LexisNexis® Legal Newsroom
    Mealey's Insurance - Panel Finds CGL Insurer Had Duty To Defend, But Reverses Damages Award

    ATLANTA - A commercial general liability insurer had a duty to defend an insured against a construction defects lawsuit, the 11th Circuit U.S. Court of Appeals affirmed April 7; however, the panel reversed an award of damages for the brick, tiles and mud base and remanded for a new determination of damages to be awarded (Hugh A. Carithers and Katherine S. Carithers v. Mid-Continent Casualty Co., No. 14-11639, 11th Cir.; 2015 U.S. App. LEXIS 5540).

    Mealey's Insurance - New York Federal Judge Enters Judgment In Favor Of Insured For Environmental Costs

    NEW YORK - A New York federal judge overseeing Olin Corp.'s environmental coverage litigation on April 6 entered judgment in the amount of almost $82 million in favor of Olin Corp. and against OneBeacon Insurance Co. for costs associated with environmental contamination at four sites (Olin Corp. v. Insurance Company of North America, et al., No. 84-1968, S.D. N.Y.).

    Mealey's Insurance - Judge Approves $60,000 Payment Of Insolvent Insurer's Lien

    CHICAGO - An Illinois judge on April 2 approved a $60,000 agreement that pays a portion of a workers' compensation lien placed by an insolvent insurer and releases the insolvent insurer's obligations under a workers' compensation policy (In the Matter of the Liquidation of Reinsurance Company of America, Inc., No. 10-CH-06207, Ill. Cir., Cook Co.).

    Mealey's Insurance - Insurer Owes A Duty To Defend Against Environmental Cleanup Claim, Judge Says

    HAMMOND, Ind. - An insurer has a duty to defend its insured against an environmental contamination cleanup claim filed by the U.S. Environmental Protection Agency because the site for which the insured seeks coverage was not included in a prior settlement agreement, an Indiana federal judge said April 2 (American Chemical Service Inc. v. United States Fidelity & Guaranty Co., No. 13-177, N.D. Ind.; 2015 U.S. Dist. LEXIS 44000).

    Mealey's Insurance - Vermont High Court Majority Says Policy's Pollution Exclusion Is Not Ambiguous

    MONTPELIER, Vt. - A majority of the Vermont Supreme Court on April 3 determined that an insurer's pollution exclusion is not ambiguous and applies to a spray foam insulation product that was discharged and allegedly caused an underlying claimant to experience respiratory problems (Cincinnati Specialty Underwriters Insurance Co. v. Energy Wise Homes Inc., et al., No. 14-165, Vt. Sup.; 2015 Vt. LEXIS 33).

    Mealey's Insurance - Funds Do Not Qualify As Blocked Assets Under Statute, Majority Says In Reversal

    CHICAGO - A majority of the Seventh Circuit U.S. Court of Appeals on April 2 found that money that was the property of an affiliate of the al Qaeda terrorist organization does not qualify as a blocked asset under the Terrorism Risk Insurance Act (TRIA) and, therefore. insurers cannot receive the funds to satisfy a judgment against Al Qaeda for their $2.5 billion subrogation claims stemming from the Sept. 11, 2001, terrorist attacks, reversing and remanding a lower court (United States of America v. All Funds on Deposit with R.J. O'Brien & Associates, held in the name of Bridge Investment, et al., Nos. 13-3732 & 13-3738, 7th Cir.; 2015 U.S. App. LEXIS 5305).

    Mealey's Insurance - Receiver Asks Court To Certify Order As Final And Appealable

    FRESNO, Calif. - The receiver of an insolvent insurer asked a federal court in California on April 1 to certify one of the court's previous orders as final (Thomas T. Hawker, et al. v. BancInsure, Inc., et al., No. 12-cv-01261, E.D. Calif.).

    Mealey's Insurance - Judge Orders End Of Florida Insolvent Insurer's Liquidation

    TALLAHASSEE, Fla. - A Florida judge on April 2 terminated an insolvent insurer's liquidation after more than 20 years of liquidation proceedings (In Re: The Receivership of Trans-Florida Casualty Insurance Company, No. 92-CA-002583, Fla. Cir., Leon Co.).

    Mealey's Insurance - Judge Grants Dismissal Of Insurers' Equitable Reimbursement Claim

    FRESNO, Calif. - Commercial general liability insurers fail to assert any claims for breach of the cooperation clause of the insurance agreement or for equitable reimbursement, a California federal magistrate judge held April 3, granting the dismissal of claims against additional insureds regarding a defense in an underlying construction defects case (Travelers Property Casualty Company of America, et al. v. Centex Homes, et al., No. 14-01388, E.D. Calif.; 2015 U.S. Dist. LEXIS 44340).

    Mealey's Insurance - Judge: Statute Precludes Challenge To Post-ACA Reimbursement Calculation

    WASHINGTON, D.C. - The Medicare statute precludes a hospital's challenge to reimbursement calculations made under the amended rules of the Patient Protection and Affordable Care Act (ACA), a federal judge in the District of Columbia held March 31 (Florida Health Sciences Center Inc., d/b/a Tampa General Hospital v. Secretary U.S. Department of Health and Human Services, No. 14-0791, D. D.C.; 2015 U.S. Dist. LEXIS 42650).

    Mealey's Insurance - Louisiana Panel Affirms Ruling In Favor Of Professor In Homeowner Coverage Dispute

    LAKE CHARLES, La. - A Louisiana appeals panel on April 1 held that the circumstances surrounding outrageous conduct alleged against a professor insured cannot be viewed absent a claim of a delusional episode, rejecting a homeowners insurer's argument that coverage is barred as an intentional act or as undertaken as part of a business pursuit (Kacie Renee Spears v. Shelter Mutual Insurance Company, et al., No. 14-1191, La. App., 3rd Cir.; 2015 La. App. LEXIS 641).

    Mealey's Insurance - Insurer Did Not Abuse Discretion In Terminating Claim, Federal Judge Says

    TRENTON, N.J. - A disability insurer did not abuse its discretion in terminating a long-term disability benefits claim because the evidence supports the insurer's decision to terminate benefits, a New Jersey federal judge said March 31 (Frank Reed v. Citigroup Inc. et al., No. 12-2934, D. N.J.; 2015 U.S. Dist. LEXIS 43364).

    Mealey's Insurance - Judge: Insurer Has No Duty To Defend, Indemnify Construction Defect Cases

    MOBILE, Ala. - A commercial general liability insurer has no duty to defend or indemnify an insured against two underlying construction defect lawsuits, an Alabama federal judge ruled April 1, granting default judgment in favor of the insurer (Essex Insurance Co. v. J & J Masonry LLC, et al., No. 14-2138, N.D. Ala.; 2015 U.S. Dist. LEXIS 42336).

    Mealey's Insurance - Judge: Insurer Has No Duty To Defend, Indemnify Costs From Faulty Work

    CHICAGO - A contractor's insurer has no duty to defend or indemnify a subrogated homeowners insurer for damages caused by the contractor's alleged defective workmanship, an Illinois federal judge ruled March 31 (AMCO Insurance Co. v. Northern Heritage Builders LLC and American Family Insurance Co., No. 12-09071, N.D. Ill.; 2015 U.S. Dist. LEXIS 41341).

    Mealey's Insurance - Pollution Exclusion Can Be Applied To Preclude Coverage, Ariz. Federal Judge Says

    PHOENIX - Because an insured failed to identify any sudden or accidental discharge that caused groundwater and soil contamination at an insured site, the applicable policies' pollution exclusions can be applied to preclude coverage for the contamination, an Arizona federal judge said March 31 (Nammo Talley Inc. v. Allstate Insurance Co. et al., No. 11-01007. D. Ariz.; 2015 U.S. Dist. LEXIS 43696).

    Mealey's Insurance - Federal Judge Sets Aside Default In Bad Faith Lawsuit

    NEWARK, N.J. - A federal judge in New Jersey on April 1 granted an insurer's motion to set aside default in an insurance breach of contract and bad faith lawsuit, ruling that the insurer has presented meritorious defenses and that granting the motion will not prejudice the insureds that brought the action (Robert J. Ryan, et al. v. Liberty Mutual Insurance, No. 14-6308, D. N.J.; 2015 U.S. Dist. LEXIS 42660).

    Mealey's Insurance - Trial Court Erred In Compelling Appraisal, Florida Panel Says In Reversal

    MIAMI - A Florida appeals panel on April 1 found that a lower court erred in issuing an order that compelled appraisal in a coverage dispute over a supplemental claim for Hurricane Wilma damage (State Farm Insurance Co. v. Efrain Xirinachs, et al., No. 3D14-1212, Fla. App., 3rd Dist.; 2015 Fla. App. LEXIS 4681).

    Mealey's Insurance - No Coverage Owed For Damages Caused By Rain, Mississippi Federal Judge Finds

    JACKSON, Miss. - An insurer has no duty to defend its insured for underlying claims arising out of water damage caused by the insured's failure to properly cover a roof it was replacing because the policy specifically excludes coverage for damages caused by rain, a Mississippi federal judge said March 30 (Mesa Underwriters Specialty Insurance Co. f/k/a Montpelier U.S. Insurance Co. v. LJA Commercial Solutions LLC, et al., No. 13-29, S.D. Miss.; 2015 U.S. Dist. LEXIS 40596).

    Mealey's Insurance - Panel Affirms Insurer Did Not Abuse Discretion In Terminating Benefits

    BOSTON - A disability insurer's decision to terminate a claimant's long-term disability (LTD) benefits based on the policy's 24-month limitation provision was not an abuse of discretion because there is substantial evidence supporting the insurer's decision, the First Circuit U.S. Court of Appeals said March 30 (Mark Dutkewych v. Standard Insurance Co., et al., No. 14-1450, 1st Cir.; 2015 U.S. App. LEXIS 5108).

    Mealey's Insurance - Lower Level Of Home Qualifies As A 'Basement,' No Coverage, 1st Circuit Affirms

    BOSTON - The First Circuit U.S. Court of Appeals on April 1 affirmed a lower federal court's ruling that the lower level of an insured's home qualifies as a "basement" under his Standard Flood Insurance Policy (SFIP) and, therefore, the insurer properly denied coverage for his claim for flood damage under the basement exclusion (Jacob Matusevich v. Middlesex Mutual Assurance Co., et al., No. 14-1370, 1st Cir.; 2015 U.S. App. LEXIS 5261).

    Mealey's Insurance - 10th Circuit Panel Remands Carbon Monoxide Coverage Suit To Determine Citizenship

    DENVER - Because complete diversity of citizenship may not exist in an insured's suit seeking coverage for underlying claims stemming from carbon monoxide poisoning at an insured hotel, the 10th Circuit U.S. Court of Appeals on March 31 remanded the suit to the Oklahoma federal court to determine if diversity of citizenship existed when the complaint was filed (Siloam Springs Hotel LLC v. Century Surety Co., No. 14-6119, 10th Cir.; 2015 U.S. App. LEXIS 5146).

    Mealey's Insurance - Judge: Fact Issues Exist On Whether Insurance Policy Covers Improper Installation

    DETROIT - Genuine issues of material fact exist as to whether improper installation of adhesive that led to building defects constitutes an "occurrence" and "property damage" arising under a commercial general liability insurance policy's coverage period, a Michigan federal judge ruled March 30, denying summary judgment to the insurer (Les Stanford Cadillac Inc. v. The Cincinnati Insurance Co., No. 12-15630, E.D. Mich.; 2015 U.S. Dist. LEXIS 40063).

    Mealey's Insurance - Government: Representatives In ACA Funding Challenge Lack Standing

    WASHINGTON, D.C. - A federal judge should ignore "alarmist" rhetoric and instead find that House of Representatives members lack standing to challenge how the government spends Patient Protection and Affordable Care Act (ACA) funds, the government argues in a March 31 brief (United States House of Representatives v. Sylvia Mathews Burwell, et al., No. 14-1967, D. D.C.).

    Mealey's Insurance - Judge Substantially Denies Summary Judgment In Insurance Bad Faith Suit

    SOUTH BEND, Ind. - A federal judge in Indiana on March 31 substantially denied an insurer's motion for summary judgment in an insurance bad faith lawsuit, ruling that questions of material fact exist as to whether an insured checked off a box declining uninsured/underinsured motorist coverage in an application for an umbrella policy (Patricia Conley v. State Farm Fire and Casualty Co., No. 13-141, N.D. Ind.; 2015 U.S. Dist. LEXIS 41072).

    Mealey's Insurance - Panel: Insurer Has No Duty To Defend 'Perpetrators' Of 'Mortgage Loan Fraud'

    SAN DIEGO - A California appeals panel on March 27 affirmed a lower court's ruling that there is no coverage for an underlying claim that was either a real estate sales transaction or a "fraudulent scheme clothed as a mortgage transaction" (Angel Castrejon, et al. v. United States Liability Insurance Co., No. D064679, Calif. App., 4th Dist., Div. 1; 2015 Cal. App. Unpub. LEXIS 2162).