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A trial court in New York has granted summary judgment for a group of D&O insurers seeking a declaration that policies issued to AR Capital, LLC (“AR Capital”) do not provide coverage for settlements and consent judgments in actions alleging false and misleading SEC filings by VEREIT, Inc. (“VEREIT”), which is a real estate investment trust sponsored and managed by AR Capital. See XL Specialty Ins. Co. v. AR Capital, LLC, Case No. 650018/2019, 2021 N.Y. Misc. LEXIS 444 (N.Y. Supr. Ct., Feb. 2, 2021). The court’s ruling enforces the insured capacity limitation within the D&O policies’ definition of Wrongful Act, the exception of SEC disgorgement amounts from covered Loss, and an insured capacity exclusion.

Continue Reading New York Trial Court Enforces D&O Policy’s Insured Capacity Limitations and Exception of SEC Disgorgement Amounts from Covered Loss

A split appellate court in Pennsylvania has held that an insurer is estopped from asserting a policy exclusion that it failed to expressly raise in its reservation of rights letter. See Selective Way Ins. Co. v. MAK Servs., No. 1289 EDA 2019, 2020 Pa. Super. LEXIS 342 (Pa. Super. Ct. April 24, 2020). The court’s ruling is an important reminder that failure to properly reserve the insurer’s right to deny coverage can sometimes have significant consequences.

Continue Reading Pennsylvania Court Estops Insurer From Asserting Coverage Defense That Was Not Identified in Its Reservation of Rights Letter

The California Supreme Court has agreed to decide for the first time whether class actions alleging violations of the Telephone Consumer Protection Act (“TCPA”)—which prohibits certain unsolicited fax, telephone or text message advertisements—are covered by a CGL insurance policy. See Yahoo! Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., Case No. S253593 (Cal. S. Ct., March 27, 2019). The Ninth Circuit asked the California Supreme Court to resolve the issue as a certified question of unresolved state law. See Yahoo! Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 913 F.3d 923, 926 (9th Cir. 2019).

Continue Reading Do TCPA Claims Trigger CGL Coverage? The California Supreme Court Agrees to Decide