Insurance Law - Week Of September 16, 2022

• Published date: 28 September 2022
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation
• Law Firm: Morrison Mahoney LLP
• Author: Mr Michael Aylward

PANDEMIC UPDATE

Another early policyholder victory was overturned this week as the Oklahoma Supreme Court joined the growing body of state supreme courts barring coverage for COVID BI claims. A divided court ruled in Cherokee Nation v. Lexington Ins. Co., No. 119359 (Okla. Sept. 13, 2022) that the District Court erred in finding business interruption coverage when Cherokee Nation 'did not sustain immediate, tangible deprivation or destruction of property.' Three dissenting judges argued that the language in question was ambiguous and that the majority was giving 'all perils' coverage the 'armor' of an old named perils form.

The Maryland Court of Appeals heard oral argument last Friday on a certified question from a local federal district court in Tapestry, Inc. v. Factory Mutual Insurance Company.

In keeping with its ruling earlier this year in Estes v. Cincinnati Ins. Co., 23 F.4th 695, 699 (6th Cir. 2022), the Sixth Circuit ruled last week in Wild Eggs Holdings v. State Auto & Property Ins. Co., No. 21-5962 (6th Cir. Sept. 9, 2022) that COVID does not cause direct physical loss under Kentucky law. Further, the court refused to find any Civil Authority coverage due to the fact that any suspension of operations 'due' to civil authority did not result from an alleged 'exposure' to a disease. Writing in dissent, Judge Moore argued that the insured had a reasonable expectation of coverage due to conflicting meanings of 'exposure.'

NEW CASES OF CONSEQUENCE

CALIFORNIA Other Insurance Clauses

In a dispute among several liability insurers arising out of claims against a property manager for failing to prevent the murder of a community resident by her roommate, the Court of Appeal has ruled in Western World Ins. Co. v. Federal Ins. Co., B311994 (Cal. App. Sept. 8, 2022)(unpublished) that the 'other insurance' language in Western World's excess policy trumped that contained in Federal's policy because Federal's clause only made its coverage excess of the underlying primary policy, whereas Western World's policy was excess to all other available insurance, whether primary or excess. As a result, the Second District ruled that Western World was entitled to be reimbursed for sums that it had contributed to settle the tort claims.

FLORIDA First Party/Post-Loss Misrepresentations/Procedure

The Florida District Court of Appeal has ruled that newly-enacted Florida Rule of Civil Procedure 1.510, which states that summary judgment is appropriate when 'the evidence is such...