Prior Knowledge Exclusion Unambiguous and Effective to Bar Coverage

By Courtney E. Scott, Esq. of Tressler LLP

Maxum Indemnity Company (Maxum) won summary judgment in a dispute with insured brokerage Mulberry Insurance Services (Mulberry), as the policy's prior knowledge exclusion was unambiguous and precluded coverage for underlying claims against Mulberry for alleged fraudulent sales of insurance policies. Maxum Indem. Co. v. Drive West Ins. Servs., 2015 U.S. Dist. LEXIS 12468 (S.D. Ohio Feb. 3, 2015).

Insurance Adjuster Employed by Carrier Can Be Held Liable for Negligent Misrepresentation Regarding Coverage

By Donald A. O'Brien, Esq. of Hinshaw & Culbertson LLP

Bock v. Hansen, Court of Appeal, First District, Division 2, California A136567 (April 2, 2014)

Plaintiff homeowners purchased a homeowner's policy in 2001 that provided additional coverage for debris removal. In 2010, a 41-foot long tree limb weighing 7,300 pounds broke off from a tree in their front yard and crashed into the chimney, the front of the house and through the living room window. Three other large limbs also fell, which came to rest on the chimney and broke three windows and damaged the interior of the home, the fence and one of their automobiles. The chimney was the primary heating source for the home.

No Duty To Defend Malicious Defamation Claims: Eighth Circuit Finds No Coverage Based on Underlying Complaint's Assertion of Defamation with Intent To Injure

By Alex J. Yastrow, Esq. and Joanna M. Roberto, Esq. of Goldberg Segalla  

In Sletten & Brettin Orthodontics, LLC v. Continental Casualty Co., No. 13-2918 (8th Cir., Mar. 19, 2015), the United States Court of Appeals for the Eighth Circuit considered and rejected the insured's argument that its commercial general liability policy's coverage provisions pertaining to defamation claims were ambiguous and/or illusory. As background, the underlying complaint alleged that one of the underlying defendants posted defamatory messages about a competing orthodontic practice on a Yahoo! Review site while pretending to be the claimants' aggrieved patients. The underlying complaint alleged defamation and libel, civil conspiracy, and unfair competition. It was specifically pleaded that the underlying defendant acted with intent to injure the claimant. Accordingly, the Eight Circuit found that Continental Casualty had no duty to defend.

By Christopher E. Hoyme. Esq. of Jackson Lewis P.C.

Many mobile app developers do not place a high priority on data security, as illustrated by a recent IBM/Ponemon study:

• Fifty percent of mobile app developers have no budget for security.
• Forty percent of companies don't scan mobile app codes for vulnerabilities.
• The average company tests less than half of the apps it builds for security issues.
• Thirty-three percent of companies never test any apps for security.

Such vulnerabilities have contributed to over one billion personal data records being compromised last year alone.  In addition, studies show that 11.6 million mobile devices being affected by malware at any given time.

U.S. Supreme Court Rules in Favor of Employer Shifting Health Costs to Retired Employees

By Marc J. Zimet, Esq. of Jampol Zimet, LLP

On January 26th, 2015 the U.S. Supreme Court ruled in favor of an employer which amended its collective bargaining agreement. The ruling in this case is important to employers with similar agreements, as the ruling alters case law and sets forth new precedent that will affect past and future agreements that provide retirees with benefits.

Good News for Companies: Pennsylvania District Court Rules That Plaintiffs Lack Standing without Actual or Imminent Misuse of Data

By Melissa K. Ventrone, Esq. and Kathleen D. Wilkinson, Esq. of Wilson Elser

"There are only two types of companies left in the United States ... those that have been hacked and those that don't know they've been hacked." That is how U.S. District Judge John E. Jones III of the Middle District of Pennsylvania began his opinion in Storm v. Paytime, Inc. and Holt v. Paytime Harrisburg, Inc. The Court granted a motion to dismiss two consolidated class actions with a total of 233,000 proposed class members whose private information had been compromised after a payroll company had its systems hacked. Sympathetic to those who have been victims of a data breach, Judge Jones noted that, "it is not unreasonable for the victims to feel that a wrong has clearly been committed," but questioned whether it was reasonable for a business to pay damages to thousands of customers when there has been no misuse of the information.