WASHINGTON, D.C. - The U.S. Department of Justice (DOJ) announced June 18 that Covenant Hospice Inc., a nonprofit hospice care provider, agreed to pay $10.1 million for overcharging Medicare, Medicaid and Tricare for hospice services.
NEW YORK - A New York appeals panel on June 18 held that a financial institution bond's requirement that a loss be attributable to a defrauder acting solely in his or her capacity as an investment adviser was not satisfied, reversing and remanding a lower court's finding that an insurer has a duty to insure a loss arising from Bernard Madoff fictitious reporting of the value of an investment management company's assets (Jacobson Family Investments Inc., et al. v National Union Fire Insurance Company of Pittsburgh, PA, et al., No. 14802, 601325/10, N.Y. Sup., App. Div., 1st Dept.; 2015 N.Y. App. Div. LEXIS 5175).
ATLANTA - The 11th Circuit U.S. Court of Appeals on June 22 affirmed a lower federal court's finding that there is no directors and officers liability insurance coverage for beneficiaries' claims against their family-owned corporation and two family members who served as directors or officers of the corporation and as trustees of the family trust (The Langdale Co. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 14-12723, 11th Cir.; 2015 U.S. App. LEXIS 10419).
SAN FRANCISCO - An insured's alleged negligence is barred by a subsidence exclusion because the negligence arises from its "operations," which include maintenance of its landscape, construction activities on its property and its irrigation and drainage systems, a California federal judge ruled June 18 (Philadelphia Indemnity Insurance Co. v. Lakeside Heights Homeowners Association, No. 14-04450, N.D. Calif.; 2015 U.S. Dist. LEXIS 80033).
ST. LOUIS - A federal judge in Missouri on June 18 ruled that State Auto Property & Casualty Co. was entitled to an award of attorney fees and $40,000 in advances it paid to a couple who allegedly submitted a fraudulent fire loss claim, ruling that the defendants' misrepresentations constituted a special circumstance that warranted an award of attorney fees (State Auto Property and Casualty Company v. Genny Larkin, et al., No. 12CV1853, E.D. Mo.; 2015 U.S. Dist. LEXIS 79540).
SAN FRANCISCO - All property damage arising from an insured's alleged failure to disclose discoloration in its roofing tiles claimed in a class action resulted from misrepresentations, which are not accidental occurrences, a California appeals panel affirmed June 18 (Monier Inc. v. American Home Assurance Co. and Travelers Indemnity Co., No. A138976, Calif. App., 1st Dist., Div. 3; 2015 Cal. App. Unpub. LEXIS 4361).
CAMDEN, N.J. - An insured failed to establish its breach of contract and bad faith claims against its insurer for denying property damage sustained during Superstorm Sandy based upon a policy's water exclusion, a New Jersey federal magistrate judge found June 18, granting summary judgment to the insurer (151 East Leaming Avenue Condo Association v. QBE Specialty Insurance Co., No. 14-175, D. N.J.; 2015 U.S. Dist. LEXIS 79002).
SAN FRANCISCO - A general contractor was not an additional insured to a subcontractor's insurance policy, a California federal judge ruled June 17, finding that the contractor's insurer has no right to seek reimbursement of defense fees and costs arising from underlying construction defect cases against the contractor and subcontractor (Navigators Specialty Insurance Co. v. St. Paul Surplus Lines Insurance Co., et al., No. 13-03499, N.D. Calif.; 2015 U.S. Dist. LEXIS 79338).
PORTLAND, Ore. - An insurer must pay a homeowner $84,379.23 for costs arising from an underlying arbitration award issued against an insured contractor in a construction defects case that are not excluded by the "your work" exclusion, an Oregon federal judge ruled June 16 (American Hallmark Insurance Company of Texas v. Journey Built Homes LLC and Jennifer Werner, No. 12-01020, D. Ore.; 2015 U.S. Dist. LEXIS 78882).
OLYMPIA, Wash. - "Collapse" in an insurance policy means the substantial impairment of structural integrity of a building or part of a building that renders such building or part of a building unfit for its function or unsafe in a manner that is more than mere settling, cracking, shrinkage, bulging or expansion, the Washington Supreme Court ruled June 18 (Queen Anne Park Homeowners Association v. State Farm Fire and Casualty Co., No. 90651-3, Wash Sup.; 2015 Wash. LEXIS 695).
NEW ORLEANS - A federal district court did not err in granting summary judgment in an insurance bad faith lawsuit because an insured failed to show that his insurer lacked a reasonable basis to deny his claim or pay the policy limits, a Fifth Circuit U.S. Court of Appeals panel ruled on June 17 (Daniel F. Dey v. State Farm Mutual Automobile Insurance Co., No. 14-60300, 5th Cir.; 2015 U.S. App. LEXIS 10188).
WEST PALM BEACH, Fla. - A Florida appeals panel on June 17 reversed and remanded a lower court's ruling as to taxable court costs in a coverage dispute over damages sustained to the insured's condominium by leaking fluids from a decomposing body (Judy Rodrigo v. State Farm Florida Ins. Co., No. 4D13-3393, Fla. App., 4th Dist.; 2015 Fla. App. LEXIS 9263).
MIAMI - A Florida appeals panel on June 17 found that a lower court erred when it compelled appraisal of an insured's supplemental Hurricane Wilma claim because the insured did not comply with his post-loss obligations under the policy, reversing and remanding (State Farm Florida Insurance Co. v. Alfredo Hernandez, No. 3D13-2263, Fla. App., 3rd Dist.; 2015 Fla. App. LEXIS 9215).
CONCORD, N.H. - A federal judge in New Hampshire on June 16 remanded a suit brought by the liquidator of an insolvent insurer against two reinsurers over more than $1.4 million in asbestos and environmental claim reinsurance billings (N.H. Insurance Department, Commissioner v. British Aviation Insurance Company Limited, et al., No. 15-cv-00127, D. N.H.).
HARRISBURG, Pa. - Amendment of an insurance breach of contract and bad faith complaint against an insurer is warranted, a federal judge in Pennsylvania ruled June 16, holding that the amendments to the complaint are not futile (Guy F. Militello v. Allstate Property and Casualty Insurance Co., No. 14-0240, M.D. Pa.; 2015 U.S. Dist. LEXIS 77481).
TAMPA, Fla. - A testing exclusion precludes coverage for an insured's alleged negligence in the performance of a roof test on a condominium building, a Florida federal judge ruled June 17 (Driggers Engineering Services Inc. v. CNA Financial Corp. and Valley Forge Insurance Co., No. 14-3155, M.D. Fla.; 2015 U.S. Dist. LEXIS 78559).
ABINGDON, Va. - A manufacturer's insured two-year delay in notifying its employment practices liability insurer of an underlying employment discrimination claim was a material breach of the insurance policy, a Virginia federal judge ruled June 12, granting the insurer's motion for summary judgment (E Dillon & Company v. Travelers Casualty & Surety Company of America, No. 14-00070, W.D. Va.; 2015 U.S. Dist. LEXIS 76295).
WASHINGTON, D.C. - The U.S. Department of Justice announced June 16 that a Florida-based skilled nursing facility, its former president and executive director and its subsidiaries have agreed to pay $17 million to resolve allegations that it violated the False Claims Act (FCA) and Anti-Kickback Statute by improperly paying doctors for their referrals of Medicare patients to the defendants' facilities (United States of America, ex. rel. Stephen M. Beaujon v. Hebrew Homes Health Network Inc., et al., No. 12-cv-20951, S.D. Fla.).
CHICAGO - An Illinois federal judge on June 16 granted an insurer's motion for summary judgment after finding that a fungi and bacteria exclusion clearly precludes coverage for an underlying suit filed by residents of an insured apartment complex and alleging injuries as a result of exposure to mold and other toxic airborne pathogens (Tower Insurance Company of New York v. Pima Lansing LLC et al., No. 14-02271, N.D. Ill.; 2015 U.S. Dist. LEXIS 77506).
CORPUS CHRISTI, Texas - A Texas federal judge on June 16 remanded an insured's coverage dispute regarding an insurer's alleged unreasonable delay of payment for covered losses caused by wind and hailstorm damage (W. Ohio St. Condo Association d/b/a Diamond G. Convenience Store v. Allstate Insurance Co., et al., No. 15-192, S.D. Texas; 2015 U.S. Dist. LEXIS 77522).
CORPUS CHRISTI, Texas - A Texas federal judge on June 16 remanded an insured's fraud lawsuit against his homeowners insurer and insurance adjusters regarding denied coverage for hailstorm damage claims (Michael Garza v. Scottsdale Insurance Co., et al., No. 15-149, S.D. Texas; 2015 U.S. Dist. LEXIS 77525).
CONCORD, N.H. - A New Hampshire justice on June 15 approved a $19 million asbestos bodily injury related settlement between a reorganized company's trust and the liquidator of an insolvent insurer (In the Matter of the Liquidation of The Home Insurance Company, No. 03-E-0106, N.H. Sup., Merrimack Co.).
NEW ORLEANS - There is no professional liability coverage for a claim that attorneys were negligent in their representation of a decedent's relatives in an underlying wrongful death lawsuit, a Louisiana federal judge ruled June 15, granting the insurer's motion for summary judgment (Della Cupps, et al. v. Torus Specialty Insurance CO., et al., No. 14-615, E.D. La.; 2015 U.S. Dist. LEXIS 77750).
WASHINGTON, D.C. - The U.S. Department of Justice on June 15 announced that Children's National Medical Center Inc., Children's Hospital and its affiliated entities (collectively CNMC) agreed to pay $12.9 million to resolve allegations in a False Claims Act (FCA) lawsuit that they submitted false cost reports to the U.S. Department of Health and Human Services (HHS) and Medicare programs in the District of Columbia and Virginia (United States of America, ex rel. James A. Roark Sr. v. Children's Hospital, et al., No. 14-cv-616, D. D.C.).
LAS VEGAS - A federal district court has diversity jurisdiction over an insurance bad faith lawsuit pursuant to Ninth Circuit U.S. Court of Appeals precedent, a federal judge in Nevada ruled June 12 in denying an insured's motion to remand the action to state court (Shawn Ruybal v. Liberty Mutual Fire Insurance Co., et al., No. 15-0508, D. Nev.; 2015 U.S. Dist. LEXIS 77143).