SACRAMENTO, Calif. - An insurer had no duty to name its insured as a co-plaintiff in seeking recovery from the manufacturer of a defective chair massager, a California appeals panel affirmed April 30, further finding that the insured's negligence claim against the insurer constituted a nonviable cause of action (James Sedlar v. USAA Casualty Insurance Company Inc., No. C066089, Calif. App., 3rd Dist.; 2012 Cal. App. Unpub. LEXIS 3226).
HONOLULU - Finding that construction defects do not amount to an occurrence under certain insurance policies, a federal judge in Hawaii on April 26 dismissed breach of contract and a number of other counterclaims brought by a contractor against its insurers (Illinois National Insurance Company, et al. v. Nordic PCL Construction Inc., f/k/a Nordic Construction, Ltd., No. 11-00515 SOM/KSC, D. Hawaii; 2012 U.S. Dist. LEXIS 58464).
SPOKANE, Wash. - A Washington federal judge on April 27 consolidated two related cases stemming from insurance coverage for allegedly defective pipe, ordered a reasonableness hearing into an underlying settlement and transferred the cases to the U.S. District Court for the Middle District of Louisiana (The Shaw Group Inc., et al. v. Zurich American Insurance Company, No. CV-11-279, E.D. Wash; 2012 U.S. Dist. LEXIS 59327).
NEW YORK - A federal judge in New York on April 30 upheld a magistrate judge's findings and ordered an insurer to produce documents related to certain asbestos loss reserves (Granite State Insurance Company v. Clearwater Insurance Company, No. 09-cv-10607, S.D. N.Y.).
OAKLAND, Calif. - A commercial general liability insurance company breached its duty to defend allegations against insureds regarding construction defects in their work in a home, a California federal judge found April 26, awarding damages of $301,334 plus interest to the insureds (Swi-Co Construction Inc., et al. v. AMCO Insurance Co., et al., No. 10-3122, N.D. Calif.; 2012 U.S. Dist. LEXIS 59391).
PHILADELPHIA - A Pennsylvania federal judge on April 26 denied two excess insurers' motion to reconsider his Jan. 27 ruling refusing to allow the insurers to reform their policies to add an exclusion for asbestos-related claims (General Refractories Company v. First State Insurance Co., et al., No. 04-3509, E.D. Pa.; 2012 U.S. Dist. LEXIS 59171).
FORT WORTH, Texas - An insurer's consent was not required for the modification of a quota-share and reinsurance agreement and general agency agreement entered into by the insurer, its reinsurer and an insurance agent, a Texas appeals panel ruled April 26, affirming summary judgment to the agent on its fraud claim (Arch Reinsurance Co. v. Underwriters Service Agency Inc., No. 02-10-00365, Texas App., 2nd Dist.; 2012 Tex. App. LEXIS 3304).
BOSTON - Damages arising from allegations of wrongdoing as well as actual wrongdoing are within an excess insurance policy's coverage, a Massachusetts appeals panel ruled April 30, further finding that the underlying defense and settlement costs incurred by an insured are potentially attributable in some proportion to the covered claims (Allmerica Financial Corporation & others v. Certain Underwriters at Lloyd's, London, No. 11-P-193, Mass. App.). Subscribers may view the opinion available within the full update.
INDIANAPOLIS - Even though a home builder was an additional insured under a plumbing contractor's general commercial liability (GCL) policy, an Indiana federal magistrate judge on April 26 found that its claims related to the decontamination of a home that was exposed to raw sewage were precluded under both the policy's fungi and bacterial exclusion and voluntary-payments exclusion (West Bend Mutual Insurance Co. v. Willmez Plumbing Inc., et al., No. 1:09-cv-00832, S.D. Ind.; 2012 U.S. Dist. LEXIS 58395).
HANNIBAL, Mo. - A consent judgment obtained by homeowners regarding fraudulent and negligent misrepresentation claims against insureds as to the sale of a home does not constitute damages for "property damage," a Missouri federal judge ruled April 26 (Craig and Carroll Payne v. Grinnell Mutual Reinsurance Co., No. 11-31, E.D. Mo.; 2012 U.S. Dist. LEXIS 58490).
LANSING, Mich. - Finding that certain claims material sought by the City of Warren, Mich., is privileged or protected by the work product doctrine, a Michigan federal magistrate judge on April 26 denied in part the city's motion to compel discovery from insurers in a coverage dispute over damages arising from the flooding of raw sewage into residents' homes (United States Fire Insurance Co. v. The City of Warren, No. 10-13128, E.D. Mich.; 2012 U.S. Dist. LEXIS 58353).
SANTA ANA, Calif. - Comparable sales upon which an insured relied did not support its valuation opinion regarding an insurance broker's alleged failure to secure insurance for an office building that was later damaged by arson, a California appeals panel held April 25, affirming that the broker is entitled to a new trial on damages (Main Street-Santa Ana LLC v. Donald Kappauf, No. G044446, Calif. App., 4th Dist., Div. 3; 2012 Cal. App. Unpub. LEXIS 3115).
ATLANTA - In an April 25 per curiam ruling, an 11th Circuit U.S. Court of Appeals panel held that Georgia law "does not recognize an independent cause of action for breach of good faith and fair dealing," affirming the dismissal of a policyholder's breach of contract claim against its employers liability insurer based on an allegation of bad faith (Cone Financial Group Inc. v. Employers Insurance Company of Wausau, No. 11-14078, 11th Cir.; 2012 U.S. App. LEXIS 8270).
PORTLAND, Ore. - An insurance policy's professional service exclusion does not preclude a general contractor insured's actions from coverage, an Oregon federal judge found April 24, further finding that there is a genuine issue of material fact as to whether the insurer has a duty to indemnify the insured against an underlying lawsuit arising from alleged construction defects (State Farm and Casualty Co. v. Lorrick Pacific, LLC, et al., No. 03:11-CV-834-HZ, D. Ore.; 2012 U.S. Dist. LEXIS 57922).
SAN DIEGO - A federal judge in California on April 25 granted summary judgment to an insurance company regarding its duty to defend a construction defects action, finding that the construction company suing the insurer is not a party to the policies (McMillin Construction Services L.P. v. Arch Specialty Insurance Co., et al., No. 10-2592, S.D. Calif.).
JACKSON, Miss. - Insureds failed to prove that they had suffered any damage proximately caused by the acts of an insurance agency and an insurance agent regarding damages from Hurricane Katrina, a Mississippi appeals panel ruled April 24, affirming a directed verdict in favor of the agency and its agent (Anthony Trapani, et al. v. David Treutel and Treutel Insurance Agency Inc., No. 2011-CA-00092-COA, Miss. App.; 2012 Miss. App. LEXIS 231).
BROOKLYN, N.Y. - A commercial general liability insurance policy does not cover the cost to repair defective pipes because the damages claimed arise from injury caused by an insured's own work, a New York federal judge concluded April 23 (Franco Belli Plumbing & Heating and Sons Inc. v. Liberty Mutual Insurance Co., No. 12-128, E.D. N.Y.; 2012 U.S. Dist. LEXIS 56761).
HOUSTON - Insureds' losses did not result "directly" from their employees' misconduct but were the result of the insureds' contractual liability to third-party financial institutions, a Texas federal judge ruled April 23, finding that a commercial crime insurance policy does not provide coverage for the losses (BJ Services S.R.L., et al. v. Great American Insurance Co. No. H-11-2448, S.D. Texas). Subscribers may view the memorandum and order available within the full update.
SAN ANTONIO - There is a material issue of fact regarding which hailstorm caused property damage to two Austin, Texas, apartment complexes owned by an insured, a Texas appeals panel held April 25, reversing and remanding a trial court's final judgment as to the insured's breach of contract claims against its primary and excess insurers (United States Fire Insurance Company v. The Lynd Company, No. 04-11-00347-CV, Texas App., 4th Dist.; 2012 Tex. App. LEXIS 3206).
DES MOINES, Iowa - A federal judge in Iowa on April 24 denied class certification for former insurance agents in a potential putative class action alleging that an insurance company wrongly cut renewal commissions because the agents sought a class with an overly broad definition and one that did not meet the numerosity requirement (Bruce Copp, et al. v. American Enterprises Services Co. and American Republic Insurance Co., No. 11-189, S.D. Iowa).
NEW ORLEANS - A commercial general liability insurance company had a duty to defend allegations of diminution in value attributable to "property damage" against its insureds, the Fifth Circuit U.S. Court of Appeals affirmed on April 20 (Mid-Continent Casualty Co. v. Academy Development Inc., et al., No. 11-20219, 5th Cir.; 2012 U.S. App. LEXIS 8056).
CONCORD, N.H. - Whether an insured's original construction work or his subsequent repair work caused water damage is a genuine issue of fact material to whether a commercial general liability insurance policy provides coverage, the New Hampshire Supreme Court said April 20, reversing and remanding a judge's entry of summary judgment (Marc Brown and Laurie Brown v. Concord Group Insurance Co., No. 2011-385, N.H. Sup.; 2012 N.H. LEXIS 56).
NEW HAVEN, Conn. - Stating that the court was exercising its discretion to entertain an insurer's declaratory judgment action to determine its obligations and duties in an underlying negligence case, a Connecticut federal judge on April 20 granted the insurer's motion to dismiss bad faith and declaratory counterclaims brought by the plaintiffs in the underlying matter as redundant and not plausibly stated (Allstate Insurance Co. v. Valdecir R. Martinez, et al., No. 3:11-cv-00574, D. Conn.; 2012 U.S. Dist. LEXIS 55752).
TUCSON, Ariz. - An Arizona federal judge on April 23 rejected a couple's attempt to remand their breach of contract and bad faith complaint against their insurer to state court, holding that it did not qualify as a "direct action" under U.S. Code Title 28, Section 1332(c)(1) (Douglas and Juanita Camps v. State Farm Mutual Automobile Insurance Co., No. 4:11-cv-00662, D. Ariz.; 2012 U.S. Dist. LEXIS 56302).
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on April 23 found that a lower court erred in submitting an insured's negligent misrepresentation claim to a jury, reversing a $212,900 compensatory damages award against the insurer in a coverage dispute arising from Hurricane Katrina damage (James P. Grissom v. Liberty Mutual Fire Insurance Company, No. 11-60260, 5th Cir.; 2012 U.S. App. LEXIS 8164).