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).
RICHMOND, Va. - The Virginia Supreme Court on April 20 held that a trial court correctly interpreted the pollution exclusion endorsements in four insurers' policies to preclude coverage for the loss of about $3 million worth of contaminated infant formula, despite ordering payouts for other kinds of losses (PBM Nutritionals, LLC v. Lexington Insurance Co., et al., No.110669, Va. Sup.; 2012 Va. LEXIS 84).
HOUSTON - Even though a mortgagee is the sole named insured on a force-placed homeowners insurance policy, a Texas appeals panel majority on April 19 found that a policy endorsement "includes provisions directly benefitting" the homeowner, which conferred third-party beneficiary status on him and gave him standing to directly pursue claims against the insurer (Javier Alvarado v. Lexington Insurance Co., No. 01-10-00740-CV, Texas App., 1st Dist.; 2012 Tex. App. LEXIS 3024).
AUSTIN, Texas - The Supreme Court of Texas on April 20 affirmed an appeals court's decision to uphold a judgment that awarded the purchaser of a home nothing on his claim under the Texas Deceptive Trade Practices Consumer Protection Act (DTPA) but reversed a decision in relation to an insurer and remanded the case so that a trial court could consider the insurer's challenges to the factual sufficiency of the evidence that supported the jury's findings (Dr. Erwin Cruz v. Andrews Restoration Inc., d/b/a Protech Services and Rudy Martinez, No. 10-0995, Texas Sup.; 2012 Tex. LEXIS 341).
DENVER - A commercial general liability insurer has no duty to defend an insured against allegations of construction defects, the 10th Circuit U.S. Court of Appeals ruled April 19, finding that the insured failed to establish that the "event" of its unworkmanlike or negligent construction produced any unnatural or unexpected results (Employers' Mutual Casualty Co. v. Bartile Roofs Inc., et al., No. 11-8026, 10th Cir.; 2012 U.S. App. LEXIS 7894).
ST. LOUIS - A Missouri federal judge on April 23 granted summary judgment to an insurer after finding that broad pollution exclusion clauses in its policies protect it from having to defend a lead company in a toxic contamination lawsuit (The Doe Run Resources Corp. v. Lexington Insurance Co., No. 4:10-cv-2897 AGF, E.D. Mo.; 2012 U.S. Dist. LEXIS 56412).
DETROIT - A Michigan federal judge on April 19 denied summary judgment to an insurance agency on breach of agency agreement claims arising out of the termination of two insurance agency franchises because issues of material of fact exist (NBT Associates Inc. v. Allegiance Insurance Agency CCI Inc., et al., No. 10-14108, E.D. Mich.; 2012 U.S. Dist. LEXIS 55041).
PHILADELPHIA - For the second time this month, a Pennsylvania federal judge on April 19 denied a set of insurers' motion for reconsideration of a Feb. 21 ruling that found that fact issues exist as to whether enforcement of asbestos products liability policy exclusions would violate important public policies expressed in or underlying Pennsylvania insurance laws when the policies were sold to the insured (General Refractories Co. v. First State Insurance Co., et al., No. 04-3509, E.D. Pa.; 2012 U.S. Dist. LEXIS 55644).
RICHMOND, Va. - An underlying complaint alleges that damages were the "natural and probable consequence" of an insured's intentional actions, the Virginia Supreme Court said April 20, upholding its finding that a commercial general liability insurer has no duty to defend the insured against underlying claims that excessive carbon dioxide emissions caused global warming that led to the degradation of an Alaska town (The AES Corp. v. Steadfast Insurance Co., No. 100764, Va. Sup.; 2012 Va. LEXIS 81).
LITTLE ROCK, Ark. - Certification was denied April 19 in a putative class action in the U.S. District Court for the Eastern District of Arkansas for plaintiffs seeking to represent neighbors of natural gas pipeline compressors and transmission stations for alleged exposure to noise, methane and hydrogen sulfide contamination (Peggy Ginardi, et al. v. Frontier Gas Services, et al., No. 11-420, E.D. Ark.; 2012 U.S. Dist. LEXIS 54845).
TRENTON, N.J. - Finding in an unpublished opinion that a liquidator's disallowing of $35 million of asbestos-related contingent claims was not arbitrary or capricious, a New Jersey appellate panel on April 18 affirmed a lower court decision upholding the liquidator's ruling (In The Matter Of The Liquidation Of Integrity Insurance Company / The Defendant Class / Robert A. Keasbey Company, No. A-4769-10T1, N.J. Super., App. Div.; 2012 N.J. Super. Unpub. LEXIS 863).
TRENTON, N.J. - Four insurers are not liable for an estate-planning investment entity insured's more than $16 million in alleged losses stemming from the insured's investment in the Bernard L. Madoff Investment Securities (BLMIS) Ponzi scheme, a New Jersey appeals panel affirmed April 20 (Bleznak Black LLC v. Allied World National Assurance Co., et al., No. A-6107-09T2, N.J. Super., App. Div.). See related prior history, 2012 N.J. Super. Unpub. LEXIS 879
HOUSTON - A life insurance provider has sufficiently asserted facts to establish that its agent breached his fiduciary duty, a Texas federal judge ruled April 18, denying the agent's motion to dismiss (American General Life Insurance Co. v. David F. Mickelson, No. 4:11-cv-03421, S.D. Texas; 2012 U.S. Dist. LEXIS 54481).
EL PASO, Texas - Citing the bright-line rule established in Excess Underwriters at Lloyd's, London v. Frank's Casing Crew & Rental Tools Inc. (246 S.W. 3d 42 $(Tex. 2008$)), which disallows reimbursement on theories of equitable unjust enrichment, a divided Texas appellate court on April 18 reversed a grant of summary judgment on behalf of an insured (Warren E&P Inc. v. Gotham Insurance Co., No. 08-10-00198, Tex. App., 8th Dist.; 2012 Tex. App. LEXIS 3006).
HARRISBURG, Pa. - The choice by policyholders to use their insurer's direct repair program for their damaged vehicle did not eliminate the insurer's "statutory and contractual obligations to act in good faith throughout the claim program," a Pennsylvania appeals panel ruled April 17, reversing a trial court's directed verdict in the insurer's favor (Daniel Berg, et al. v. Nationwide Mutual Insurance Co. Inc., No. 12 MDA 2008, Pa. Super.; 2012 PA Super 88; 2012 Pa. Super. LEXIS 169).
WASHINGTON, D.C. - An insurer on April 18 filed a petition for a writ of certiorari in the U.S. Supreme Court to challenge the Louisiana Supreme Court's finding that every member of a class of more than 18,000 insureds was entitled to recover the maximum $5,000 civil penalty based on the insurer's purported failure to comply with its statutory duty to timely initiate loss adjustment of the class members' claims stemming from Hurricanes Katrina and Rita (Louisiana Citizens Property Insurance Corp. v. Geraldine Oubre, et al., No. 11-1252, U.S. Sup.). Subscribers may view the petition available within the full update.
PHILADELPHIA - A Pennsylvania federal judge on April 17 granted in part an insurer's motion to dismiss a claim against it for breach of the duty of good faith and fair dealing and another seeking declaratory relief of indemnity, finding both to be duplicative of, and therefore precluded by, a corresponding breach of contract claim (Nova Financial Holdings Inc., et al. v. BancInsure Inc., No. 2:11-cv-07840, E.D. Pa.; 2012 U.S. Dist. LEXIS 53800).
CENTRAL ISLIP, N.Y. - An insurance policy's cooperation clause is ambiguous, a New York federal judge ruled April 17, further finding that there is a factual dispute over whether an insured hotel's excuses for failing to cooperate with its insurer's demand were reasonable (SCW West LLC, d/b/a Gold Coast Inn v. Westport Insurance Corporation, No. 10-cv-6050 $(ADS$) $(AKT$), E.D. N.Y.; 2012 U.S. Dist. LEXIS 54806).
JACKSON, Miss. - Mississippi Insurance Guaranty Association (MIGA) is not obligated to reimburse Mississippi Workers' Compensation Self-Insurers Guaranty Association (SIGA) under an insolvent insurance policy for SIGA's statutorily obligated payments to an insured because those payments are not a covered claim, a majority of the Mississippi Supreme Court held April 19 (Mississippi Insurance Guaranty Association v. Mississippi Workers' Compensation Individual Self-Insurer Guaranty Association f/k/a Mississippi Workers' Compensation Self-Insurer Guaranty Association, No. 2010-CA-01615-SCT, Miss. Sup.; 2012 Miss. LEXIS 197).
HOUSTON - After determining that a carbon-black manufacturer failed to challenge an independent ground in a trial court's ruling to support a judgment in its favor and failed to raise the issue of limitations in its original brief, a Texas appeals court on April 17 affirmed the trial court's decision to confirm an arbitration award issued in favor of an insurer (Continental Carbon Co. v. National Union Fire Insurance Company of Pittsburgh, No. 14-11-00162-CV, Texas App., 14th Dist.; 2012 Tex. App. LEXIS 2937).
ATLANTA - A federal court erred in not considering the applicability of an exception to the work-product exclusion for work performed by subcontractors, the 11th Circuit U.S. Court of Appeals ruled April 16, reversing a judgment relieving a commercial general liability insurer of its duty to indemnify an arbitration award (Auto-Owners Insurance Co. v. L. Thomas Development Inc., et al., No. 10-13012, 11th Cir.; 2012 U.S. App. LEXIS 7524).
COLUMBUS, Ohio - Granting in part an insured's motion to conduct additional discovery, an Ohio federal judge on April 17 ordered a professional liability insurer to submit for in camera review 12 documents that were previously withheld or redacted as protected by the attorney-client privilege and/or the work product doctrine (Chubb Custom Insurance Co. v. Grange Mutual Casualty Company, et al., No. 2:07-cv-1285, S.D. Ohio, Eastern Div.; 2012 U.S. Dist. LEXIS 54305).