Week Ahead in Insurance: July 6, 2021

Week Ahead in Insurance: July 6, 2021

(Reuters) – Here are some events of interest to the insurance law community this week. All times are local unless otherwise noted.

Tuesday, July 6

9 a.m. – The 9th U.S. Circuit Court of Appeals will hear cross-appeals by former NFL cornerback Charles Dimry III and the Bert Bell/Pete Rozelle NFL Player Retirement Plan to an order that sent Dimry’s claim for Total and Permanent (T&P) disability benefits back for a third round before the Plan’s administrative board. Dimry, whose 12-year career as a player ended with the San Diego Chargers in 1999, applied for T&P benefits after undergoing cervical fusion procedures in 2014. The board found he was not disabled, but a federal judge in San Francisco ruled that the board abused its discretion by giving undue weight to the opinions of plan-selected physicians. In 2019, without seeking further input from Dimry, the board again denied the claim. Last September, U.S. Magistrate Judge Jacqueline Scott Corley found the board abused its discretion in several ways but ordered another remand, adding that when the board gives Dimry’s claim “full and fair” consideration, she “expects” it will find him disabled. On appeal, the Plan says Corley should have affirmed the board’s findings, while Dimry says Corley should have simply awarded him benefits. The case is Dimry v. The Bert Bell/Pete Rozelle NFL Player Retirement Plan, 9th U.S. Circuit Court of Appeals No. 20-17049. For Dimry: Terrence Coleman of Pillsbury & Coleman. For the Plan: Michael Junk of Groom Law Group.

Wednesday, July 7

9 a.m. – Yacht pilot Trevor Griffiths, who obtained a verdict of common-law fraud, breach of contract and breach of fiduciary duty against a former client and her startup company, will argue to the 5th U.S. Circuit Court of Appeals that Arch Insurance and National Union Fire Insurance violated Texas law and breached their contractual duties to defend their insureds against his claims. Griffiths had invested $150,000 in Tatiana Golovina’s startup, Environmental Packaging Technologies Ltd (EPT) in 2005, but never received the ownership interest he was promised. He obtained title to the company in a post-verdict settlement of his state-court action, then sued the insurers in federal court in Houston in 2018. The district court last year ruled for the insurers based on exclusions for fraud and ill-gotten profits in their D&O policies. On appeal, EPT argues that the exclusions apply only to “deliberate fraud,” and that common-law fraud in Texas incorporates reckless misrepresentations, creating a potential for coverage that triggered the insurers’ duty to defend.

The case is Environmental Packaging Tech. Ltd. et al. v. Arch Insurance Co. et al., 20-20431. For EPT Ltd. and Griffiths: Marcy Hogan Greer of Alexander Dubose & Jefferson. For Arch: Christopher Dove of Locke Lord. For National Union: Debra Donaldson of Hudgins Law Firm.

12 p.m. (CT) – DRI-The Voice of the Defense Bar presents “Materials That Set Themselves on Fire – Investigating Spontaneous Combustion,” which it describes as “an often overlooked and poorly understood pathway to ignition for an accidental fire.” Engineers from the science consulting firm Exponent will look at materials that can generate enough heat internally to self-ignite – including residential laundry, hazardous waste, and industrial chemicals – and identify questions to ask when investigating in fire, explosion and reactive-chemical incidents. For more information click here: https://bit.ly/3hoIkvG

4 p.m. – Today is the deadline for Society Insurance Co., the Insurance Services Office, and plaintiffs who have subpoenaed 50 years’ worth of records on ISO’s development of standard-form virus and environmental exclusions to brief U.S. Magistrate Judge Michael Hammer in New Jersey on whether he should decide Society’s motion to quash the subpoena or transfer it to U.S. District Judge Edmond Chang in Chicago, who is presiding over the Society Insurance COVID-19 Business Interruption MDL. Society and ISO say the subpoena is overbroad and irrelevant because Society’s policies contain no virus exclusions. The plaintiffs say the material is relevant to the show that policies without the exclusions cover virus-related losses.

The MDL is In re Society Insurance Co. COVID-19 Business Interruption Protection Insurance Litigation (No. 2964), U.S. District Court for the Northern District of Illinois, No. 20-5965. Society’s motion to quash is U.S. District Court for the District of New Jersey No. 20-5965. For Society: April Ross and Allyson McKinstry of Crowell & Moring. For the plaintiffs: Arthur Turner Jr. of Edelson (Liaison Counsel); Adam Levitt of DiCello Levitt Gutzler; W. Mark Lanier of The Lanier Law Firm; Timothy Burns of Burns Bowen Bair; Shelby Guilbert Jr. of King & Spalding; Shannon McNulty of Clifford Law Offices. For ISO: James Irving McClammy of Davis Polk & Wardwell.

Thursday, July 8

9 a.m. – The 5th U.S. Circuit Court of Appeals will hear sausage-subsidiary HM International’s appeal from a ruling that its D&O insurer, Twin City Fire Insurance Co., had no duty to indemnify it for settling with the victim of a wired-funds scam six months after the two-year statute of limitations had run on the victim’s potential claim. HMI provides management and accounting services to companies affiliated with its founders’ family. In January 2015, HMI’s chief administrative officer received what appeared to be an email from a longtime client, Gregory Geib, and wired $1 million out of his wife’s bank account as instructed. The Geibs sent a demand letter later that April. HMI forwarded it to Twin City, which denied coverage based on several policy exclusions. The Geibs never did sue HMI; instead, the Geibs and HMI jointly sued Twin City in federal court in Houston in January 2017. That July, HMI reached a $470,000 settlement with the Geibs. The district court said the D&O policy did not cover the settlement because HMI was not legally obligated to pay a time-barred claim.

The case is HM International LLC v. Twin City Fire Ins. Co., 5th U.S. Circuit Court of Appeals, No. 20-20122. For HMI: Aaron Davidson of Cole Schotz. For Twin City: Steven Knight of Chamberlain, Hrdlicka, White, Williams & Aughtry.

Know of an event that could be included in Week Ahead in Insurance? Contact Alexia Garamfalvi at alexia.garamfalvi@thomsonreuters.com

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