(Abuse or Molestation Exclusion Applied to Bar Coverage of Claims for Sexual Assault and Negligent Hiring, Supervision and Retention by Owner of a Massage Spa)

(Farmers Insurance Exchange Agent Did Not Act on Behalf of  Farmers In Connection With Placing Fair Plan Policy for Homeowner)

In Fox Paine & Company, LLC, et al. v. Twin City Fire Ins. Co., et al. 104 Cal.App.5th 1034 (September 5, 2024), the California First District Court of Appeal affirmed the trial court’s order sustaining the demurrers of defendants St. Paul Mercury Insurance Company (“St. Paul”) and Liberty Mutual Insurance Company (“Liberty Mutual”) and dismissing without leave to amend a Third Amended Complaint (“TAC”) filed by Fox Paine & Company (“FPC”) against Liberty Mutual and St. Paul for declaratory relief, breach of contract and bad faith arising out Liberty Mutual’s and St. Paul’s refusal to pay or reimburse defense costs incurred in connection with the defense of an underlying counter-claim filed by business entities consisting of the Paine’s Family Trust, Fox Paine Management III, LLC (FPM III) and FPC (the “Paine Parties”) against FPC, Saul Fox, individually, and derivatively on behalf of FPC and two Fox related entities (the “Fox parties”).

In Lexington Insurance Company v. Smith, 2024 U.S. App. LEXIS 23429 (September 16, 2024), the U.S. Court of Appeals for the Ninth Circuit denied the insurers’ petition for rehearing on the Suquamish Tribe and Port Madison Enterprises’ (collectively, the “Tribe”) motion for summary judgment, which the Ninth Circuit had granted.

Lexington Insurance Company and several other insurance companies (collectively, “Lexington”) contracted with Tribal First (an entity set up to offer insurance for tribes) to offer insurance policies to tribal governments and enterprises. Lexington then issued insurance policies that were to be provided through Tribal First to tribes.  After suspending business operations during the onset of the COVID-19 pandemic, the Tribe submitted insurance claims for lost business and tax revenue and other expenses.  After receiving reservation of rights letters, the Tribe sued Lexington for breach of contract in the Tribe’s court. Lexington moved to dismiss, arguing the tribal court lacked tribal jurisdiction and personal jurisdiction.  The lower tribal court denied the motion and the tribal court of appeals affirmed. 

In Tait v. Commonwealth Land Title Insurance Company, 103 Cal. App. 5th 271 (June 28, 2024), the California First District Court of Appeal reversed the trial court’s order granting summary judgment in favor of Commonwealth Land Title Insurance Company (“Commonwealth”). In this case, plaintiffs Martin Tait, Jane Tait, and Bry-Mart, LLC (collectively, the “Taits”) purchased a residential property for $1.25 million and Commonwealth issued a title insurance policy for the property. The policy insured the Taits against “actual loss” arising from certain defined covered risks, including someone else having an easement on the property. The policy limited Commonwealth’s liability for an unknown easement to the lesser of the Taits’ “actual loss” or the policy limit of $1.25 million. The policy did not define “actual loss.”

In Truck Insurance Exchange v. Kaiser Gypsum Company, Inc., 144 S. Ct. 1414 (June 6, 2024), the U.S. Supreme Court reversed the judgment of the U.S. Court of Appeals for the Fourth Circuit. In this case, the issue before the Supreme Court was whether an insurer with financial responsibility for a bankruptcy claim is a “party in interest” under 11 U.S.C. § 1109(b), which allows any “party in interest” to “raise” and “be heard on any issue” in a Chapter 11 bankruptcy. 

Over the past few months, there were two California Supreme Court cases addressing coverage issues arising out of the COVID-19 pandemic. We have set forth below the main facts and holding in both of those cases

In North River Ins. Co. v. James River Ins. Co., __ F.4th __(9th Cir. August 28, 2024), the U.S. Court of Appeals for the Ninth Circuit certified the following question to the Nevada Supreme Court:

Under Nevada law, can an excess insurer state a claim for equitable subrogation against a primary insurer where the underlying lawsuit settled within the combined policy limits of the insurers?