LexisNexis® Legal Newsroom
    Mealey's Insurance - Judge Deems Insurer's Settlement Of Disability Claim To Be In Good Faith

    LOS ANGELES - Considering the relevant factors under California law and case law, a California federal judge on May 19 determined that an insurer's offer to settle a disability benefits dispute with its policyholder for $300,000 was made in good faith, granting approval per the insurer's unopposed motion (Daniel Schechter v. Crown Life Insurance Co., et al., No. 2:13-cv-05596, C.D. Calif.; 2014 U.S. Dist. LEXIS 69705).

    Mealey's Insurance - Government: ACA Plainly Allows For Subsidies Through Federal Exchange

    ODMULGEE, Okla. - When read as a whole, the plain language of the Patient Protection and Affordable Care Act (ACA) clearly permits subsidies for individuals enrolled through federal exchanges, the federal government told a federal judge May 19 (State of Oklahoma, ex rel. Scott Pruitt v. Kathleen Sebelius, et al., No. 11-30, E.D. Okla.; 2013 U.S. Dist. LEXIS 113232).

    Mealey's Insurance - 9th Circuit Overturns Summary Judgment For Insurer In Flood Coverage Case

    PASADENA, Calif. - A trial court erred in excluding testimony from two plaintiff experts in an insurance coverage and bad faith dispute, finding that a jury should resolve contested but otherwise admissible opinions, a Ninth Circuit U.S. Court of Appeals panel held May 19 (Pyramid Technologies, Inc., et al. v. Hartford Casualty Insurance Co., No. 11-56304, 9th Cir.; 2014 U.S. App. LEXIS 9210).

    Mealey's Insurance - Magistrate Rules On Document Protocol In Coverage Dispute

    LAS VEGAS - Progressive Casualty Insurance Co. must produce certain documents but may apply "privilege filters" to and withhold certain documents, a federal magistrate judge in Nevada ruled May 20 in a suit in which Progressive seeks a declaration that its directors and officers (D&I) policy does not provide coverage for suits the Federal Deposit Insurance Co (FDIC-R)., as the receiver for failed banks, has brought against the former directors and officers of those banks (Progressive Casualty Insurance Co. v. Jackie K. Delaney, et al., No. 11-0678, D. Nev.; 2014 U.S. Dist. LEXIS 69166).

    Mealey's Insurance - Nevada Dumps ACA Insurance Exchange, Will Rely On Federal Exchange

    CARSON CITY, Nev. - Citing "extensive and reoccurring errors" with Nevada's "underperforming" Patient Protection and Affordable Care Act (ACA) health insurance exchange, the board governing the exchange abandoned it on May 20 in favor of the federal one, sources told Mealey Publications.

    Mealey's Insurance - Judge: No Duty To Defend Construction Defects Claim Due To Canceled Policy

    SAN FRANCISCO - Finding evidence that an insurer properly cancelled a contractor's commercial general liability policy and provided notice thereof, a California federal judge on May 19 held that the insurer had no duty to defend or indemnify the insured in an underlying construction defects lawsuit (JMA Investments v. Mt. Hawley Insurance Co., et al., No. 3:13-cv-04581, N.D. Calif.; 2014 U.S. Dist. LEXIS 68549).

    Mealey's Insurance - Oregon Federal Judge Rejects Insurer's Opposition To Substitution Of Counsel

    PORTLAND, Ore. - Because an insurer offered no new evidence supporting its argument that a law firm should be disqualified from representing its insured in an environmental contamination coverage suit, an Oregon federal judge on May 16 denied the insurer's supplemental opposition to the insured's motion to substitute counsel (Evraz Inc., N.A. v. Riddell Williams P.S., et al., No. 08-447, D. Ore.; 2014 U.S. Dist. LEXIS 68437).

    Mealey's Insurance - Securities Holders' Claims Barred By 2 Policy Provisions, Federal Judge Rules

    PHOENIX - Security holders' claims against an insured are excluded from directors, officers and corporate liability insurance coverage because they were brought with the assistance of, active participation of and intervention of an insured under the policy, an Arizona federal judge ruled May 20, granting the insurer's motion to dismiss a breach of contract and bad faith lawsuit (AMERCO v. National Union Fire Insurance Company of Pittsburgh PA, No. 13-2588-PHX-PGR, D. Ariz.; 2014 U.S. Dist. LEXIS 69066).

    Mealey's Insurance - Judge Says Indemnity And Defense Expenses Can Be Billed To Reinsurer

    MADISON, Wis. - A federal judge in Wisconsin found May 16 that certain reinsurance agreements allow a reinsured to combine indemnity and defense expenses in its billings to a reinsurer (Employers Insurance Company of Wausau v. R&Q Reinsurance Company, No. 13-cv-00709, W.D. Wis.; 2014 U.S. Dist. LEXIS 67473).

    Mealey's Insurance - Insurance Agent's Breach Of Contract Claim Fails, Ohio Federal Judge Says

    COLUMBUS, Ohio - An insurance agent failed to adequately allege lack of consideration, economic duress or fraudulent inducement to add an amendment in a replacement agency executive agreement (RAE), an Ohio federal judge ruled May 20, granting judgment on the pleadings to an insurer with regards to breach of contract and fraudulent inducement claims (David Varnadore v. Nationwide Mutual Insurance Co., No. 13-827, S.D. Ohio; 2014 U.S. Dist. LEXIS 68990).

    Mealey's Insurance - Construction Defect Claim Did Not Constitute Property Damage Claim, Panel Rules

    LOS ANGELES - Finding that a property owner's claim against a subcontractor did not include allegations of property damage, a California appeals panel on May 16 held that a commercial general liability (CGL) insurer did not have any duty to defend the subcontractor, affirming that the insurer did not breach its contract or act in bad faith (Regional Steel Corp. v. Liberty Surplus Insurance Corp., No. B245961, Calif. App., 2nd Dist.; 2014 Cal. App. Unpub. LEXIS 3496).

    Mealey's Insurance - Court Erred By Excluding Insured's Expert Witnesses, Majority Says In Reversal

    PASADENA, Calif. - A majority of the Ninth Circuit U.S. Court of Appeals on May 19 found that a lower federal court abused its discretion by not allowing a jury to resolve contested but otherwise admissible expert testimony in a flood coverage dispute, reversing and remanding for a new trial (Pyramid Technologies Inc., et al. v. Hartford Casualty Insurance Co., No. 11-56304, 9th Cir.; 2014 U.S. App. LEXIS 9210).

    Mealey's Insurance - 2nd Circuit Panel: Pollution Exclusion Clauses Apply In Insulation Fume Suit

    NEW YORK - A unanimous Second Circuit U.S. Court of Appeals panel affirmed summary judgment on May 19 for insurance companies sued by a polyurethane foam insulation supplier for property damage and personal injuries; the panel concluded that the judge below did not err when he concluded that pollution exclusion clauses in the subject policies relieve the insurers of duties to defend and to indemnify in the underlying class action (Lapolla Industries Inc. v. Aspen Specialty Insurance Co., et al., No. 13-4436, 2nd Cir.; 2014 U.S. App. LEXIS 4436).

    Mealey's Insurance - 5th Circuit Denies BP's Request For En Banc Hearing On Settlement Payments

    NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on May 19 denied BP Exploration & Production Inc.'s request for an en banc hearing over a March 3 ruling in which a divided panel allowed payments under the $9.2 billion settlement agreement the company reached with business and economic loss plaintiffs to continue without the submission of causation evidence (In re Deepwater Horizon, Nos. 13-30315, 13-30329, 13-31220, 13-31316, 5th Cir.).

    Mealey's Insurance - Insurer's Failure To Settle Dental Patients' Claims May Be Bad Faith, Judge Finds

    SEATTLE - A group of plaintiffs that had sued their dentist for malpractice have plausibly alleged that the dentist's professional liability insurer acted in bad faith by not pursing a global settlement with them and risking an excess judgment against its insured, a Washington federal judge ruled May 16, partly denying the insurer's motion to dismiss (Kathryn Cox, et al. v. Continental Casualty Co., No. 2:13-cv-02288, W.D. Wash.; 2014 U.S. Dist. LEXIS 68081).

    Mealey's Insurance - Panel: Jurisdiction In Employment Practices Dispute Was Improperly Established

    ATLANTA - The 11th Circuit U.S. Court of Appeals on May 15 found that a federal district court's subject matter jurisdiction in an employment practices liability insurance dispute was not properly established, vacating and remanding the lawsuit to establish whether the parties would be prejudiced by dismissing one of the plaintiffs and to determine another plaintiff's citizenship (Payroll Management Inc., et al. v. Lexington Insurance Co., No. 13-14726, 11th Cir.; 2014 U.S. App. LEXIS 9025).

    Mealey's Insurance - Panel Upholds Revocation Of Insurance-Agency License, Fines Imposed

    MINNEAPOLIS - A Minnesota appeals court on May 19 affirmed the retroactive revocation of a company's insurance-agency and insurance-producer licenses and the fines imposed by the Minnesota Department of Commerce commissioner (In the Matter of the Resident Agency License of Northwest Title Agency Inc.; the Resident Insurance Producer's License of Wayne B. Holstad; the Notary Commission of Wayne B. Holstad; and Northwest Abstract Co., No. A13-1643, Minn. App.; 2014 Minn. App. Unpub. LEXIS 488).

    Mealey's Insurance - Oregon Federal Judge Says Proposed Judgment Should Be Consistent With Prior Rulings

    PORTLAND, Ore. - An Oregon federal judge on May 16 granted a motion for a proposed form of judgment filed by two insurers but ruled that the proposed form of judgment should be revised to be consistent with prior rulings regarding the allocation of the insured's defense costs in an environmental contamination suit (Northwest Pipe Co. f/k/a Northwest Pipe and Casing Co. v. RLI Insurance Company of Wausau, No. 09-1126, D. Ore.; 2014 U.S. Dist. LEXIS 67422).

    Mealey's Insurance - California Federal Judge Denies Motion For Reconsideration In Contamination Suit

    SACRAMENTO, Calif. - A California federal judge on May 15 denied an insured's motion for reconsideration in an environmental contamination coverage dispute after determining that the court did not err in interpreting the Federal Rules of Evidence and did not err in interpreting two applicable policy provisions (Lennar Mare Island LLC v. Steadfast Insurance Co. et al., No. 12-2182, E.D. Calif.; 2014 U.S. Dist. LEXIS 67163).

    Mealey's Insurance - Insurer Is Not Estopped From Asserting Coverage Defenses, 11th Circuit Says

    ATLANTA - An insurer adequately reserved its rights under a commercial general liability policy and is not estopped from asserting coverage defenses under the CGL policy or an umbrella policy for an underlying lawsuit seeking damages for the repair or replacement of an energy system, the 11th Circuit U.S. Court of Appeals affirmed May 16 (Wellons Inc. v. Lexington Insurance Co., No. 13-11512, 11th Cir.; 2014 U.S. App. LEXIS 9091).

    Mealey's Insurance - Final HHS Rule Imposes $250,000 Fine For False Info In ACA Exchanges

    WASHINGTON, D.C. - Individuals who knowingly provide false information to a Patient Protection and Affordable Care Act (ACA) health care exchange may be subject to $250,000 in civil penalties, according to a U.S. Department of Health and Human Services (HHS) final rule released May 16.

    Mealey's Insurance - High Court Denies Review Of Fiduciary Duty Regarding Retained Asset Accounts

    WASHINGTON, D.C. - The U.S. Supreme Court on May 19 denied review of a Third Circuit U.S. Court of Appeals ruling that a life insurance company did not breach its fiduciary duties under the Employee Retirement Income Security Act when it chose to pay the beneficiary with a retained asset account and then invested the retained assets for its own profit (Connie J. Edmonson v. Lincoln National Life Insurance Company, No. 13-934, U.S. Sup.).

    Mealey's Insurance - Judge Dismisses Insurer's Equitable Reimbursement Claim In Defects Dispute

    FRESNO, Calif. - Insurers have sufficiently asserted claims for breach of contract and declaratory relief against an insured with regard to its alleged breach of a cooperation with the insured's defense in an underlying construction defects case, a California federal judge ruled May 15; however, the judge dismissed the insurer's equitable reimbursement claim (Travelers Indemnity Company of Connecticut, et al. v. Centex Homes, et al., No. 14-217, E.D. Calif.; 2014 U.S. Dist. LEXIS 67197).

    Mealey's Insurance - Judge Dismissed Breach, Bad Faith Claims As Moot, Unsupported By Evidence

    LAS VEGAS - An insured failed to offer admissible evidence that her insurer acted recklessly or unreasonably by offering an underinsured motorist (UIM) settlement that was less than her policy limit demand, a Nevada federal judge held May 15, granting summary judgment in the insurer's favor (Lucia Sloan v. Country Preferred Insurance Co., No. 2:12-cv-01085, D. Nev.; 2014 U.S. Dist. LEXIS 67842).

    Mealey's Insurance - Insured Failed To Prove Loss Was Accidental, N.Y. Appeals Court Determines

    ALBANY, N.Y. - A trial court erred in granting an insured's motion for summary judgment in a water damage coverage dispute because the insured failed to prove that the loss was caused by "the accidental leakage, overflow or discharge of liquids or steam from a plumbing system," a covered cause of loss under the policy, the Third Department New York Supreme Court Appellate Division said May 15 (Michael J. Pichel v. Dryden Mutual Insurance Co., No. 517551, N.Y. Sup. App. Div., 3rd Dept.; 2014 N.Y. App. Div. LEXIS 3515).