LexisNexis® Legal Newsroom
    Texas Appeals Panel Upholds Judgment To Insurance Agents On Negligence Claims

    CORPUS CHRISTI, Texas - A Texas appeals panel on July 25 affirmed judgment with regard to claims for negligence and violations of the Deceptive Trade Practices Act (DTPA) against a surplus lines retail agent and a surplus lines managing general agent and rendered that an insured take nothing on its claims (Brannan Paving GP LLC d/b/a Brannan Paving Co. v. Pavement Markings Inc., et al., Nos. 13-11-00005-CV & 13-11-00013-CV, Texas App., 13th Dist.; 2013 Tex. App. LEXIS 9211).

    Bankruptcy Judge Nixes Garlock Appeal Of Pittsburgh Corning's Plan Confirmation

    PITTSBURGH - An appeal of confirmation of Pittsburgh Corning Corp.'s Chapter 11 plan of reorganization by fellow asbestos bankruptcy debtor Garlock Sealing Technologies LLC was rejected July 23 by a Pennsylvania federal bankruptcy judge, who found the appeal to be a "nullity" pending a motion by two insurers to reconsider the plan confirmation (In re: Pittsburgh Corning Corporation, No. 00-22876, W.D. Pa. Bkcy.).

    Judge Says Negligence Claim Against Insurance Agent Is Barred By Limitations Statute

    NEW ORLEANS - An insured's negligence claim against an insurance agent regarding failure to procure property insurance is barred by the one-year statute of limitations, a Louisiana federal judge held July 24 (Tyrone Walton v. E S & H Inc., No. 11-1819, E.D. La.; 2013 U.S. Dist. LEXIS 103450).

    Judge Compels Insureds To Arbitrate Coverage Of Construction Defect Case

    SAN FRANCISCO - A California federal judge on July 23 compelled insureds to arbitration with their insurers regarding coverage for a construction defect lawsuit and dismissed claims that the insurers breached their duty to settle (Swinerton Builders and Swinerton Inc. v. American Home Assurance Co., et al., No. 12-4350, N.D. Calif.; 2013 U.S. Dist. LEXIS 103005).

    Judge: Directors, Officers Insurer Has Duty To Defend, Indemnify Sexual Abuse Suit

    BROOKLYN, N.Y. - Judgment was entered against a directors and officers liability insurer on July 23 after a New York federal judge found that the insurer has a duty to defend and indemnify its community center insured against an underlying lawsuit alleging that the insured condoned and ratified the acts of sexual abuse committed by its assistant executive director of health/physical education (Jewish Community Center of Staten Island v. Trumbull Insurance Co., No. 09-CV-02028 $(ENV$) $(JMA$), E.D. N.Y.; 2013 U.S. Dist. LEXIS 102063).

    Judge: Internet Cafe Materially Misrepresented True Nature Of Its Business

    MACON, Ga. - Insurers would not have issued commercial general liability and workers' compensation insurance policies under their underwriting guidelines if they had known that an Internet cafe insured participated in sweepstakes games, a Georgia federal judge ruled July 23, granting the insurers' motion for summary judgment in their rescission lawsuit (Sentinel Insurance Company Ltd., et al. v. Action Stop LLC, et al., No. 5:11-CV-488 $(CAR$), M.D. Ga.; 2013 U.S. Dist. LEXIS 102534).

    Gist-Of-Action Doctrine Bars Negligence Claim Against Insurance Agent, Judge Says

    SCRANTON, Pa. - The gist-of-the-action doctrine precludes an insurer's negligence and misrepresentation claims against an insurance agent, a Pennsylvania federal judge ruled July 22 (Cumberland Mutual Fire Insurance Co. and Cumberland Insurance Company Inc. v. Michael Gratz Insurers and Michael Gratz, No. 12-2404, M.D. Pa.; 2013 U.S. Dist. LEXIS 101867).

    Broker Was Fraudulently Joined, Must Be Dismissed From Case, Federal Judge Rules

    CHARLESTON, W.Va. - An insurance broker was fraudulently joined in a doctor insured's breach of contract and unfair trade practices lawsuit, a West Virginia federal judge ruled July 23, denying the insured's motion to remand to state court (Emmanuel O. Soyoola v. Oceanus Insurance Co., et al., No. 2:13-cv-08907, S.D. W.Va.; 2013 U.S. Dist. LEXIS 102519).

    Contractor's Affirmative Defenses Deemed Insufficient Pleading Of Bad Faith Claim

    PORTLAND, Ore. - Even though a defendant building contractor had discussed possible bad faith by insurers in previous briefing, an Oregon federal judge on July 23 found that this did not constitute a proper assertion of the claim, further holding that allowing the contractor to raise the claim for the first time in a summary judgment motion would prejudice the insurers (The Charter Oak Insurance Co., et al. v. Interstate Mechanical Inc., et al., No. 3:10-cv-01505, D. Ore.; 2013 U.S. Dist. LEXIS 102725).

    Judge: Discovery Update To Be Given To Special Deputy Receiver Of Insolvent Insurers

    ST. LOUIS - A federal judge in Missouri on July 19 ordered defendants to provide a discovery status update to the special deputy receiver (SDR) of three insolvent insurers regarding their larger document collection (Jo Ann Howard & Associates P.C., et al. v. J. Douglas Cassity, et al., No. 09-01252, E.D. Mo.; 2013 U.S. Dist. LEXIS 101135).

    Insured Found To Have Alleged Agency, Alter-Ego Theories Against Insurer

    SACRAMENTO, Calif. - A California federal judge on July 19 concluded that a policyholder sufficiently alleged theories of agency and alter ego concerning two insurers in a dispute over coverage for an underlying intellectual property dispute, leading him to mostly deny the insurers' motion to dismiss (Dale M. Wallis, D.V.M., et al. v. Centennial Insurance Company Inc., et al., No. 2::08-cv-02558, E.D. Calif.; 2013 U.S. Dist. LEXIS 101704).

    No Discrimination In Barring Risk Retention Groups From Insurance Guaranty, Panel Says

    TRENTON, N.J. - New Jersey does not discriminate against risk retention groups by barring their participation in New Jersey Property-Liability Insurance Guaranty Association's (PLIGA) program for payment of pedestrian personal injury protection (PIP) benefits, a New Jersey appeals panel affirmed July 18 (American International Insurance Company of Delaware v. 4M Interprise Inc., et al., No. A-3490-11T2, N.J. Super., App. Div.; 2013 N.J. Super. LEXIS 110).

    Insured Failed To Provide Timely Notice Of Contamination Claim, N.Y. Justice Says

    NEW YORK - An insurer owes no coverage for an environmental contamination cleanup claim because the insured failed to provide timely notice of the claim pursuant to the policy's terms, a New York Supreme Court justice said July 18 (Travelers Indemnity Co. v. Orange and Rockland Utilities Inc., et al., No. 603601/02, N.Y. Sup., New York Co.).

    Judge Refuses To Dismiss Insurer's Suit Seeking Recovery Of $1.7M Settlement

    CHICAGO - An Illinois federal judge on July 22 refused to dismiss a legal malpractice lawsuit brought by an insurer, as subrogee of the City of Markham, Ill., seeking reimbursement of the $1.7 million it paid to settle an underlying malicious prosecution lawsuit against the city (Scottsdale Insurance Co. v. Moyenda M. Knapp, et al., No. 13 C 988, N.D. Ill., Eastern Div.; 2013 U.S. Dist. LEXIS 101755).

    Insured's Failure To Comply With Policy Conditions Negated Coverage, Judge Finds

    KNOXVILLE, Tenn. - Because an insured failed to perform her duty to submit to an examination under oath (EUO) in connection with her insurer's investigation of a fire loss claim, a Tennessee federal judge on July 18 granted summary judgment to the insurer on a bad faith declaratory claim against it (Amelia Davis Lester v. Allstate Property and Casualty Insurance Co., No. 3:12-cv-299, E.D. Tenn.; 2013 U.S. Dist. LEXIS 101380).

    Judge Finds Insurer's Definition Of 'Relative' Does Not Violate Public Policy

    PHOENIX - An Arizona federal judge on July 19 held that a policy's definition of "relative" related to underinsured motorist (UIM) coverage did not violate public policy, as defined by Arizona's Uninsured/Underinsured Motorist Act (UMA), because the act doe not "restrict the parties' right to agree on who is insured" (Sammy Abbass, et al. v. American Family Insurance Group, et al., No. 2:13-cv-00268, D. Ariz.; 2013 U.S. Dist. LEXIS 101994).

    'Your Work' Exclusion Bars Coverage For Insured's Faulty Work, Judge Finds

    KNOXVILLE, Tenn. - The "your work" exclusion under a commercial general liability insurance policy precludes coverage for damage caused by an insured's faulty workmanship, a Tennessee federal judge ruled July 18 (Builders Mutual Insurance Co. v. Clayton Pickens, et al., No. 13-00022, E.D. Tenn.; 2013 U.S. Dist. LEXIS 101410).

    Federal Judge Dismisses Bad Faith Claim In Professional Liability Coverage Dispute

    ST. LOUIS - Finding that a law firm insured's bad faith claim against its professional liability insurer is not wholly independent of its breach of contract and vexatious refusal claims, a Missouri federal judge on July 22 granted the insurer's motion to dismiss the bad faith claim (The Hullverson Law Firm P.C., et al. v. Liberty Insurance Underwriters Inc., No. 4:12-CV-1994 CAS, E.D. Mo., Eastern Div.; 2013 U.S. Dist. LEXIS 101640).

    Judge: Insurance Guaranty Association Failed To Show Product Liability Claim

    ORLANDO, Fla. - The Florida Insurance Guaranty Association (FIGA), substituting for an insolvent insurer, failed to establish that a cooker was defective and caused an insured's fire, a Florida federal judge held July 18 (Florida Insurance Guaranty Association v. National Presto Industries Inc., No. 12-160, M.D. Fla.; 2013 U.S. Dist. LEXIS 100592).

    Judge: Insured's Attempt To Implicate Advertising Injury 'Is Simply Too Strained'

    SAN FRANCISCO - An insured has failed to demonstrate that the claims made against it in an underlying multidistrict litigation trigger its commercial general liability insurance policy's "advertising injury" provisions, a California federal judge ruled July 19, granting the insurer's motion for summary judgment in a coverage dispute over an alleged price-fixing conspiracy involving flat panels incorporated into electronic products (Epson Electronics America Inc. v. Tokio Marine and Nachido Fire Insurance Co. Ltd, etc., No. C 12-4592 RS, N.D. Calif.; 2013 U.S. Dist. LEXIS 101430).

    Judge Grants Motion To Stay Reinsurance Case Pending Appeal Of Earlier Decisions

    CHICAGO - A federal judge in Illinois on July 18 granted a motion to stay a reinsurance dispute by the alleged assignee to certain rights under a number of reinsurance agreements, pending the appeal of a pair of the court's earlier decisions (Pine Top Receivables of Illinois, LLC v. Banco De Seguros Del Estado, No. 12-cv-06357, N.D. Ill.).

    Appeals Panel Dismisses Breach Of Contract Suit Against Insurance Agent

    ROCHESTER, N.Y. - A New York appeals panel on July 19 dismissed a breach of contract and negligence lawsuit against an insurance agent regarding the agent's alleged failure to inform a successor company of the previous insured's balance of $12,000 on insurance premiums owed (5 Awnings Plus Inc., f/k/a Portage House Motel Inc. v. Moses Insurance Group Inc., No. 12-02300, N.Y. Sup., App. Div., 4th Dept.; 2013 N.Y. App. Div. LEXIS 5324).

    Negligent Procurement Claim Fails Against Insurance Agent, Federal Judge Finds

    KANSAS CITY, Kan. - Insureds failed to prove that an insurance agent negligently procured a disability insurance policy, a Kansas federal judge ruled July 19 (Richard Fisher and Bettie Fisher v. Household Life Insurance Co., et al., No. 10-2547, D. Kan.; 2013 U.S. Dist. LEXIS 101191).

    California Panel Reverses Ruling In Insurer's Favor, Finds Potential For Coverage

    SAN DIEGO - A California appeals panel on July 19 reversed and remanded a lower court's ruling in favor of an insurer, finding that an underlying cross-complaint against the insured suggests a claim that is potentially covered by the policy's advertising injury provision (TetraVue Inc. et al. v. St. Paul Fire & Marine Insurance Co., No. D061002, Calif. App., 4th Dist., Div. 1; 2013 Cal. App. Unpub. LEXIS 5074).

    S.C. High Court Says Policy Does Not Cover Damage After Insured Completed Work

    COLUMBIA, S.C. - A commercial general liability insurance policy does not provide coverage for a brick face that was damaged by improper cleaning by a subcontractor after the insured who hired the subcontractor completed its installation, the South Carolina Supreme Court held July 17, reversing a trial judge's ruling (Bennett & Bennett Construction Inc. v. Auto Owners Insurance Co., No. 2011-183007, S.C. Sup.).