U.S. High Court Denies Petition Disputing Government's Immunity In Katrina Dispute

    WASHINGTON, D.C. - The U.S. Supreme Court on June 24 refused to hear an appeal of a lower federal court's ruling that the application of the discretionary function exception (DFE) to the Federal Tort Claims Act (FTCA) completely insulates the U.S. government from liability for claimants' Hurricane Katrina flood damage (Kent Lattimore, et al. v. United States, et al., No. 12-1092, U.S. Sup.).

    Judge Finds No Bad Faith In Insurer Opting Not To Voluntarily Arbitrate

    SPOKANE, Wash. - Because an insurance policy's arbitration provision required agreement from both parties, a Washington federal judge found June 19, an insurer did not act in bad faith by declining its insured's repeated demands for arbitration in a dispute over underinsured motorist (UIM) coverage (Mary 'Julie' Clark, et al. v. Amica Mutual Insurance Co., No. 2:13-cv-00082, E.D. Wash.; 2013 U.S. Dist. LEXIS 86451).

    Judge Rules In Insurer's Favor In Coverage Suit Prompted By Hurricane Katrina

    GULFPORT, Miss. - A Mississippi federal judge on June 20 ruled in favor of a homeowners insurer in a dispute arising from Hurricane Katrina property damage (Terry Stolz, et al. v. State Farm Fire and Casualty Co., No. 12-101, S.D. Miss., Southern Div.; 2013 U.S. Dist. LEXIS 86834).

    Judge: Hailstorm Coverage Dispute Insufficient To Satisfy Federal Standards

    HOUSTON - An insured's "bare-bones" claims against an insurer are insufficient to satisfy federal pleading standards, a Texas federal judge ruled June 19, granting the insurer's motion to dismiss the insured's suit seeking coverage for hailstorm damage but allowing the insured leave to file an amended complaint within 20 days (Sara Dalton v. State Farm Lloyd's Inc., et al.; No. 12-3004, S.D. Texas; 2013 U.S. Dist. LEXIS 86490).

    Judge: Failure To Identify Insurer's False Statements Dooms Fraud-Based Claims

    HOUSTON - Despite having twice amended its complaint, an insured still failed to sufficiently identify any false statements made by its insurer, a Texas federal judge ruled June 19, granting a motion to dismiss the fraud-based claims against the insurer (Protectors Insurance and Financial Services LLC v. Lexington Insurance Co., No. 4:12-cv-03469, S.D. Texas; 2013 U.S. Dist. LEXIS 85726).

    Judge: Policy Covers Claims Stemming From Allegedly Defective Dermal Fillers

    SAN FRANCISCO - An insurer has a duty to pay the defense costs incurred by an insured's directors and officers related to underlying reputational injury and fraudulent conveyance claims arising from an alleged manufacturing defect in the insured's injectable dermal fillers, a California federal judge ruled June 18 (Scottsdale Insurance Co. v. Coapt Systems Inc., et al., No. 12-1780, N.D. Calif.; 2013 U.S. Dist. LEXIS 86414).

    N.J. Supreme Court: Asbestos Claims Are Not Covered Under Insolvent Insurer's Policies

    TRENTON, N.J. - Asbestos claims against a bankrupt insured manufacturer are not covered under excess comprehensive general liability insurance policies issued by its insolvent insurer, the New Jersey Supreme Court held June 19, finding that the doctrine of collateral estoppel applies (In the matter of the liquidation of Integrity Insurance Co./The Celotex Asbestos Trust, No. 068970, N.J. Sup.; 2013 N.J. LEXIS 588).

    Insurer's Method Of Offsetting Benefits Violated Plan Terms, 9th Circuit Rules

    SAN FRANCISCO - A disability plan insurer abused its discretion in violation of the Employee Retirement Income Security Act through its interpretation of the plan's provision regarding offsets for current income, the Ninth Circuit U.S. Court of Appeals ruled June 18 in an unpublished opinion (Jonathan E. Rivkin, M.D. v. The Union Central Life Insurance Company, No. 11-55975, 9th Cir.; 2013 U.S. App. LEXIS 12377).

    Coverage Barred For Oil Spill, 5th Circuit Appeals Panel Affirms

    NEW ORLEANS - No coverage exists for an insured's liabilities arising out of an oil spill because the insured did not provide notice of the incident within 30 days as clearly required by the policies' terms, the Fifth Circuit U.S. Court of Appeals said June 18 (St. Paul Fire & Marine Insurance et al. v. Settoon Towing LLC, et al., No. 11-31030, 5th Cir.; 2013 U.S. App. LEXIS 12424).

    Judge Finds Questions On Whether Insured Timely Complied With Requests

    SCRANTON, Pa. - Questions about the timing of a plaintiff's production of requested documents and information create issues of fact as to whether his insurer acted in bad faith in the timing and amount of its settlement offers to him, a Pennsylvania federal judge held June 19, denying the insurer's summary judgment motion (Michael Scott v. GEICO General Insurance Co., No. 3:11-cv-01790, M.D. Pa.; 2013 U.S. Dist. LEXIS 85701).

    Asbestos Coverage Disputes Between Flintkote, Insurers Go To Binding Arbitration

    WILMINGTON, Del. - A Delaware federal bankruptcy judge on June 20 granted relief from the automatic stay in The Flintkote Co.'s Chapter 11 case so that Flintkote and certain London market insurance companies can participate in binding arbitration to resolve disputes over insurance coverage for asbestos bodily injury claims (In re: The Flintkote Co., et al., No. 04-11300, D. Del. Bkcy.).

    Panel: No Coverage For Medical Negligence Suit Stemming From Autism Treatment

    ATLANTA - The 11th Circuit U.S. Court of Appeals on June 20 affirmed a lower federal court's ruling that an insurer had no duty to defend a doctor and a medical practice in a medical negligence lawsuit because the policy's professional services exclusion barred coverage for the underlying claims (Nationwide Mutual Fire Insurance Co. v. Creation's Own Corporation, et al., No. 12-16223, 11th Cir.; 2013 U.S. App. LEXIS 12591).

    Personal Injury Settlement Does Not Bar Direct Claims Against Insurer, Panel Rules

    SACRAMENTO, Calif. - An injured party's bad faith and breach of contract claims against an insurer are different than the issues he previously asserted against another party in a separate personal injury lawsuit, a California appeals panel found June 18, overturning a trial court's finding that the present case was precluded by collateral estoppel (Justin Barnes v. Western Heritage Insurance Co., No. C066002, Calif. App., 3rd Dist.; 2013 Cal. App. LEXIS 480).

    Judge: Policies In Dispute For Faulty Product Coverage Were Properly Rescinded

    PHILADELPHIA - Insurance policies were properly rescinded and declared null and void, and an additional insured is not entitled to more coverage than that afforded to the named insured for claims arising from allegedly defective fire suppression systems, a Pennsylvania federal judge ruled June 17, also finding that the insurer had a duty to defend the additional insured (Toll Bros. Inc. v. Century Surety Co., et al., No. 07-1296, E.D. Pa.; 2013 U.S. Dist. LEXIS 85101).

    Requested Documents Are Not Relevant To Choice-Of-Law Analysis, Federal Judge Says

    INDIANAPOLIS - An Indiana federal judge on June 17 overruled an insured's objections to a magistrate judge's discovery ruling after determining that the documents sought by the insured were not relevant to the choice-of-law analysis in an environmental contamination coverage dispute (Visteon Corp. et al. v. National Union Fire Insurance Company of Pittsburgh, Pa. et al., No. 11-200, S.D. Ind.; 2013 U.S. Dist. LEXIS 84628).

    N.C. Federal Judge Enters Judgment In Favor Of Insurer In Auto Coverage Dispute

    WILMINGTON, N.C. - A North Carolina federal judge on June 14 entered judgment in favor of an insurer seeking a declaration that no coverage is owed for an auto accident because the defendants did not respond to the insurer's complaint and the insurer offered proof that the alleged facts in its complaint support its claim for relief (Progressive Northern Insurance Co. v. Summit Management Services LLC, et al., No. 12-56, E.D. N.C.; 2013 U.S. Dist. LEXIS 84106).

    Appeals Panel: Court Properly Disallowed Asbestos Claims Under Insolvent Insurer's Policies

    TRENTON, N.J. - A special master and a liquidation court correctly disallowed asbestos-related bodily injury claims made against excess insurance policies issued by an insolvent insurance company, a New Jersey appeals panel affirmed June 17 (In the matter of the liquidation of Integrity Insurance Co., No. A-5273-10T1, N.J. Super., App. Div.; 2013 N.J. Super. Unpub. LEXIS 1476).

    W.Va. High Court Finds No Insurance Under CGL Policy For Construction Defect Claims

    CHARLESTON, W.Va. - A commercial general liability insurance policy does not provide coverage for construction defect claims, the West Virginia Supreme Court of Appeals held June 18, reversing a trial court's ruling granting summary judgment to the insurer (Lisbeth L. Cherrington, et al. v. Erie Insurance Property and Casualty Co., No. 12-0036, W.Va. Sup.; 2013 W.Va. LEXIS 724).

    Judge: Criminal Conduct Exclusion Bars Coverage For Claims Against Agent Insured

    WEST PALM BEACH, Fla. - An insurance professionals errors and omissions policy's criminal conduct exclusion absolves the insurer of its duty to defend its insured against two underlying lawsuits, a Florida federal judge ruled June 18, granting the insurer's motion for partial summary judgment (Certain Interested Underwriters at Lloyd's, London v. AXA Equitable Life Insurance Co., et al., No. 10-62061, S.D. Fla.; 2013 U.S. Dist. LEXIS 85444).

    No Coverage Due; Insured Did Not Comply With Notice Provision, Appeals Panel Says

    NEW ORLEANS - An excess insurer has no duty to provide coverage to an insured for a pollution occurrence because the insured did not comply with the notice requirement in the policy's pollution endorsement, the Fifth Circuit U.S. Court of Appeals said June 18 (Starr Indemnity & Liability Co. v. SGS Petroleum Service Corp., No. 12-20545, 5th Cir.; 2013 U.S. App. LEXIS 12425).

    9th Circuit Affirms Summary Judgment To Insurer, Finds No Duty To Indemnify

    SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on June 18 affirmed a federal court's decision to grant summary judgment in favor of an insurer, finding that mold-related property damage and certain fees were not covered under an excess insurance policy (Barry Shy, et al. v. The Insurance Company of the State of Pennsylvania, No. 11-56887, 9th Cir.; 2013 U.S. App. LEXIS 12379).

    No Coverage For Claims Against School District, Federal Judge Rules

    JACKSON, Miss. - There is no coverage for underlying claims against a Mississippi school district stemming from a teacher's alleged physical and verbal abuse of a handicapped student, a Mississippi federal judge ruled June 13, rejecting the school district's contention that it is entitled to coverage under the policy exception for "mental distress arising out of a wrongful employment practice" (Acadia Insurance Co. v. Hinds County School District, et al., No. 3:12-CV-188 c/w Nos. 3:12-CV-332 and 3:12-CV-731), S.D. Miss.; 2013 U.S. Dist. LEXIS 83240).

    Health Plan's Subrogation Action Is Conflict Preempted, Texas Federal Judge Rules

    DALLAS - The Employee Retirement Income Security Act preempts a health plan's action seeking subrogation from several insurers under the plan's coordination of benefits (COB) provision of benefits it paid to its participants, even though ERISA would not preempt a subrogation action brought by the participants, a federal judge in Texas ruled June 13 (Central States, Southeast and Southwest Areas Health and Welfare Fund v. Health Special Risk, Inc., et al., No. 3:11-CV-2910-D, N.D. Tex.; 2013 U.S. Dist. LEXIS 83400).

    Federal Judge Declines To Dismiss Trade Libel Claim Against Insurance Agent

    LAS VEGAS - A Nevada federal judge on June 13 refused to dismiss a trade libel claim filed by insurers against an insurance agent because the insurers established negligence (Sentry Insurance, et al. v. Estrella Insurance Service Inc., et al., No. 13-169, D. Nev.; 2013 U.S. Dist. LEXIS 83282).

    Judge Finds No Bad Faith In Denial Of Payment For Building Code Upgrades

    PHOENIX - Because a homeowners policy did not provide for payment of new building code upgrades in the repair of a damaged home, an Arizona federal judge on June 13 held that an insurer did not act in bad faith by denying a claim for such costs (Joseph Didyoung, et al. v. Allstate Insurance Co., et al., No. 2:12-cv-00348, D. Ariz.; 2013 U.S. Dist. LEXIS 83271).