neighborhood Dispute Tangentially Related to Unobtained Dam Permit

In Madison Mutual Insurance Co. v. Diamond State Insurance Co., No. 15-3292 (7th Cir. Mar. 21, 2017), the Seventh Circuit handed down a decision delineating the obligations between a professional liability insurer and a homeowner’s insurer. At bottom, the court refused to hold a professional liability insurer responsible for the defense of a suit that only tangentially referencing the insured’s professional services. As background, Dr. William and Wendy Dribben purchased a house in 1999 at Heartland Oaks, an exclusive development.
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Insurers Beware: Wisconsin Court of Appeals Hold Expected/Intended Injury Exclusion Inapplicable to Injuries Arising from an Insured’s Negligent Supervision of its Employee

In Talley v. Mustafa (Wisc. App., Apr. 5, 2017), the Wisconsin Court of Appeals found coverage available in an underlying negligence suit against a store owner and reversed the circuit court’s grant of summary judgment in favor of Auto Owners Insurance Company. The court’s holding, in essence, was that a reasonable person in the insured’s position would have expected that his insurance policy would cover a customer’s negligence suit, including negligence in training/supervising an employee who contributed to the customer’s
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Do Not Pass Go, Do Not Collect Hundreds of Thousands of Dollars: Seventh Circuit Parses Through Insured’s Gamesmanship to Find No CGL Coverage for Settlement of Faulty Workmanship Claim

In Allied Property & Casualty Insurance Co. v. Metro North Condominium Ass’n, No. 16-1868, 2017 U.S. App. LEXIS 4107 (March 8, 2017), the Seventh Circuit found coverage unavailable for a settlement of a lawsuit against a subcontractor alleged to have improperly installed windows at a condominium building. The court’s holding, in essence, was that the bases for the settlement were inconsistent with the claims against the subcontractor, and the only such viable claims could not possibly have been covered under
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Illinois Coverage Litigations Beware! Attorney’s Failure to Properly Investigate Results in Severe Sanctions

In American Access Casually Co. v. Alcauter, 2017 IL App (1st) 160775, the Illinois Appellate Court, First District, affirmed the district court’s imposition of sanctions against the plaintiffs, American Access Casually Company (AACC) and its coverage counsel, James Newman, pursuant to Illinois Supreme Court Rule 137. Specifically, the Appellate Court held that there were sufficient grounds to uphold the sanctions because of the plaintiffs’ failure to properly investigate the continuing validity of their lawsuit, their failure to turn over pertinent
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Gotta Keep Em Separated: District Court Rejects Theory of Coverage that Trademark Infringement Suit Constitutes Trade Dress or Slogan Infringement under Coverage B

In H5G, LLC v. Selective Insurance Company, 2017 U.S. Dist. LEXIS 23937 (S.D. Oh. Feb. 21, 2017), an Ohio federal district court granted an insurer’s motion for summary judgment with respect to its obligations to defend or indemnify its insured against an underlying trademark infringement suit. In the underlying suit, High 5 Sportswear (High Five) alleged H5G infringed its trademarks and committed cybersquatting. H5G’s CGL policy issued by Selective Insurance Company afforded coverage for the infringement of another’s copyright, trade
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Engineering Firm Gets Soaked By Professional Services Exclusions in Water Treatment Plant Claim

In an unpublished decision, the Sixth Circuit affirmed a lower court’s decision judgment in favor of two insurers. Specifically, the Sixth Circuit broadly construed professional services exclusions to preclude coverage. As background, the Village of Dexter in Michigan hired an engineering and architecture firm, Orchard, Hiltz, & McCliment, Inc. (OHM), to oversee the upgrade of a wastewater treatment plant. The project included both the design and construction phases. Notably, Dexter approved three OHM proposals for professional engineering services. In addition,
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A Bad Faith Cautionary Tale: Ninth Circuit Affirms $8.7 Million Award for Bad Faith Coverage Denial

In Millennium Laboratories, Inc. v. Darwin Select Insurance Co., No. 15-55227, 2017 U.S. App. LEXIS 1533 (9th Cir. Jan. 27, 2017), the Ninth Circuit held that Darwin Select Insurance Company breached its duty to defend its insured, Millennium Laboratories, Inc., against two third-party lawsuits (Ameritox and Calloway). The court further held that Darwin’s failure to defend Millennium was in bad faith. As background, Millennium filed a complaint seeking coverage regarding two underlying lawsuits alleging Millennium told its customers that its
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No Duty, No Problem: Seventh Circuit Finds Absence of Duty for Insurance Broker to Non-Client in Connection with Fraudulent Insurance Scheme

The Seventh Circuit recently handed down a decision in which it refused to recognize a negligence claim against an insurance broker which would have expanded the duties of brokers and agents beyond those articulated in the Illinois Insurance Placement Liability Act (IIPLA), 735 ILCS 5/2 2201. In M.G. Skinner & Associates Insurance Agency v. Norman-Spencer Agency, Inc., No. 15-2290, 2017 U.S. App. LEXIS 63 (7th Cir. Jan. 4, 2017), the Seventh Circuit affirmed the district court’s grant of summary judgment
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What’s Yours is Mine and What’s Mine Isn’t Covered: Illinois Federal Court Rejects Coverage for Suit Seeking Restitution

In Westport Insurance Corp. v. M.L. Sullivan Insurance Agency, Inc., No. 15 C 7294, 2017 U.S. Dist. LEXIS 1527 (N.D. Ill. Jan. 5, 2017), an Illinois federal district court underscored the importance of a policy’s damages requirement when it granted judgment on the pleadings in favor of Westport Insurance Corporation and against its insured M.L. Sullivan Insurance Agency. In the underlying suit, American Inter-Fidelity Exchange (AIFE) alleged Sullivan and one of its employees provided false information about insurance premiums due
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A Contract by Any Other Name Would … Still Be a Contract: Wisconsin Court of Appeals Enforces Breach of Contract Exclusions to Preclude Coverage for Business Competition Claim

In Great Lakes Beverages, LLC v. Wochinski (Jan. 18, 2017), the Wisconsin Court of Appeals held that AMCO had no duty to defend or indemnify its insured against the underlying third-party tortious interference with contract claim because the breach of contract exclusions applicable to personal and advertising injury squarely applied. As background, K-Way Systems contracted with Wochinski to purchase his company. The purchase agreement contained an asset purchase agreement, a covenant not to compete, and a supply agreement. Relations between
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Five Yards for Encroachment: Prematurity Doctrines Found to Preclude Insurer’s Use of Extrinsic Evidence to Evade Coverage

In Pekin Insurance Co. v. St. Paul Lutheran Church, 2016 IL App (4th) 150966, the Illinois Appellate Court refused, based on the Prematurity Doctrine, to consider extrinsic evidence in an insurer’s declaratory judgment action in connection with an underlying wrongful death suit. As background, Hope Farney, as administrator of the estate of Kitty Mullins, sued St. Paul Lutheran Church (Church) for wrongful death. She alleged that a Church employee, Matthew Geerdes, used his personal vehicle for Church business and negligently
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Don’t Let The Door Hit You on the Way Out: Insurer Loses Coverage Suit Involving Injuries Sustained By Fitting Room Door

In Selective Insurance Co. of South Carolina v. Target Corporation, No. 16-1669, 2016 U.S. App. LEXIS 23370 (7th Cir. Dec. 29, 2016), the Seventh Circuit affirmed an Illinois district court’s decision finding coverage for an additional insured after parsing through the language of two contractual agreements. The coverage dispute arose when a customer shopping at a Target store was injured after a fitting room door came off and fell on her in December 2011. The customer filed suit against Target,
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No Magic Words Needed To Trigger Application of the Construction Contract Anti-Indemnification Statute Says Illinois Appellate Court

In Pekin Insurance Co. v. Designed Equipment Acquisition Corp., 2016 IL App (1st) 151689, the Illinois Appellate Court examined a common issue for insurance carriers in disputes involving construction site injuries. In particular, the Appellate Court provided helpful clarification with respect to the application of the Construction Contract Indemnification for Negligence Act (Act), also known as the anti-indemnification statute. The circumstances at issue involved a rental agreement between Abel Building & Restoration and Designed Equipment Acquisition Corporation, whereby Designed leased
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No Complaint, No Duty to Defend: An Insurer’s Duty To Defend Does Not Arise from Unfiled Draft Complaints

In Philadelphia Indemnity Insurance Co. v. Pace Suburban Bus Service, 2016 IL App (1st) 151659, the Illinois Appellate Court provided keen insights into when the duty to defend is triggered and when an action for equitable contribution can be maintained. As background, Pace Suburban Bus Services and Countryside Association for People with Disabilities entered into a leasing agreement whereby Pace would provide Countryside with a van, which would be driven by a Countryside employee, for the purposes of transporting disabled
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Seventh Circuit Recognizes Illinois Law to Allow Extrinsic Evidence in Evaluating an Insurer’s Duty to Defend

The Seventh Circuit recently handed down a decision encouraging Illinois courts to consider evidence beyond the complaint and the insurance policy when evaluating an insurer’s duty to defend. In Landmark American Insurance Co. v. Hilger, 838 F.3d 821 (7th Cir. 2016), the Seventh Circuit reviewed a district court’s judgment on the pleadings favor of a purported insured in a declaratory judgment suit filed by Landmark American Insurance Company. At issue was whether Peter Hilger was covered as an insured in
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Two Illinois Federal Decisions Highlight the Dangers of Consent Judgments for Insurers

Two related decisions handed down this year by an Illinois federal district court involve thorny issues emanating from a multi-million dollar consent judgment. In the first decision, the district court denied cross-motions for summary judgment brought by the insurer and the underlying claimant in relation to a $14 million consent judgment. Specifically, the district court held the reasonableness of the settlement could not be resolved by summary judgment. In order for a consent judgment to be reasonable, Illinois uses the
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The Irony of Not Fixing What Isn’t Broken: Wisconsin Supreme Court Refuses to Consider Extrinsic Evidence of Subcontractors’ Involvement in Replacement of Damaged Well Pump

Bootstrapping upon its decision in Marks v. Houston Casualty Co., 2016 WI 53, the Wisconsin Supreme Court in Water Well Solutions Service Group Inc. v. Consolidated Insurance Co., 2016 WI 54, affirmed summary judgment in favor of the insurer. The Supreme Court concluded, based upon a four-corners analysis, that the policy’s “your product” exclusion barred coverage entirely for the underlying lawsuit. The Supreme Court further rejected the insured’s invitation to recognize an exception to the four-corners rule to allow courts
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Impactful Wisconsin Supreme Court Decision Overturns “Unsound” Precedent

In Marks v. Houston Casualty Company, the Wisconsin Supreme Court reached a decision upholding the application of a business enterprise exclusion in a professional liability policy. Importantly, the decision clarifies Wisconsin law such that an insurer may rely upon policy exclusions in denying coverage outright. The coverage dispute arose out of six lawsuits filed against David Marks for his involvement in various enterprises across different industries. The lawsuits generally alleged Marks, as an officer or director of numerous entities (including
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Illinois Appellate Court Rejects Coverage for Junk Fax Class Action Settlement and Calls TCPA Class Action Attorneys to Task

The Illinois Appellate Court recently offered greater protection to insurance companies from liability emanating from the Telephone Consumer Protection Act of 1991 (TCPA) and fervently condemned the reality of class action settlements rewarding only class counsel. In First Mercury Insurance Co. v. Nationwide Security Services., 2016 IL App (1st) 143924 (May 18, 2016), the Appellate Court affirmed the trial court’s judgment that First Mercury had no duty to indemnify the class (as assignees) with respect to a settlement reached in
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Third-Party Complaints and the Duty to Defend – Another Decision Cementing Existing Precedent

In Pekin Insurance Company v. Illinois Cement Company, LLC, the Illinois Appellate Court again addressed the important issue of when third-party complaints can be used in evaluating an insurer’s duty to defend. Due to the circumstances surrounding the third-party complaint in question, the Appellate Court held that it was self-serving and could not be used to show that a putative additional insured was vicariously liable for the acts of the insured. The facts underlying the coverage dispute involve an action
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Up in Smoke: An Insurer Could Not Mount a Successful Coverage Defense Due to Vague Allegations in an E-Cigarette Lawsuit

An Illinois federal district court determined in Diamond State Insurance Company v. Duke that an insurer had a duty to defend its insured in a case involving alleged disparagement. This decision reminds insurers that courts have the ability to the allegations of the underlying complaint even more broadly than ever expected. The underlying lawsuit was brought by, in pertinent part, DR Distributors, LLC against 21 Century Smoking, Inc. alleging, causes of action for counterfeiting and trademark infringement under the Lanham
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Insurers May Need a Doctor’s Note: Data Breach of Medical Records Triggers Coverage, Says Fourth Circuit

On Monday, April 11, 2016, the Fourth Circuit handed down a notable, albeit unpublished, decision with regard to an issue that has vexed the insurance industry, namely, do data breaches trigger a CGL insurer’s duty to defend under Coverage B? In Travelers Indemnity Company of America v. Portal Healthcare Solutions, L.L.C., the Fourth Circuit determined, under Virginia law, the underlying class action lawsuit, indeed, triggered Travelers’ duty to defend. The underlying lawsuit was a class action complaint filed against, in
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It’s Not a Blob, It’s a Probiotic: Wisconsin Supreme Court Applies the “Integrated Systems” Rule in Coverage Dispute

In Wisconsin Pharmacal Company, LLC v. Nebraska Cultures of California, Inc., 2016 WI 14, the Wisconsin Supreme Court applied the “integrated systems” rule to a coverage dispute. In a narrow decision, it reversed the Court of Appeals decision and determined that the incorporation of a defective ingredient into a tablet did not constitute “property damage” caused by an “occurrence.” Further, the Wisconsin Supreme Court concluded that even if “property damage” was alleged, exclusions would apply to bar coverage. The coverage
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Say What You Mean and Mean What You Say, Says California Federal District Court

A California federal district court determined a standard Breach of Contract Exclusion under Coverage B of a CGL policy did not preclude the duty to defend for alleged disparagement. In MedeAnalytics, Inc. v. Federal Insurance Co., the United States District Court for the Northern District of California interpreted the exclusion very narrowly, finding it applied only to actual — and not alleged — breaches of contract and found a duty to defend. As background, the claimant alleged the policyholder made
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Don’t Believe the Hype: Over-Touting One’s Own Products Triggers Non-Conformity Exclusion

A Virginia federal court rendered an important decision on product disparagement coverage, holding that a policy’s Non-Conformity Exclusion barred coverage for the underlying false advertising claim. In Selective Way Insurance Co. v. Crawl Space Door System, Inc., the United States District Court for the Eastern District of Virginia was confronted with the question of whether there was coverage for a suit between two competing vent vendors, Crawl Space Door System, Inc. (CSD) and Smart Vent Products. Smart Vent had sued
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Not Better Late Than Never: Illinois Appellate Court Finds in Favor of Insurer on Late Notice Defense

The Illinois Appellate Court, in AMCO Insurance Co. v. Erie Insurance Co., ruled in favor of a CGL insurer based on an additional insured’s violation of the policy’s notice condition. This case represents a significant victory for insurers, which are constantly searching for the enforcement of conditions precedent to coverage. The Appellate Court held in favor of Erie Insurance Co. based on a late notice defense. As background, on March 15, 2007, Smith filed a negligence action against Hartz Construction
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Wisconsin’s Strict Exhaustion Requirement Burns Insurer

In Burgraff v. Menard, Inc., 2016 WI 11 (Wis. 2016), the Wisconsin Supreme Court affirmed a Court of Appeals decision that determined Millers First Insurance Company breached its continuing duty to defend Menard, Inc. Specifically, the issue was whether Millers First should have continued its defense of Menard even after it reached a settlement with the plaintiff, Kenneth Burgraff, for its proportionate share of the claim. This is an important decision which reiterates the strict requirements of complete exhaustion in
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Another Nail in the Junk Fax Coffin: Wisconsin Joins Illinois, California, Michigan, and Oklahoma in Finding No Coverage for TCPA Suits

The Wisconsin Court of Appeals held in a recent decision that a standard TCPA exclusion precludes coverage for all causes of action brought by the plaintiff that emanated from the unauthorized sending of faxes. This includes a common law conversion cause of action, as well as a cause of action for violations of the Telephone Consumer Protection Act (TCPA). As background, in State Farm Fire & Casualty Co. v. Easy PC Solutions, LLC, No. 2014AP2657, 2015 Wisc. App. LEXIS 855
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A Sporting Retailer’s Bid for Coverage Gets Punted by the Ninth Circuit

The Ninth Circuit recently handed down a decision holding that insurers did not have a duty to defend their policyholder, a sporting goods retailer, in several ZIP code class action lawsuits.  The class action lawsuit all arose out of alleged violations of the Song-Beverly Act, a California statute which prohibits retailers from collecting customer ZIP code information as a purported requirement of credit card transactions. The court held that policy exclusions negated coverage. In Big 5 Sporting Goods Corp. v.
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Holy Stromboli! Grocer Loses Coverage and Bad Faith Battle Against Excess Carrier

In Charter Oak Insurance Company v. Maglio Fresh Foods, No. 14-4094, 2015 U.S. App. LEXIS 19268 (3d Cir. Nov. 4, 2015), the Third Circuit held that because the underlying lawsuit did not present a covered “advertising injury” claim, and there was no exhaustion of the primary policy, the insured’s excess carrier could not have acted in bad faith. As background, the underlying plaintiff, Leonetti’s, a supplier and competitor of Maglio Fresh Foods, brought a lawsuit against Maglio. First, the “Maglio
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Another Victory for Insurers Relying on IP Exclusions

Pinnacle Brokers Insurance Solutions LLC v. Sentinel Insurance Co, Ltd., No. 15-cv-02976-JST, 2015 U.S. Dist. LEXIS 117299 (N.D. Cal. Sept. 2, 2015), arose out of a lawsuit filed by Granite Professional Insurance Brokerage, Inc. (Granite) against Pinnacle Brokers Insurance Solutions LLC and employees of Pinnacle (collectively “Pinnacle”). Granite alleged that Pinnacle conspired to steal its customers and prospective customers by carrying out a series of misleading tactics and misappropriating confidential and trade secret information. The underlying complaint sought damages and
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No Coverage for Consumer Privacy Claims Say Third Circuit and Seventh Circuit

In two recent cases, the Third Circuit and Seventh Circuit each found an absence of coverage under general liability policies resulting from consumer privacy claims, one for alleged violations of a state ZIP code statute and another for alleged violations of a state unauthorized recording statute. Since both cases involved coverage for class action lawsuits seeking statutory damages, these are big wins for insurers. First, the Third Circuit in OneBeacon America Insurance Co. v. Urban Outfitters, Inc., No 14-2976, 2015
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“It Wasn’t Me, It Was Lil Johnny!” Wisconsin District Court Holds Third-Party Publication Triggers Prior Publication Exclusion

In Design Basics LLC v. J & V Roberts Investments, Inc., No. 14-cv-1083-JPS, 2015 U.S. Dist. LEXIS 121372 (E.D. Wis. Sept. 11, 2015), the United States District Court for the Eastern District of Wisconsin determined, in pertinent part, that in a case involving allegations of copyright infringement, a commercial general liability insurer, Acuity A Mutual Insurance Company (Acuity), had no duty to defend because the prior publication exclusion barred coverage. The dispute arose when the plaintiffs, who are engaged in
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Moldy Water Keep on Rollin’: Mold Exclusion Does Not Apply to Claims Based on Mold-Infested Water

In Acuity v. Reed & Associates of Tennessee, LLC, 2015 U.S. Dist. LEXIS 109412 (W.D. Tenn. August 19, 2015), the United States District Court for the Western District of Tennessee determined that an insurer had the duty to defend its policyholder in a case involving mold, even though the subject policy included a Fungi or Bacteria Exclusion (“Mold Exclusion”).  The court found that allegations of moldy water fell within an exception to the Mold Exclusion as a “product” or “good”
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Blurred Lines Between Trademark and Trade Dress: Fifth Circuit Rules on “Web-Dress” Infringement

In Test Masters Educational Services, Inc. v. State Farm Lloyds, No. 14-20473, 2015 U.S. App. LEXIS 11148 (5th Cir. June 29, 2015), the Fifth Circuit affirmed a district court’s ruling that the amended counterclaim in the underlying lawsuit did not trigger a duty to defend on the basis of trade dress infringement. The underlying dispute arose from the ongoing legal saga between Test Masters Educational Services, Inc. (TES) and Robin Singh Educational Services, Inc. Both entities provided test preparation services
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Untimely Intervention Sinks Insurer Challenge To Allegedly Collusive $20MM Settlement

In CE Design Ltd. v. King Supply Co., LLC, No. 12-2930, 2015 U.S. App. LEXIS 11117 (7th Cir. June 29, 2015), the Seventh Circuit denied as untimely the attempted intervention of three insurers (all CNA companies) into the underlying lawsuit. The insurers were, in turn, unable to challenge the approval of a $20 million settlement between the policyholder, King Supply Co., LLC, and Plaintiff CE Design Ltd. (and its co-plaintiff). The underlying case involved a junk fax lawsuit filed by
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Illinois Appellate Court Determines Unsigned Agreement Can Still Constitute a Written Contract and Trigger Additional Insured Coverage

In West Bend Mutual Insurance Co. v. DJW-Ridgeway Building Consultants, Inc., 2015 IL App (2d) 140441 (May 19, 2015), the Illinois Appellate Court, Second District affirmed a trial court decision and held that West Bend Mutual Insurance Co. had the duty to defend DJW-Ridgeway Building Consultants, Inc. (Ridgeway) as an additional insured. The underlying dispute arose out of any injury suffered by a construction worker at a worksite where Ridgeway was the general contractor. Ridgeway subcontracted with Jason the Mason,
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Illinois Appellate Court Extends Bridgeview on Choice of Law and Finds No Duty To Defend Against Blast Fax Suit

After vacating its prior decision pursuant to an order by the Illinois Supreme Court, the Appellate Court of Illinois, Second District, in G.M. Sign, Inc. v. Pennswood Partners, Inc. 2015 IL App (2d) 121276-B, determined that the insurers, Maryland Casualty Company and Assurance Company of America (collectively “Zurich”), had no duty to defend or indemnify Pennswood Partners, Inc., with respect to a blast fax case filed by G.M. Sign, Inc. The crux of the Appellate Court’s decision was how to
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Indiana Supreme Court Finds Insured Afforded Coverage For “Professional Services”

In Wellpoint, Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 49S05-1404-PL-244 (Ind. Apr. 22, 2015) the Indiana Supreme Court reversed the trial court and granted summary judgment for Anthem, Inc.against numerous reinsurers (Excess Reinsurers), finding that Anthem was afforded coverage in the underlying litigation under the reinsurance policies. Anthem, a large managed health care organization, was self-insured for E&O liability. It purchased policies from other insurers to reinsure its E&O liabilities. The underlying litigation consisted of several
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Wisconsin Supreme Court Determines Notice-Prejudice Rule Does Not Apply To Claims-Made-and-Reported Requirement

In Anderson v. Aul, 2015 WI 19 (2015), the Wisconsin Supreme Court reversed the decision of the court of appeals and held that Wisconsin’s notice-prejudice statutes did not apply to the reporting requirements in claims-made-and-reported policies. The underlying case involved a malpractice lawsuit filed by Melissa and Kenneth Anderson against their former attorney, Thomas Aul, alleging that Mr. Aul continued to represent the Andersons in a purchase of commercial property transaction, although he had an unwaivable conflict of interest. On December
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Northern District of Illinois Draws Line Between Trademark Infringement and Trade Dress Infringement

In AU Electronics, Inc. v. Harleysville Group, Inc., No. 13 C 5947, 2015 U.S. Dist. LEXIS 2887 (N.D. Ill. Mar. 10, 2015) the U.S. District Court for the Northern District of Illinois granted summary judgment in favor of Harleysville Group, Inc. and Harleysville Lake States Insurance Co. (collectively Harleysville), finding, in pertinent part, that the underlying complaint did not allege “personal or advertising injury.” AU Electronics, Inc. was sued by Sprint and T-Mobile for allegedly buying cellphones in bulk, unlocking
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Wisconsin Federal District Court Chides Insurers for Inaction, Deems Insurers Estopped from Asserting Their Right To Defend

In Haley v. Kolbe & Kolbe Millwork Co., Inc., No. 14-cv-99-bbc, 2015 U.S. Dist. LEXIS 42584 (W.D. Wis. Apr. 1, 2015) the U.S. District Court for the Western District of Wisconsin granted summary judgment in favor of the insured, Kolbe & Kolbe Millwork Co. (Kolbe), holding that Fireman’s Fund Insurance Company and United States Fire Insurance Company (collectively the “insurers”) were estopped from having the right to select counsel to represent Kolbe in a class action lawsuit alleging the sale of
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Violation of Statutes Exclusions Bars Coverage Entirely for TCPA Claims

In Addison Automatics, Inc. v. Hartford Casualty Insurance Co., No. 13-cv-1922 (N.D. Ill. Mar. 31, 2015) the United States District Court for the Northern District of Illinois granted summary judgment in favor of the Hartford Casualty Insurance Co. and Twin City Fire Insurance Co. (collectively “Hartford”) and against Addison Automatics, Inc. (“Addison”). The district court held that Hartford had no duty to defend their insured, Domino Plastics, Inc. (“Domino”), because the Violation of Statutes Exclusions in the policies barred coverage
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11th Circuit Refuses to Enforce Knowing Violation of Rights of Another Exclusion in FACTA Lawsuit

In Travelers Property Casualty Co. of America v. Kansas City Landsmen, L.L.C., No. 14-11006, 2015 U.S. App. LEXIS 453 (11th Cir. Jan. 12, 2015), the Eleventh Circuit reversed the district court’s grant of summary judgment in favor of Travelers Property Casualty Company of America and St. Paul Fire and Marine Insurance Company (“insurers”). The Eleventh Circuit determined that the insurers may have a duty to defend The Kansas City Landsmen, LLC and A Betterway Rent-a-Car, Inc. (“Car Rental Companies”). The
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How Is a Dress Trade Dress? California Federal District Court Deems Clothing Design Infringement Suit as Alleging Trade Dress Infringement

In West Trend, Inc. v. AMCO Insurance Co., No. CV 14-06872-RGK (PLAx), 2015 U.S. Dist. LEXIS 6807 (C.D. Cal. Jan. 9, 2015), the Central District of California granted summary judgment in favor of West Trend, Inc. (“West Trend”) against AMCO Insurance Company (“AMCO”), finding that AMCO had a duty to defend West Trend against a lawsuit filed by Spirit Clothing Company (“Spirit”). The underlying lawsuit involved a long sleeve shirt marketed and sold by West Trend that contained stitching allegedly
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Texas Supreme Court Rejects Additional Insured Coverage for BP To the Tune of $750 Million

In a decision handed down by the Supreme Court of Texas on Friday, the court determined that BP was not entitled to additional insured coverage under several insurance policies issued to Transocean by a variety of insurers.  In re:  Deepwater Horizon, No. 13-0670 (Tex. Feb. 13, 2015).  The opinion also provides significant insights regarding the relationship between insurance and indemnity as risk transfer mechanisms, namely, that:  (1) a named insured can purchase a greater amount or scope of coverage for
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