SALT LAKE CITY - Reversing a trial court's grant of summary judgment to an auto insurance provider in an underinsured motorist (UIM) benefits dispute, the Utah Supreme Court on Aug. 28 took the opportunity to "clarify that a bad faith claim need not be resolved on summary judgment whenever an insurance company argues that the claim was fairly debatable," stating that such a disposition is only appropriate when "reasonable minds could not differ as to whether the insurer's conduct measured up to the required standard of care" (Chad Jones v. Farmers Insurance Exchange, No. 20012 UT 52, Utah Sup.; 2012 Utah LEXIS 116).
LOS ANGELES - An insurance policy's Wage and Hour Claim Exclusion endorsement is invalid and unenforceable, and the insurer owes coverage for underlying claims arising under California Labor Code Section 2802, a California federal judge ruled Aug. 29, further finding that triable issues of fact preclude the entry of summary judgment in favor of the insurer on the insured's bad faith claim (Classic Distributing And Beverage Group Inc. v. Travelers Casualty and Surety Company of America, No. CV 11-07075 GAF (RZx), C.D. Calif.). Subscribers may view the order available within the full article.
INDIANAPOLIS - An insurer owes coverage to an insured's landlord for environmental contamination damages because the policies' provision for wrongful entry or invasion is ambiguous and cannot be construed to exclude coverage for the landlord's coverage claims, the Indiana Court of Appeals determined Aug. 28 (FLM LLC et al. v. The Cincinnati Insurance Co. No. 49A02-0902-CV-127, Ind. App.; 2012 Ind. App. LEXIS 411).
SAN FRANCISCO - A total prior work exclusion in a commercial general liability insurance policy precludes coverage for a construction defective action, the Ninth Circuit U.S. Court of Appeals ruled Aug. 30, finding that an insurer has no duty to defend (Ghilotti Bros. Inc. v. American Safety Indemnity Co., No. 10-17231, 9th Cir.; 2012 U.S. App. LEXIS 18432).
BANGOR, Maine - A Maine federal bankruptcy judge on Aug. 28 denied confirmation of a plan of reorganization which sought the use of self-insurance funds and would impose a self-insurance channeling injunction upon the Maine Self-Insurance Guaranty Association (MSIGA), the Maine Superintendent of Insurance and other state agencies (In re: Irving Tanning Co., et al., No. 10-11757, D. Maine Bkcy.; 2012 Bankr. LEXIS 3960).
WASHINGTON, D.C. - Coverage for six underlying lawsuits against a law firm insured is precluded by a professional liability insurance policy's exclusion for claims alleging misappropriation of assets, a District of Columbia federal judge ruled Aug. 28, granting the insurer's motion for summary judgment and awarding it certain sums already paid in underlying defense costs (Navigators Insurance Company v. Baylor & Jackson, et al., No. 12-242 [JEB], D. Colo.; 2012 U.S. Dist. LEXIS 122159).
ANNAPOLIS, Md. - After finding that a trial court erred when it applied the wrong test in determining whether an expert's methodologies and theories in relation to mold exposure and illness are generally accepted in the relevant scientific community, a Maryland appeals court on Aug. 29 reversed a decision holding that the expert's testimony was admissible (Montgomery Mutual Insurance Co. v. Josephine Chesson, et al., No. 2454, September Term, 2009, Md. App.; 2012 Md. App. LEXIS 94).
NEW YORK - A Second Circuit U.S. Court of Appeals panel on Aug. 28 denied a surety bond holder's request for a rehearing of the panel's decision to deny the bond holder's attempt to secure $2.7 million from the surety bond's reinsurer (Callon Petroleum Company v. National Indemnity Company, No. 11-0241, 2nd Cir.). Subscribers may view the order available within the full Mealey's article.
NEW YORK - The Second Circuit U.S. Court of Appeals on Aug. 27 certified two questions to the Connecticut Supreme Court addressing whether consequential damages are available under state law for an insurer's breach of its duty to defend and, if they are, whether the insured may recover damages for harm to reputation and loss of income (Bruce Charles Ryan, et al. v. National Union Fire Insurance Company of Pittsburgh, P.A., et al., Nos. 10-4528-cv(L) and 10-4700-cv(XAP), 2nd Cir.; 2012 U.S. App. LEXIS 18156).
ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on Aug. 27 determined that a district court erred in failing to consider whether the State of Missouri's public policy against the enforcement of mandatory arbitration provisions is sufficient to invalidate a forum selection clause in an insurer's policy (Union Electric Co. d/b/a Ameren Corp. v. Energy Insurance Mutual Ltd., No. 11-1315, 8th Cir.; 2012 U.S. App. LEXIS 18100).
INDIANAPOLIS - Even though an Ohio federal court erred in deeming a plaintiff's motion to remand moot, an Indiana federal judge on Aug. 24 determined that the joinder of a defendant insurer's adjuster was fraudulent and made removal of the breach of contract and bad faith case proper (Tommy Lynn Morris, personal representative of the Estate of Thomas Lynn Morris v. Mid-Century Insurance Co., et al., No. 1:12-cv-00578, S.D. Ind.; 2012 U.S. Dist. LEXIS 120444).
BOSTON - A homeowners insurer has no duty to pay costs to repair faulty exterior staining of a home based upon a gradual deterioration exclusion and a faulty construction or maintenance exclusion, the First Circuit U.S. Court of Appeals affirmed Aug. 24 (Paul A. Gargano and Sheila Gargano v. Vigilant Insurance Co., No. 11-1968, 1st Cir.; 2012 U.S. App. LEXIS 18061).
SAN FRANCISCO - A California federal judge on Aug. 24 refused to dismiss an insurer's complaint regarding its coverage obligations for underlying environmental contamination claims alleged against its insureds because the insurer offered sufficient evidence in support of its allegations (Great American Insurance Co. et al. v. Michael Chang, d/b/a Sunrise Cleaners Inc. et al., No. 12-00833, N.D. Calif.; 2012 U.S. Dist. LEXIS 120703).
PHOENIX - A federal judge in Arizona granted a motion to compel arbitration on Aug. 28 and held that an insurer must arbitrate a reinsurance dispute because the dispute relates to the interpretation of certain reinsurance agreements that contain arbitration clauses (Repwest Insurance Company v. Praetorian Insurance Company, et al., No. 12-cv-00369, D. Ariz.; 2012 U.S. Dist. LEXIS 121897).
EAST ST. LOUIS, Mo. - There are genuine issues of material fact as to whether a doctor told the truth on his professional liability insurance application, an Illinois federal judge ruled Aug. 28, denying the doctor and a medical center's motion for summary judgment in a coverage dispute over a wrongful death lawsuit (First Professionals Insurance Company Inc. v. Oscar F. Florendo, M.D., et al., No.11-cv-197-DRH, S.D. Ill.; 2012 U.S. Dist. LEXIS 121716).
TRENTON, N.J. - New Jersey's pro-rata approach to allocation of coverage among triggered insurers should be applied to claims submitted to an insolvent insurer's liquidator, a New Jersey appeals panel held Aug. 23 (In the matter of the liquidation of Integrity Insurance Co./Mine Safety Appliances Co., No. A-5191-10T1, N.J. Super., App. Div.; 2012 N.J. Super. LEXIS 144).
NEW YORK - A reinsurer told a New York federal court on Aug. 24 that an insurer is attempting to arbitrate a dispute that has already been arbitrated and awarded (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.
NEW ORLEANS - A Louisiana federal judge on Aug. 24 dismissed a lawsuit alleging that an insurer aided and abetted a breach of fiduciary duty after the parties reached a settlement (Versai Management Corporation, et al. v. Progressive Casualty Insurance Company, No. 11-2717, E.D. La.). View related prior history, 2012 U.S. Dist. LEXIS 46757.
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Aug. 24 reversed a lower federal court's ruling against an insurer after the Texas Supreme Court, in response to two certified questions, found that underlying claims against an organ donation charity insured do not trigger the insurer's duty to defend under a medical professional and general liability insurance policy's "personal injury" and "property damage" provisions (Evanston Insurance Company v. Legacy of Life Inc., No. 10-50267, 5th Cir.; 2012 U.S. App. LEXIS 17939).
OKLAHOMA CITY - An Oklahoma federal judge on Aug. 23 ordered insurance producers to return to their former employers all electronic documents the employers allege the producers took and to return the hard copy files that they have also allegedly taken; however, the producers may retain a copy of any of the documents that relate to their customers and a copy of any hard copy files that relate to their customers (North American Insurance Agency Inc., d/b/a Insurica, et al. v. Robert C. Bates, et al., No. 12-544, W.D. Okla.; 2012 U.S. Dist. LEXIS 119440).
NEWARK, N.J. - A federal judge in New Jersey on Aug. 21 denied reconsideration of a decision rescinding an insurance policy issued to a homeowner and granting summary judgment to insurance brokers on claims for reformation and violation of the New Jersey Consumer Fraud Act (CFA) (Ace European Group and Certain Underwriters at Lloyds of London subscribing to policy number AIH-17555 v. Katrina Sappe v. Jerome Davenport and Coe Insurance Agency Inc., No. 08-412, D. N.J.; 2012 U.S. Dist. LEXIS 118696).
HAMMOND, Ind. - Because two homeowners "continuously changed" details about a fire to their home and misrepresented certain facts, an Indiana federal magistrate judge on Aug. 21 held that their insurer "had sufficient reason to believe" they committed arson and deny coverage for the fire, leading the judge to grant summary judgment for the insurer on breach of contract and bad faith claims against it (Maurice Griffin, et al. v. Allstate Property and Casualty, No. 2:10-cv-00387, N.D. Ind.; 2012 U.S. Dist. LEXIS 117844).
TRENTON, N.J. - A New Jersey federal judge on Aug. 22 ordered an insurance agent to remit premiums of $724,466 to a reinsurer; however, the judge made no findings as to whether the parties are bound by certain terms of an agreement and whether the agent would be entitled to profit-sharing payments under the terms (Everest Reinsurance Co. v. International Aerospace Insurance Services Inc., No. 11-5332, D. N.J.; 2012 U.S. Dist. LEXIS 118714).
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Aug. 23 affirmed a lower federal court's $6.8 million final judgment against an insurer in a lawsuit seeking computer fraud coverage for losses arising from a data breach (Retail Ventures Inc., et al. v. National Union Fire Insurance Company of Pittsburgh, Pa., Nos. 10-4576/4608, 6th Cir.; 2012 U.S. App. LEXIS 17850).
ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on Aug. 23 affirmed a lower federal court's finding that an insurer breached its contract but did not vexatiously refuse to pay an insured's claim for its $196,575 loss stemming from a forged wire transfer request (Missouri Bank and Trust Company of Kansas City v. OneBeacon Insurance Company, Nos. 11-3498/11-3529, 8th Cir.; 2012 U.S. App. LEXIS 17863).