HNRK Coverage Corner

On September 16, 2020, Judge Failla of the SDNY issued a decision in Philadelphia Indemnity Ins. Co. v. Streb, Inc., Case No. 19-CV-366 (KFP), ruling that a CGL carrier had no duty to defend a personal injury action because undisputed “extrinsic evidence” (i.e., facts not alleged in the complaint) conclusively established that an exclusion applied.

The insured (Streb, Inc.), a not-for-profit dance and performance company, was a defendant in a personal injury action brought by a participant in an aerobics class who was severely injured on a trampoline.  Streb’s CGL policy ...

On March 26, 2020, the New York Court of Appeals granted leave to appeal from the First Department's decision in J.P. Morgan Sec., Inc v. Vigilant Ins. Co.,126 A.D.3d 76 (1st Dep't 2018), which held that that a disgorgement payment made as part of the settlement of an SEC enforcement action was a “penalty” and therefore did not qualify as a covered “loss” under a CGL policy. This case has a long history. See our post about the First Department's decision here.

On February 7, 2020, the Second Circuit issued a decision in Lepore v. Hartford Fire Ins. Co., Case No. 19‐778‐cv, holding that a CGL policy exclusion for any suit alleging “an infringement or violation of any intellectual property right” was triggered even though the underlying complaint did not contain a direct IP-infringement claim. The Second Circuit affirmed the trial court’s decision granting summary judgment to the insurer, explaining:

Plaintiffs argue that because no violation of IP rights was asserted in the NL suit, the IP exclusion must be read narrowly, and ...

On December 17, 2019, the First Department issued a decision in McGraw-Hill Education, Inc. v. Illinois National Insurance Company, 2019 NY Slip Op 08960, ordering an insurer to provide defense coverage in a copyright infringement action, absent a “judicial determination” that the infringements were intentional. This coverage action arose from over two dozen copyright infringement lawsuits filed across the country against textbook publisher McGraw-Hill Education, Inc. by commercial photographers and stock photography agencies, alleging unauthorized publication ...

On November 20, 2019, Judge Briccetti of the SDNY issued a decision in Metropolitan Prop. & Cas. Ins. Co. v. Comley, Case No. 18-cv-9259 (VB), holding that a liability insurer properly denied defense coverage, under an exclusion for “intentional and criminal acts”, for a lawsuit alleging “negligent supervision” of the insureds’ minor son, who committed a sexual assault. The policy at issue—a homeowners’ policy—covered both the parents and their “relatives”, who are “resident[s] of the same household.” The policy’s “intentional and criminal ...