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 properly analyze a …

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Illinois Appellate Court Finds No Duty to Defend Copyright Infringement Suit

In Erie Insurance Exchange v. Compeve Corp., 2015 IL App (1st) 142508, the Illinois Appellate Court held that Erie Insurance Exchange had no duty to defend Compeve Corporation and Slava Packovskis in a copyright infringement lawsuit filed by Microsoft Corporation. Microsoft specifically alleged copyright infringement as a result of the defendants selling computers with unauthorized copies of Windows XP installed.

Erie filed a declaratory judgment action. The Erie Policy contained standard CGL Coverage B language. The coverage dispute centered on the Infringement Offense, and …

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Texas Federal District Court Holds Both Professional Liability Insurers on the Hook for Insured’s Defense

In Corinth Investors Holdings, LLC v. Evanston Insurance Co., 2015 U.S. Dist. LEXIS 36273 (E.D. Tex. Mar. 24, 2015), the U.S. District Court for the Eastern District of Texas held that two professional liability insurers were both on the hook to defend an insured in an action where notice of the claim could have been received under separate, concurrent insurance policies issued by the two entities.

Corinth Investors Holdings, LLC, d/b/a Atrium Medical Center was the named insured under a “Health Care Organizations and Providers …

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Timing is Key in Determining Primary/Excess Obligations for Claims against Multiple Insureds

A recent Eleventh Circuit decision warns of the dangers in handling claims against multiple insureds. In Nova Casualty Co. v. OneBeacon America Insurance Co., (U.S. Ct. Apps., 11th Cir., Mar. 17, 2015) the district court for the Southern District of Florida granted summary judgment in favor of the primary insurer, finding that although it had breached its duty to defend and indemnify an additional insured in the underlying action, the excess insurer was not entitled to damages because the primary insurer had …

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No Duty To Defend Malicious Defamation Claims: Eighth Circuit Finds No Coverage Based on Underlying Complaint’s Assertion of Defamation with Intent To Injure

In Sletten & Brettin Orthodontics, LLC v. Continental Casualty Co., No. 13-2918 (8th Cir., Mar. 19, 2015), the United States Court of Appeals for the Eighth Circuit considered and rejected the insured’s argument that its commercial general liability policy’s coverage provisions pertaining to defamation claims were ambiguous and/or illusory. As background, the underlying complaint alleged that one of the underlying defendants posted defamatory messages about a competing orthodontic practice on a Yahoo! Review site while pretending to be the claimants’ aggrieved patients. The underlying …

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Insurers Have No Duty To Defend Chiropractor Against Failure To Warn of Sexual Assault Claim

In Hanover American Insurance Co. v. Balfour, 2015 U.S. Dist. LEXIS 874 (10th Cir. Jan. 21, 2015), the U.S. Court of Appeals for the Tenth Circuit affirmed an Oklahoma federal district court’s rulings in favor of two insurers arising out of a claim against a chiropractor for negligent failure to warn her patient of the insured’s husband propensity to commit a sexual assault.  The Tenth Circuit first found that under the subject chiropractor’s malpractice policy, the underlying complaint failed to allege “professional services.”  The Tenth …

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Insurers Reach the Summit: N.Y. Court of Appeals Reverses K2, Says Exclusions Not Lost in Breach of Duty to Defend

After granting reargument, the New York State Court of Appeals reversed its previous decision finding that the rule of stare decisis must govern and that the court erred by failing to take account of controlling precedent in Servidone Const. Corp. v. Sec. Ins. Co. of Hartford. In that previous decision, K2-I, the court arguably rewrote New York law by adopting a minority position that recognized the doctrine of coverage by estoppel ruling that where an insurer breaches its duty to defend, it has …

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