DETROIT - An insured voluntarily incurred defense fees and costs of more than $1.3 million and failed to provide the proper notice to its insurer of the underlying action, a Michigan federal judge ruled Oct. 22 (AMI Entertainment Network Inc. v. Zurich American Insurance Co., No. 12-12972, E.D. Mich.; 2012 U.S. Dist. LEXIS 151543).
NEW HAVEN, Conn. - An insurer has a duty to defend against claims for damages suffered by a worker at an insured's site, a Connecticut federal judge ruled Oct. 22, finding that exclusions for employer's liability and professional services do not apply (Vermont Mutual Insurance Co. v. Paul E. Ciccone, et al., No. 09-00445, D. Conn.; 2012 U.S. Dist. LEXIS 151756).
ST. LOUIS - A decedent's children lacked standing as beneficiaries under the Employee Retirement Income Security Act to continue a lawsuit for denial of benefits, even though the plan provided that the insurer could make payments to the decedent's children rather than the estate, because the only timely claim for benefits was made by the estate and the estate did not appeal the denial of benefits, the Eighth Circuit U.S. Court of Appeals affirmed Oct. 19 (A.J., et al. v. UNUM, et al., No. 11-3578, 8th Cir.; 2012 U.S. App. LEXIS 21859).
SCRANTON, Pa. - A homeowners insurance provider on Oct. 19 saw its summary judgment motion denied, as a Pennsylvania federal judge ruled that disputed material facts over the source of water that led to home damage were best left to a jury to decide (Yuriy Pinkhasov v. Allstate Property and Casualty Co., No. 3:11-cv-00171, M.D. Pa.; 2012 U.S. Dist. LEXIS 151048).
HARRISBURG, Pa. - In a majority ruling, a Pennsylvania court remanded an action filed by the purchasers of a home against a building inspection company for further proceedings, finding that the trial court did not err in denying the company's motion for summary judgment because the company had a statutory duty to make sure that it obtained required permits (Daniel and Christine Baker v. Reese Bros. et al., No. 1546 C.D. 2011, Pa. Comm.; 2012 Pa. Commw. Unpub. LEXIS 796).
LOS ANGELES - Citing "numerous instances of material representations and several inconsistencies" by the owners of a vehicle at the center of an auto insurance coverage dispute, a California appeals panel on Oct. 19 affirmed summary judgment to the insurer on breach of contract and bad faith claims against it (Allen Hodjat, et al. v. State Farm Mutual Automobile Insurance Co., No. B233996, Calif. App., 2nd Dist.; 2012 Cal. App. Unpub. LEXIS 7557).
DENVER - Stating that it was "troubled by [a] district court's failure to discuss a number of . . . material facts" in a bad faith dispute over a homeowners claim, a 10th Circuit U.S. Court of Appeals panel on Oct. 22 reversed that court's grant of summary judgment to the insurer (Alan Blakely, et al. v. USAA Casualty Insurance Co., No. 11-4218, 10th Cir.; 2012 U.S. App. LEXIS 21964).
PHOENIX - Because the destruction of an insured home was directly caused by water damage and earth movement, excluded causes of loss under a homeowners policy, no coverage is owed for the damages, an Arizona federal judge said Oct. 18 (Magda Stankova, et al., v. Metropolitan Property and Casualty Insurance Co., No. 12-8016, D. Ariz.; 2012 U.S. Dist. LEXIS 150900).
NEW YORK - A federal judge in New York on Oct. 19 granted an insurer's motion to appoint an arbitration umpire, finding that the Federal Arbitration Act (FAA) 9 U.S.C.S. § 1, et seq., mandates that a reinsurance agreement's method for umpire selection must be followed (In the Matter of the Arbitration between OneBeacon America Insurance Co. v. Swiss Reinsurance America Corp., No. 12-cv-05043, S.D. N.Y.). View related prior history, 2010 U.S. Dist. LEXIS 136039.
CONCORD, N.H. - A New Hampshire federal magistrate judge on Oct. 19 denied reconsideration of a ruling that an insurance agency breached its agreement and its fiduciary duties with two sureties by failing to remit the net premiums it collected on the sureties' bonds it later replaced with another surety's bonds (Washington International Insurance Co. and North American Specialty Insurance Co. v. Ashton Agency Inc., No. 10-526, D. N.H.; 2012 U.S. Dist. LEXIS 151076).
ORLANDO, Fla. - A Florida federal judge on Oct. 22 adopted and denied portions of a magistrate judge's report and recommendation in a case filed by an insurer that seeks a declaration in relation to rights and obligations under a policy covering a hotel and various employees involved in underlying litigation, finding that it was inappropriate to rule on a duty to indemnify claim at the present stage of the case (Penn-America Insurance Co. v. Deslin Hotels Inc., et al., No 6:11-cv-1990, M.D. Fla.; 2012 U.S. Dist. LEXIS 151361).
SYRACUSE, N.Y. - An insurer told a New York federal court on Oct. 22 that its suit against a pair of reinsurers should not be dismissed because the insurer states a claim upon which relief can be granted under the Federal Arbitration Act (Utica Mutual Insurance Company v. Employers Insurance Company of Wausau, et al., No. 12-cv-01293, N.D. N.Y.). Subscribers may view the brief available within the full article.
TAMPA, Fla. - A professional liability insurer has a duty to defend an accounting firm against a claim of conspiracy arising out of alleged negligent conduct in the performance of professional services, a Florida federal judge ruled Oct. 18 (Philadelphia Indemnity Insurance Company v. Stephen H. Hamic, et al., No. 12- 829, M.D. Fla., Tampa Div.; 2012 U.S. Dist. LEXIS 150067).
TAMPA, Fla. - A commercial general liability insurer had no duty to defend or indemnify an insured against an underlying action alleging conduct related to a partnership that was not listed as a named insured on the policy, a Florida federal judge ruled Oct. 17 (Carl H. Christiansen v. Mid-Continent Casualty Co., No. 12-01529, M.D. Fla.; 2012 U.S. Dist. LEXIS 149581).
LAFAYETTE, Ind. - An Indiana federal judge on Oct. 17 refused a motion by the state's excess medical malpractice fund to stay a declaratory action by a medical malpractice insurer against a physician/defendant in hundreds of medical liability lawsuits (The Medical Assurance Company, Inc. v. Mark S. Weinberger, M.D., et al., No. 4:06-117, N.D. Ind., Hammond Div at Lafayette).
JACKSON, Miss. - An insurance agent's representations over a purported bonus associated with four life insurance policies cannot support an insured's lawsuit against his insurer, a Mississippi federal judge ruled Oct. 17, because the policy clearly stated that the contract could not be modified by the agent (William E. Birdsong, et al. v. The Lincoln National Life Insurance Co., et al., No. 3:10-cv-00699, S.D. Miss.; 2012 U.S. Dist. LEXIS 149320).
BATON ROUGE, La. - Washington law applies to a bad faith lawsuit between an insured and its insurers regarding coverage for property damage claims, a Louisiana federal judge held Oct. 17, finding that the insured initially filed a lawsuit against the insurers in a Washington federal court before it was consolidated and transferred to the Louisiana court (The Shaw Group Inc., et al. v. Zurich American Insurance Co., et al., No. 12-00257, M.D. La.).
NEW ORLEANS - Although the Louisiana Supreme Court on Oct. 16 found it undisputed that an insurer acted in bad faith in not timely paying a settlement, it ruled that an appeals panel applied the wrong statute in assessing a $125,000 penalty against the insurer, reducing the penalty to $5,000 per the applicable statute (Katie Realty Ltd. v. Louisiana Citizens Property Insurance Corp., No. 2012-C-0588, La. Sup.; 2012-0588 [La. 10/16/12]; 2012 La. LEXIS 2710).
SAN FRANCISCO - Plant Insulation Co. on Oct. 17 sought approval in a California federal bankruptcy court of a settlement with two insurance companies that will provide at least $70 million over nine years to a trust established by Plant's Chapter 11 plan of reorganization to pay asbestos personal injury claims and end all disputes between Plant and the insurers, who have long opposed the company (In re Plant Insulation Co., No. 09-31347, N.D. Calif. Bkcy.). View related prior history, 2012 U.S. Dist. LEXIS 146071.
COLUMBUS, Ohio - Claims of defective construction or workmanship against an insured brought by a property owner are not claims for "property damage" caused by an "occurrence" under a commercial general liability insurance policy, a majority of the Ohio Supreme Court ruled Oct. 16, answering certified questions (Westfield Insurance Co. v. Custom Agri Systems Inc., No. 2012-Ohio-4712, Ohio Sup.; 2012 Ohio LEXIS 2485).
BOWLING GREEN, Ky. - A construction expert's testimony about possible causes of water damage to a rental home did not specify a cause and would confuse the jury, a federal judge in Kentucky held Oct. 16 in an insurance coverage and bad faith action (Harold Brantley v. Safeco Insurance Co. of America, No. 1:11-CV-00054, W.D. Ky.; 2012 U.S. Dist. LEXIS 148411).
SAN FRANCISCO - A California appeals panel on Oct. 16 ruled that insurance brokers should be allowed to amend their complaint to attempt to state a cause of action for misappropriation of trade secrets against another insurance brokerage firm and the employee that left their company to work for their competitor (FLF Inc., et al. v. Barney & Barney LLC, et al., Nos. A131131 & A132329, Calif. App., 1st Dist., Div. 2; 2012 Cal. App. Unpub. LEXIS 7475).
MOBILE, Ala. - A commercial general liability insurer has no duty to defend or indemnify its insured in connection with alleged defects in roofing work performed on church premises, an Alabama federal judge determined on Oct. 15 (Evanston Insurance Co. v. Damon Lett d/b/a Damon Lett Roofing, et al., No. 11-0383, S.D. Ala.; 2012 U.S. Dist. LEXIS 148357).
SPARTANBURG, S.C. - An insured failed to raise any genuine issue of material fact that it made a specific request for coverage advice or that the insurance agent undertook to advise the insured, a South Carolina federal judge ruled Oct. 15, granting summary judgment to the agent on negligence and negligent misrepresentation claims (CRC Scrap Metal Recycling LLC v. Hartford Casualty Insurance Co., et al., No. 12-146, D. S.C.; 2012 U.S. Dist. LEXIS 147696).
LANSING, Mich. - A Michigan appeals court on Oct. 16 affirmed a trial court's ruling in favor of a produce company, finding that an employee's embezzlement from the company was not excluded from coverage under a commercial insurance policy (Amerisure Insurance Co. v. Debruyn Produce Co., No. 307128, Mich. App.; 2012 Mich. App. LEXIS 2034).