SAN FRANCISCO - A California federal magistrate judge on Oct. 30 found that a group of homeowners' claims that their mortgagee improperly forced them to maintain excessive flood insurance coverage failed because both the respective deeds of trust and federal law permit a lender to require flood insurance equal to the replacement cost value (RCV) of a home (Clifford McKenzie, et al. v. Wells Fargo Home Mortgage Inc., No. 3:11-cv-04965, N.D. Calif.; 2012 U.S. Dist. LEXIS 155480).
DENVER - Insurers of an environmental consulting firm accused of colluding in the Lago Agrio, Ecuador, litigation to falsify documents and misrepresent the activities of oil extraction companies in a region of the Amazon, which resulted in an $18 billion judgment for personal injuries and property damage, won summary judgment Nov. 1 in a duty-to-defend declaratory judgment action filed in the U.S. District Court for the District of Colorado (Navigators Specialty Insurance Co. v. Douglas Beltman, et al., No. 11-715, D. Colo.; 2012 U.S. Dist. LEXIS 156666).
SEATTLE - Even though a Washington federal judge on Oct. 29 determined that an insured was permitted to maintain a bad faith claim despite the previous dismissal of a breach of contract claim, the judge held that the claim failed because the plaintiff "failed to raise a genuine issue of material fact as to the harm element" of the claim (Robert E. Nesbitt v. Progressive Northwestern Insurance Co., No. 2:11-cv-02117, W.D. Wash.; 2012 U.S. Dist. LEXIS 155502).
LOS ANGELES - A holding company is not liable for damages alleged by the California insurance commissioner in a $4.33 billion suit over a conspiracy to fraudulently obtain the assets of failed insurance company Executive Life Insurance Co. (ELIC), a federal jury in California found Oct. 29 (John Garamendi, et al. v. Altus Finance S A, et al., No. 99-02829, C.D. Calif.). Subscribers may view the available within the full article.
BRIDGEVIEW, Ill. - A statute of limitations within a force-placed insurance policy did not bar a homeowner's breach of contract claim, an Illinois appeals panel ruled Oct. 26, citing the insurer's failure to explicitly deny coverage and to inform the insured of the amount of time tolled (Olla Burress-Taylor v. American Security Insurance Co., et al., No. 1-11-0554, Ill. App., 1st Dist.; 2012 Ill. App. LEXIS 879).
CHICAGO - An Illinois federal judge on Oct. 29 refused to dismiss an insurer's contribution claims against another insurer regarding the defense and indemnity of a mutual insured in an underlying construction defect action (Hartford Casualty Insurance Co. v. Construction Builders in Motion Inc., et al., No. 11-7498, N.D. Ill.; 2012 U.S. Dist. LEXIS 154445).
DENVER - Genuine issues of fact exist as to whether a contractor's arbitration award, if any, falls within a commercial general liability (CGL) insurance policy's coverage and is not excluded, a Colorado federal judge found Oct. 29 (American Family Insurance Co. v. Apartment Builders LP and Roessner & Roessner Inc., No. 11-01380, D. Colo.; 2012 U.S. Dist. LEXIS 154737).
INDIANPOLIS - An Indiana federal magistrate judge on Oct. 29 held that the defendants in a flood insurance dispute were permitted to assert an affirmative defense naming the plaintiff's real estate agent as a nonparty whose fault caused or contributed to the claimed injury under Indiana's Comparative Fault Act (CFA) (Michael Benbenek v. Fidelity National Property and Casualty Insurance Co., et al., No. 1:12-cv-0591, S.D. Ind.; 2012 U.S. Dist. LEXIS 154565).
SAN FRANCISCO - An insurer had a duty to defend insurance agents in a trade secrets case; however, the agents did not prove any of their equitable defenses to the insurer's recoupment claim, a California appeals panel held Oct. 26, reversing judgment against the insurer and remanding the case for determination of the amount of recoupment (State Farm Fire & Casualty Co. v. John Wier, et al., No. A127243; John Wier, et al. v. State Farm Fire & Casualty Co., Nos. A125563 & A127551, Calif. App., 1st Dist., Div. 1; 2012 Cal. App. Unpub. LEXIS 7842).
LOS ANGELES - Finding no evidence that an insured accused of patent and trademark infringement disparaged a competitor, a California appeals court on Oct. 29 ruled in favor of an insurer, holding that it has no duty to defend in the case (Hartford Casualty Insurance Company v. Swift Distribution Inc., No. B234234, Calif. App., 2nd Dist., Div. 3).
NEW ORLEANS - A disability plan administrator did not abuse its discretion under the Employee Retirement Income Security Act by interpreting the plan to require objective medical evidence of functional limitations and concluding that a participant failed to demonstrate such limitations, the Fifth Circuit U.S. Court of Appeals affirmed Oct. 25 (Linda Dudley v. Sedgwick Claims Management Services Incorporated, No. 11-11165, 5th Cir.; 2012 U.S. App. LEXIS 22252).
CLEVELAND - An Ohio federal judge on Oct. 25 held that Cuyahoga County is not entitled to a defense and indemnification in a suit brought by the administratrix of the estate of a man who died from complications from drug withdrawal while in the county's jail (Cuyahoga County, et al v. State Automobile Mutual Insurance Co., No. 08-1339, N.D. Ohio; 2012 U.S. Dist. LEXIS 15379).
DENVER - An insured builder is covered under a commercial general liability policy for certain damages that arose from the builder's own faulty workmanship, unless there are specific exclusions, the Colorado Court of Appeals concluded Oct. 25 (Colorado Pool Systems Inc. and Patrick Kitowski v. Scottsdale Insurance Co., et al., No. 10CA2638, Colo. App.; 2012 Colo. App. LEXIS 1732).
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on Oct. 26 dismissed an appeal by an insurer regarding coverage for an underlying action by homeowners alleging design and construction defects in their homes because the federal court did not issue a final decision (Auto-Owners Insurance Co. v. Madison at Park West Property Owners Association Inc., et al., No. 11-1848, 4th Cir.; 2012 U.S. App. LEXIS 22302).
TROY, Mich. - A commercial general liability insurance policy provides no coverage for an insured's portion of a negligence award issued to homeowners for negligent construction, a Michigan appeals panel affirmed Oct. 25 (Gerald T. Heaton and Jonna Heaton v. Pristine Home Builders LLC, et al., No. 305305, Mich. App.; 2012 Mich. App. LEXIS 2155).
WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 29 denied review of an 11th Circuit U.S. Court of Appeals ruling that an Employee Retirement Income Security Act, 29 U.S.C.S. § 1001 et seq., ERISA--governed disability insurer that terminated benefits to a claimant with a heart condition acted reasonably (Myra Ray v. Sun Life & Health Insurance Company, No. 12-337, U.S. Sup.).
LOS ANGELES - A California appeals panel on Oct. 25 affirmed the allocation of costs for the defense of a mutual insured in an underlying construction defects action between a general liability insurer and commercial general liability insurer; however, the panel found that the award of prejudgment interest was wrong (St. Paul Mercury Insurance Co. v. Mountain West Farm Bureau Mutual Insurance Co., No. B229345 c/w B231919, Calif. App., 2nd Dist., Div. 3; 2012 Cal. App. LEXIS 1118).
MADISON, Wis. - A federal judge in Wisconsin on Oct. 26 ordered that three related reinsurance arbitration disputes be transferred to the U.S. District Court for the Southern District of New York, holding that the New York venue is more proper than the Wisconsin venue (Nationwide Mutual Insurance Company v. Arrowood Indemnity Company, No. 12-cv-00284, Employers Insurance Company of Wausau v. Arrowood Indemnity Company, No. 12-cv-00283 and National Casualty Company v. Arrowood Indemnity Company, No. 12-cv-00285, W.D. Wis.; 2012 U.S. Dist. LEXIS 154140).
HARRISON, Ark. - An insurer owes coverage to its insureds for damages caused when a frozen water pipe burst in an insured motel because the insureds did their best to maintain heat in the building as required by the policy, an Arkansas federal judge said Oct. 26 (Sonrob Hosts LLC et al. v. Lafayette Insurance Co. et al., No. 11-CV-03094, W.D. Ark; 2012 U.S. Dist. LEXIS 154085).
ORLANDO, Fla. - An insurer has a duty to defend and indemnify its insureds in an underlying wrongful death suit alleging that an individual contracted Legionnaires' disease while a guest at an insured hotel because the bacteria that caused the disease are not considered a pollutant under the policy's pollution exclusion and the bacteria or fungi exclusion does not apply to bar coverage, the 11th Circuit U.S. Court of Appeal said Oct. 25 (Westport Insurance Corp. v. VN Hotel Group LLC, et al., No. 11-14883, 11th Cir.; 2012 U.S. App. LEXIS 22187 ).
INDIANAPOLIS - An Indiana trial court did not err in ruling that an insurer owes coverage to its insured for environmental contamination and remediation costs because the policies' pollution exclusions are ambiguous, the Indiana Court of Appeals said Oct. 23 (State Automobile Insurance Co. et al. v. DMY Realty Co. LLP et al., No. 49A05-1109-PL-486, Ind. App.; 2012 Ind. App. LEXIS 531).
WASHINGTON, D.C. - A plaintiff's stipulation regarding limiting damages to keep a class suit in state court has no effect on the Class Action Fairness Act of 2005, 28 USCS § 1711 (CAFA) amount-in-controversy determination, The Standard Fire Insurance Co. told the U.S. Supreme Court in an Oct. 22 petitioner brief (The Standard Fire Insurance Company v. Greg Knowles, et al., No. 11-1450, U.S. Sup.). View related prior history, 2012 U.S. LEXIS 5088.
RICHMOND, Va. - A West Virginia federal judge did not err in finding that insurers properly denied coverage for an underlying patent infringement lawsuit, the Fourth Circuit U.S. Court of Appeals ruled Oct. 23 (Wilson Works Inc. v. Great American Insurance Group, et al., No. 12-1487, 4th Cir.). Subscribers may view the decision available within the full article.
LOS ANGELES - Property damage claims against an insured based on construction defects were excluded under insurance policies, a California appeals panel affirmed Oct. 22 (O & S Holdings LLC, et al. v. Fireman's Fund Insurance Co., et al., No. B231912, Calif. App., 2nd Dist., Div. 7; 2012 Cal. App. Unpub. LEXIS 7599).
ST. LOUIS - A Missouri appeals panel on Oct. 23 said that an insurance policy does not cover statutory damages for junk faxes and that the insurance company had no duty to defend a class action lawsuit or to indemnify the insured for a $5 million settlement (Columbia Casualty Company v. HIAR Holdings, L.L.C., et al., No. ED98253, Mo. App., E. Dist.; 2012 Mo. App. LEXIS 1334).