Panel: Policy Bars Coverage For Insured's 'Performing Operations,' Missing Property

    LOS ANGELES - A commercial general liability insurance policy excludes coverage for damages arising out of an insured's "performing operations" on property and for missing personal property, a California appeals panel affirmed Oct. 28 (Gerald V. Hollingsworth, et al. v. ProBuilders Specialty Insurance Co., No. B239118, Calif. App., Dist. 2, Div. 8; 2013 Cal. App. Unpub. LEXIS 7729).

    Excess Insurers Must Make Simultaneous Payments, Wisconsin Panel Determines

    MILWAUKEE - Excess insurers must simultaneously pay their indemnity obligations on behalf of an insured named in hundreds of thousands of underlying asbestos suits because a 2007 judgment pertaining to the coverage obligations and the insurance policies at issue clearly support paying the claims simultaneously, the First District Wisconsin Court of Appeals said Oct. 29 (Cleaver-Brooks Inc. v. AIU Insurance Co., et al., No. 2013-AP-203, Wis. App., Dist. 1; 2013 Wisc. App. LEXIS 899).

    7th Circuit Reverses No Coverage Ruling Of $13.5M False Advertising Lawsuit

    CHICAGO - The Seventh Circuit U.S. Court of Appeals on Oct. 29 reversed and remanded a lower federal court's ruling that primary and excess insurers have no duty to cover a $13.5 million jury award in a false advertising lawsuit against its insured but affirmed the lower court's finding that the primary insurer has no duty to defend a related underlying class action lawsuit (National Union Fire Insurance Company of Pittsburgh, PA., et al. v. Mead Johnson & Company LLC, et al., Nos. 12-3478, 13-1526, 7th Cir.; 2013 U.S. App. LEXIS 22056).

    Jury To Decide If Insured's Settlements Were Reasonable, Kansas Federal Judge Says

    WICHITA, Kan. - A Kansas federal judge on Oct. 25 denied an insured's motion for summary judgment in an environmental contamination coverage suit after determining that a jury should decide whether the insured's settlements with third parties were reasonable (Coffeyville Resources Refining & Marketing LLC v. Illinois Union Insurance Co., et al., No. 08-1204, D. Kan.; 2013 U.S. Dist. LEXIS 153905).

    Judge: Insureds Fail To Show Insurer's Direct Liability To Insurance Broker's Theft

    MADISON, Wis. - Insureds failed to establish a basis against insurers for direct or derivative liability with regard to an insurance broker's alleged embezzlement, a Wisconsin federal judge ruled Oct. 25; however, the judge found that the insureds do state a viable cause of action with respect to the broker's acts of fraud accomplished under the guise of apparent agency authority (Kolbe & Kolbe Millwork Company Inc., et al. v. Manson Insurance Agency Inc., et al., No. 12-00879, W.D. Wis.; 2013 U.S. Dist. LEXIS 153391).

    Unsolicited Communications Policy Exclusion Bars Coverage, 6th Circuit Affirms

    CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Oct. 30 held that an insurer has no duty to defend or indemnify its insured under a policy's "unsolicited communications exclusion," further finding that the insured had adequate notice of the exclusion (MDC Acquisition Co., n/k/a WBC Group LLC, et al. v. Traveler's Property Casualty Company of America, No. 12-4340, 6th Cir.).

    Judge: Stay, Bifurcation Not Merited In Professional Liability Coverage Dispute

    WHEELING, W.Va. - Despite the existence of a parallel proceeding in state court, a West Virginia federal judge on Oct. 25 declined to abstain or remand a real estate firm's declaratory and contractual claims against its insurer, finding no indication of "exceptional circumstances" to warrant such an action (Paull Associates Realty LLC v. Lexington Insurance Co., No. 5:13-cv-00080, N.D. W.Va.; 2013 U.S. Dist. LEXIS 153534).

    Judge Strikes Fraudulent Concealment Allegations Against Insurance Brokers

    WASHINGTON, D.C. - A District of Columbia federal judge on Oct. 25 struck a putative class plaintiff's allegations of fraudulent concealment against insurance brokers but refused to strike breach of contract and tortious interference claims (Andrea Cannon, on behalf of herself and all other similarly situated v. Wells Fargo Bank, N.A., et al., No. 12-465, D. D.C.; 2013 U.S. Dist. LEXIS 153447).

    Judge Dismisses Class Action Alleging Scheme Involving Forced-Placed Insurance

    MADISON, Wis. - A Wisconsin federal judge on Oct. 25 dismissed a class action lawsuit alleging that mortgage lenders and insurers fraudulently force-placed hazard insurance policies (Colleen Decambaliza v. QBE Holdings Inc., et al., No. 13-cv-286-bbc, W.D. Wis.; 2013 U.S. Dist. LEXIS 153392).

    Judge Orders Reinsurer, 3 Reinsureds To Pick Umpire In Arbitrations

    NEW YORK - A federal judge in New York on Oct. 25 ordered parties to seven reinsurance agreements to choose an arbitration umpire per the steps outlined in the agreements (National Casualty Company v. Arrowood Indemnity Company, No. 12-cv-08006; Employers Insurance Company of Wausau, et al. v. Arrowood Indemnity Co., No. 12-cv-8005; Nationwide Mutual Insurance Company v. Arrowood Indemnity Company, No. 12-cv-08007, S.D. N.Y.).

    Panel: Equitable Subrogation Doctrine Provides Insurer Claim To Interpleaded Funds

    LOS ANGELES - A California appeals panel on Oct. 28 found that the doctrine of equitable subrogation provides an insurer with a claim to a portion of interpleaded funds, reversing and remanding a lower court's ruling against the insurer (American Equity Insurance Co. v. Browne George Ross, No. B243367, Calif. App., 2nd Dist., Div. 3).

    Florida Panel Finds Jurisdiction Over Michigan Insurer In Bad Faith Case

    TAMPA, Fla. - A Michigan-based insurer's failure to deliver an affidavit in Florida, which ultimately led to an excess judgment against its insured, constituted "a breach based on a fail$(ure$) to perform acts required by $(a$) contract to be performed in" Florida, a Florida appeals panel ruled Oct. 25, finding that the state's long-arm statute conferred jurisdiction over the out-of-state insurer (Linda Betzoldt v. Auto Club Group Insurance Co., No. 2D12-5368, Fla. App., 2nd Dist.; 2013 Fla. App. LEXIS 17055).

    Panel: 'Your Work' Exclusion Bars Coverage For Insured's Alleged Faulty Construction

    SALT LAKE CITY - The "your work" and "your product" exclusions in a commercial general liability insurance policy preclude coverage for alleged damages from defective construction, the Utah Court of Appeals ruled Oct. 24 (America First Credit Union v. Kier Construction Corp., et al., No. 20101036-CA, Utah App.; 2013 Utah App. LEXIS 258).

    Trial Court Erred In Instructing Jury, West Virginia High Court Determines

    CHARLESTON, W.Va.- The West Virginia Supreme Court of Appeals on Oct. 25 reversed and remanded a jury verdict entered in an insured's favor after determining that the trial court erred in instructing the jury on the standard for misrepresentation (AIG Domestic Claims Inc., n/k/a Chartis Claims Inc., et al. v. Hess Oil Co., et al., Nos. 12-0705, 12-0719, W.Va. Sup.; 2013 W. Va. LEXIS 1154).

    Panel: Insolvent Insurer's Liquidator Properly Denied Untimely Legal Fees Claim

    SAN FRANCISCO - A liquidator for an insolvent insurer properly denied as untimely a claim for additional payment for legal services provided to an insured, a California appeals panel affirmed Oct. 25 (Insurance Commissioner of the State of California v. Golden Eagle Insurance Co. and Ron Leaf, No. A136197, Calif. App., 1st Dist., Div. 4; 2013 Cal. App. Unpub. LEXIS 7693).

    Providers Fail To Allege Assignments; Federal Judge Dismisses Claims For Benefits

    NEWARK, N.J. - Health care providers seeking payment for services provided to plan participants failed to allege with specificity the assignments on which they asserted derivative standing under the Employee Retirement Income Security Act, a federal judge in New Jersey ruled Oct. 24 (NJSR Surgical Center, L.L.C., et al. v. Horizon Blue Cross Blue Shield of New Jersey, Inc., et al., No. 12-753, D. N.J.; 2013 U.S. Dist. LEXIS 153630).

    Judge Errs In Finding Partner Stood In Shoes Of Insured For Defects Claims, Panel Rules

    SAN FRANCISCO - A federal judge prematurely determined that a managing partner stood in the shoes of an insured with regard to underlying allegations of construction defects, the Ninth Circuit U.S. Court of Appeals found Oct. 25, reversing and remanding (Century Surety Co. v. Belmont Seattle LLC, et al., No. 13-35039, 9th Cir.; 2013 U.S. App. LEXIS 21857).

    9th Circuit Vacates Asbestos Bankruptcy Reorganization; Says Trust Isn't In Control

    SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Oct. 28 vacated the bankruptcy reorganization plan for a former asbestos insulator, finding that the plan failed to satisfy the requirements of Section 524(g) of the Bankruptcy Code dealing with control by asbestos trusts (In Re: Plant Insulation Co., Fireman's Fund Insurance Company, et al. v. Plant Insulation Company, Nos. 12-17466 and 12-17467, 9th Cir.).

    Panel Upholds Rehabilitation Plan For Segregated Account Of Insolvent Insurer

    MADISON, Wis. - A trial court did not err in confirming the rehabilitation plan of the segregated account of Ambac Assurance Corp., a Wisconsin appeals panel held Oct. 24, also affirming the proposed hearing schedule, the establishment of a segregated account, the issuance of injunctive relief and the refusal to enjoin a settlement agreement between Ambac and a group of financial institutions (In the matter of the rehabilitation of: Segregated Account of Ambac Assurance Corp.; Ted Nickel and Office of the Commissioner of Insurance v. Wells Fargo Bank/trustee of bondholders, et al., Nos. 2010AP1291, 2010AP2022, 2010AP2835 & 2011AP561, Wis. App., Dist. 4; 2013 Wisc. App. LEXIS 895).

    Symptoms Reflect Mental Illness; Plan Properly Capped Benefits, 2nd Circuit Rules

    NEW YORK - A disability plan governed by the Employee Retirement Income Security Act did not act arbitrarily or capriciously in classifying a participant's disability as a mental illness, the Second Circuit U.S. Court of Appeals affirmed Oct. 23 (Robert Veryzer, Ph.D., v. American International Life Assurance Company of New York, No. 13-262, 2nd Cir.; 2013 U.S. App. LEXIS 21475).

    Party To Reinsurance Arbitration Award Says It Is OK With Confirmation

    NEW YORK- A party to an arbitration award told a New York federal court on Oct. 25 that it does not oppose a petition asking the court to confirm the award (Ace Property And Casualty Insurance Company v. Certain Underwriters At Lloyd's, No. 13-cv-06569, S.D. N.Y.).

    Judge Declines To Dismiss Tortious Interference Claims Against Insurance Producers

    TAMPA, Fla. - A Florida federal judge on Oct. 23 refused to dismiss an insurance producer's claims for tortious interference with advantageous business relationship and negligent supervision against two other insurance producers based on their alleged issuance of fraudulent certificates of insurance (Segregated Portfolio 164 Inc. v. IS Agency Inc. and Eric Stein, No. 13-694, M.D. Fla.; 2013 U.S. Dist. LEXIS 152236).

    Sale Of Unrepaired Property Did Not Extinguish Insurance Claims, 7th Circuit Says

    CHICAGO - The sale of a hurricane-damaged apartment complex "in its unrepaired state did not extinguish $(the policyholder's$) right to recover on $(its$) mature claim," a Seventh Circuit U.S. Court of Appeals panel ruled Oct. 25, reviving the policyholder's breach of contract and bad faith claims against its excess insurer (Edgewood Manor Apartment Homes LLC, et al. v. RSUI Indemnity Co., No. 12-1480 and 12-1508, 7th Cir.; 2013 U.S. App. LEXIS 21939).

    Employee's Dishonest Acts Over 5 Years Constituted 1 Occurrence, Panel Affirms

    TRENTON, N.J. - A New Jersey appeals panel on Oct. 25 affirmed a lower court's finding that an insured's former employee's alleged acts of theft, embezzlement and fraud over a period of five years constituted one occurrence under a businessowners insurance policy and that, therefore, the insured's recoverable loss is capped at $10,000 (North Fullerton Surgery Center v. Franklin Mutual Insurance Co., No. A-5985-11T4, N.J. Super., App. Div.; 2013 N.J. Super. Unpub. LEXIS 2581).

    Federal Magistrate: Narrowed Discovery Request Remains 'Overly Burdensome'

    KANSAS CITY, Kan. - A Kansas federal magistrate on Oct. 24 granted in part and denied in part an insured's receiver motion to compel an insurer to produce certain documents in a directors and officers liability coverage dispute (BancInsure Inc. v. Carl L. McCaffree, et al., No. 12-2110-KHV, D. Kan.; 2013 U.S. Dist. LEXIS 152804).