LexisNexis® Legal Newsroom
    Mealey's Insurance - Insurer Had No Duty To Defend Additional Insured In Defect Suit, Judge Says

    DENVER - A commercial general liability insurer had no duty to defend an additional insured in an underlying construction defects lawsuit, a Colorado federal judge ruled Sept. 29; however, the judge held that genuine issues of material fact preclude a finding that the insurer had a duty to defend its insured (Zurich American Insurance Co. v. American Guarantee and Liability Insurance Co. v. Acadia Insurance Co., No. 14-01273, D. Colo.; 2015 U.S. Dist. LEXIS 132836).

    Mealey's Insurance - Utah Federal Judge Says Insurer's Denial Of Water Damage Claim Was Reasonable

    SALT LAKE CITY - Because water and resulting mold damage occurred over an extensive period of time and were not caused by a sudden and accidental escape of water, an insurer did not breach its contract or act in bad faith in denying a homeowner's claim, a Utah federal judge said Sept. 29 (Thomas Wheeler v. Allstate Insurance Co., et al., No. 12-193, D. Utah; 2015 U.S. Dist. LEXIS 131736).

    Mealey's Insurance - Judge Finds Reinsured's $2 Million Reinsurance Billing Dispute Claim Timely

    CONCORD, N.H. - A federal judge in New Hampshire on Sept. 29 denied a reinsurer's motion for judgment on the pleadings, finding that England's six-year statute of limitations applies and that the reinsured's breach of contract claim is therefore timely (TIG Insurance Company v. EIFlow Insurance Limited, No. 14-cv-00459, D. N.H.).

    Mealey's Insurance - Insurer Has Duty To Defend Claims Arising From Insured's Demolition Work, Judge Says

    BROOKLYN, N.Y. - An insurer has a duty to defend an insured in underlying actions alleging property damage from the insured's demolition and excavation work, a New York federal judge ruled Sept. 29; however, the judge found that the duty-to-indemnify issue is premature (Scottsdale Insurance Co. v. United Industries & Construction Corp., No. 12-5732, E.D. N.Y.; 2015 U.S. Dist. LEXIS 133392).

    Mealey's Insurance - Magistrate: All Claims Deemed 1 Claim Made Before Policy Inception; No Coverage

    MIAMI - Quoting an African proverb in a professional liability coverage dispute, a federal magistrate held Sept. 30 that pursuant to the policy's broad definition of "related claims," prepolicy personal injury protection (PIP) demands are related to within-policy claims for which an insured seeks coverage and, therefore, all of the claims are deemed one claim made before the policy's inception (Direct General Insurance Co. v. Houston Casualty Co., et al., No. 14-2005014-20050, S.D. Fla.).

    Mealey's Insurance - Subsidence Damage Is Not An 'Occurrence' Under Insurance Policy, Judge Says

    CHICAGO - Subsidence damage to a home caused by subcontractors' work is not an "occurrence," an Illinois federal judge ruled Sept. 30, finding that an insurer had no duty to defend or indemnify its insured contractor in a breach of warranty lawsuit (Cincinnati Insurance Co. v. Northridge Builders, Inc., et al., No. 12-9102, N.D. Ill.; 2015 U.S. Dist. LEXIS 132165).

    Mealey's Insurance - Judge: Plaintiff Failed To Show That GEICO Acted In Bad Faith In Handling Claim

    MIAMI - A federal judge in Florida on Sept. 30 granted an insurer's motion for summary judgment in an insurance bad faith lawsuit, ruling that the plaintiff failed to show that a "rational trier of fact could find" that the insurer acted in bad faith in the handling of a claim for third-party benefits (Norma I. Feijoo, f/k/a/ Norma Borroto, v. GEICO General Insurance Co., No.14-24659, S.D. Fla.; 2015 U.S. Dist. LEXIS 132667).

    Mealey's Insurance - ERISA Preempts State Law Claims, Federal Judge Determines

    MONTGOMERY, Ala. - An Alabama federal judge on Sept. 29 granted a disability insurer's motion to dismiss a claimant's complaint because the only claims alleged against the insurer are state law claims, which are preempted by the Employee Retirement Income Security Act of 1974 (Charles M. Davis v. The Prudential Insurance Company of America, No. 14-43, M.D. Ala.; 2015 U.S. Dist. LEXIS 130732).

    Mealey's Insurance - Deputy Receiver Asks For OK Of $33 Million Settlement With U.S. Government

    AUSTIN, Texas - A special deputy receiver on Sept. 28 asked a Texas court to approve a settlement agreement under which an insurer's rehabilitation estate will pay the U.S. government $33 million regarding certain customs bonds (State of Texas v. Highlands Insurance Company, No. D-1-GV-03-004537, Texas, 53rd Dist., Travis Co.).

    Mealey's Insurance - Florida Panel Reverses Ruling In Insurer's Favor In Sinkhole Coverage Dispute

    LAKELAND, Fla. - A Florida appeals panel held Sept. 30 that there is a material issue of fact regarding the proper method of subsurface repair in a sinkhole coverage dispute, reversing and remanding a lower court's order granting summary judgment in favor of the insurer (Lizardo Estrada, et al. v. Tower Hill Select Insurance Co., et al., No. 2D13-3671 c/w No. 2D14-1101, Fla. App., 2nd Dist.; 2015 Fla. App. LEXIS 14444).

    Mealey's Insurance - Insured Failed To Plead Insurance Fraud Claim In Bad Faith Suit, Judge Rules

    CAMDEN, N.J. - Although an insured has added necessary additional factual allegations in his insurance bad faith complaint to support most of his claims against his homeowners insurance provider, he has failed to state a plausible claim for violation of a state law consumer fraud protection law, a federal judge in New Jersey ruled Sept. 29 (Steven Breitman v. National Surety Corp., No. 14-7843, D. N.J.; 2015 U.S. Dist. LEXIS 130744).

    Mealey's Insurance - Judge Finds No Insurance Coverage For Retailer In 2 Spyware Lawsuits

    BILLINGS, Mont. - A retailer's insurers were not obligated to provide a defense in two underlying lawsuits related to the retailer's installation of spyware on computers it sold to customers, a Montana federal judge found in a pair of Sept. 25 rulings granting the insurers' summary judgment motions, finding that policy exclusions for the recording or distribution of private material precluded coverage (American Economy Insurance Co., et al. v. Aspen Way Enterprises Inc., et al., No. 1:14-cv-00009, D. Mont.; 2015 U.S. Dist. LEXIS 129274).

    Mealey's Insurance - Justice Asks For Input Regarding Proposed End Of HMO's Liquidation

    NEW YORK - A New York justice on Sept. 25 issued an order to show cause, asking for input into a liquidator's request to close an insurer's liquidation and distribute its more than $3 million in assets (In the Matter of Essence Healthcare of New York, Inc., No. 452879/2014, N.Y. Sup., New York Co.).

    Mealey's Insurance - Judge Refuses To Dismiss Additional Insured's Breach Of Contract, Duty Counterclaim

    SACRAMENTO, Calif. - An additional insured sufficiently asserted counterclaims for breach of contract and breach of the covenant of good faith and fair dealing against an insurer regarding the appointment of defense counsel in construction defect cases, a California federal judge ruled Sept. 28 (Travelers Indemnity Company of Connecticut and Travelers Property Casualty Company of America v. KB Home North Bay, Inc. and KB Home Sacramento, Inc., No. 15-352 & Travelers Property Casualty Company of America and Fidelity & Guaranty Insurance Co. v. KB Home North Bay, Inc., No. 15-481, E.D. Calif.; 2015 U.S. Dist. LEXIS 130580).

    Mealey's Insurance - Judge Finds Fact Issues On Whether Insurer Can Be Sued Under Direct Action Statute

    SHREVEPORT, La. - Questions of material fact exist as to whether an insurer may be sued under the direct action statute without its insured being named in the lawsuit, which seeks costs for the insured's defective work on a highway, a Louisiana federal judge ruled Sept. 28 (JB James Construction LLC v. River Cities Sawing LLC, et al., No. 13-2490, W.D. La.; 2015 U.S. Dist. LEXIS 131074).

    Mealey's Insurance - Judge Declines To Dismiss Breach Of Contract, Bad Faith Claims Against Insurer

    NEW HAVEN, Conn. - Insureds sufficiently assert claims for breach of contract and breach of the implied covenant of good faith and fair dealing against their homeowners insurer for its denial of coverage for damages sustained by cracking in their basement wall, a Connecticut federal judge held Sept. 28 (Raymond G. Gabriel and Kimberly A. Gabriel v. Liberty Mutual Fire Insurance Co., No. 14-01435, D. Conn.; 2015 U.S. Dist. LEXIS 129952).

    Mealey's Insurance - Parties Who Are Potentially Obligated To Pay Must Be Identified, Federal Judge Says

    ALBANY, N.Y. - A ruling on allocation and an insured's duty to indemnify two of its insurers cannot be made until all of the parties who are potentially obligated to pay for underlying asbestos claims are identified, a New York federal judge said Sept. 29 in denying both the insured's and insurers' motions for summary judgment (Pacific Employers Insurance Co. v. Troy Belting & Supply Co., et al., No. 11-912, N.D. N.Y.; 2015 U.S. Dist. LEXIS 130681).

    Mealey's Insurance - Residential Construction Exclusions Bars Insurance Coverage, Judge Finds

    BOSTON - A commercial general liability insurance policy's residential construction work exclusion precludes coverage to an additional insured for underlying lawsuits alleging property damage sustained from negligent supervision that resulted in flooding, a Massachusetts federal judge ruled Sept. 28 (CWC Builders, Inc. v. United Specialty Insurance Co., No. 13-11576, D. Mass.; 2015 U.S. Dist. LEXIS 130335).

    Mealey's Insurance - Lost Earnings Were Not 'Owned' By Insured; No Coverage Owed, Federal Judge Rules

    MINNEAPOLIS - A Minnesota federal judge held Sept. 28 that because any lost earnings stemming from a Ponzi scheme perpetuated by an insured's investment advisers were not "owned" by the insured pursuant to a blanket crime policy, the insurer has no duty to indemnify its insured (3M Company, et al. v. National Union Fire Insurance Company of Pittsburgh, Pa, et al., No. 14-CV-1058 (PJS/JSM), D. Minn.; 2015 U.S. Dist. LEXIS 131197).

    Mealey's Insurance - Judge Says Economic Loss Doctrine Bars Insurer's Breach Of Warranty Suit

    GRAND RAPIDS, Mich. - An insurer's and its insureds' breach of implied warranty lawsuit based on alleged manufacturing defects in trusses for a hog building is subject to a four-year statute of limitations and the economic loss doctrine, a Michigan federal judge ruled Sept. 25 (Farm Bureau Mutual Insurance Company of Michigan, et al. v. Borkholder Buildings & Supply, LLC, No. 14-1118, W.D. Mich.; 2015 U.S. Dist. LEXIS 128830).

    Mealey's Insurance - Parties: We Agree In Principle To Settlement Of Reinsurance Case

    NEW HAVEN, Conn. - An insurer and its reinsurer asked a federal court in Connecticut on Sept. 25 to cancel a settlement conference because the parties say they have reached a settlement in principle of their reinsurance dispute (Travelers Casualty & Surety Company v. R&Q Reinsurance Company, No. 14-cv-01651, D. Conn.).

    Mealey's Insurance - Judge: Insurer Didn't Act In Bad Faith In Denying Coverage For Fraudulent Claim

    RIVERSIDE, Calif. - Dismissal of an insurance breach of contract and bad faith lawsuit is proper because the insureds violated the fraud and misrepresentation provisions of their automobile insurance policy, a federal judge in California ruled Sept. 24 (Ali Almazni, et al. v. United Financial Casualty Co., et al., No. 14-0975, C.D. Calif.; 2015 U.S. Dist. LEXIS 129562).

    Mealey's Insurance - 6th Circuit Panel Remands Suit; Says Claimant's Appeal Was Not Properly Considered

    CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Sept. 24 determined that a district court erred in granting a disability insurer's motion for summary judgment because it is not clear if the insurer properly denied a long-term disability (LTD) claim (Vicki Koning v. United of Omaha Life Insurance Co., No. No. 14-2188, 6th Cir.; 2015 U.S. App. LEXIS 17022).

    Mealey's Insurance - Judge Dismisses Claims Against Insurance Adjuster In Bad Faith Lawsuit

    FORT WORTH, Texas - Dismissal of claims against an insurance adjuster in an insurance breach of contract and bad faith lawsuit is proper because an insured failed to state a claim for relief, a federal judge in Texas ruled Sept. 28 (Yolanda Aguilar v. State Farm Lloyds, et al., No. 15-565, N.D. Texas; 2-015 U.S. Dist. LEXIS 130384).

    Mealey's Insurance - 6th Circuit Finds Bank Is Entitled To Insurance Proceeds

    CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Sept. 25 affirmed a district court's ruling that found that a property owner waived her right to insurance proceeds in relation to a fire and that the bank that held her mortgage was entitled to the funds (Rafah Dawood v. JPMorgan Chase Bank, N.A., et al., No. 15-1242, 6th Cir.; 2015 U.S. App. LEXIS 17037).