N.Y. Majority: Priest's Alleged Sexual Abuse Acts Constituted Multiple Occurrences

    ALBANY, N.Y. - A majority of New York's highest court held May 7 that incidents of alleged sexual abuse by a priest constituted multiple occurrences and any potential liability should be apportioned pro rata among several insurance policies issued to the Roman Catholic Diocese of Brooklyn, N.Y. (Roman Catholic Diocese of Brooklyn v National Union Fire Insurance Company of Pittsburgh PA., et al., No. 69, N.Y. App., 2013 N.Y. LEXIS 1186).

    Judge Stays Environmental Claims Dispute Against Insurer In Rehabilitation

    INDIANAPOLIS - An Indiana federal judge on May 3 stayed an insured's coverage action against an insurance company regarding its duty toward environmental claims pending the rehabilitation of the insurer (CAVU Ops Inc. v. American Motorists Insurance Co., et al., No. 11-01527, S.D. Ind.; 2013 U.S. Dist. LEXIS 63504).

    Panel: Scuba Center Presents No Misrepresentation Claim Against Insurance Broker

    SAN FRANCISCO - A scuba center failed to allege an actionable misrepresentation against a surplus lines insurer and an insurance broker regarding commercial general liability insurance, the Ninth Circuit U.S. Court of Appeals affirmed May 3 (Kauai Scuba Center Inc. v. Padi Americas Inc., et al., No. 11-56346, 9th Cir.; 2013 U.S. App. LEXIS 9086).

    Conn. Appeals Court Finds Title Insurer Entitled To Request Information, Documents

    HARTFORD, Conn. - A title insurer acted within the provisions of its policy when it sought documentation and examinations under oath from its insured in its quest to resolve a tax lien issue, the Connecticut Appellate Court ruled May 7 (Chicago Title Insurance Co. v. Bristol Heights Associates LLC, et al., No. AC 34040, Conn. App.; 2013 Conn. App. LEXIS 236).

    Law Firm Insured Did Not Fraudulently Misjoin Insurer, Judge Rules, Remands Suit

    DENVER - A law firm insured did not fraudulently misjoin an insurer in its lawsuit seeking coverage for underlying counterclaims by its former employee, a Colorado federal judge ruled May 6, granting the insured's motion to remand the action to state court (Franklin D. Azar & Associates v. Farmers Insurance Exchange, et al., No. 13-cv-00658-CMA-CBS, D. Colo.; 2013 U.S. Dist. LEXIS 64344).

    Federal Judge Refuses To Remand Insured's Coverage Dispute Regarding Defect Case

    DENVER - A Colorado federal judge on May 3 declined to remand an insured's coverage action against its insurer regarding the defense of an underlying construction defect case (Cornella Brothers Inc. v. Liberty Mutual Insurance Co. and Velocity Constructors Inc., No. 13-00558, D. Colo.; 2013 U.S. Dist. LEXIS 63682).

    Illinois Federal Judge Orders Government To Provide Information In Medicare Suit

    CHICAGO - An Illinois federal judge on May 6 partially granted a defendant's motion for an order directing the federal government to file a bill of particulars in its case against him for Medicare fraud (United States of America v. Robert Kolbusz, No. 12-782, N.D. Ill.; 2013 U.S. Dist. LEXIS 64043).

    Panel Says Reinsured Is Estopped From Arguing To Compel Arbitration

    FORT WORTH, Texas - A Texas appeals court panel on May 2 affirmed a lower court decision and said an insurer is estopped from arguing to compel arbitration after arguing against arbitration of a reinsurance dispute in earlier litigations (New Hampshire Insurance Company v. Magellan Reinsurance Company, Ltd., No. 02-12-00196-CV, Texas App. 2nd Dist.; 2013 Tex. App. LEXIS 5437).

    Post-Settlement Attempts To Assert Bad Faith Constitute A Breach, Judge Rules

    NEW ORLEANS - The Housing Authority of New Orleans (HANO) breached a 2009 settlement agreement with its commercial liability insurer by seeking to reassert claims for defense costs and bad faith penalties in an underlying case after compromising its right to make any such claims, a Louisiana federal judge ruled May 2 (Republic Insurance Co. v. Housing Authority of New Orleans, No. 2:08-cv-04748, E.D. La.; 2013 U.S. Dist. LEXIS 64386).

    ERISA Applies In Dispute Over Benefits Under Converted Policy, Federal Judge Rules

    NEW ORLEANS - The Employee Retirement Income Security Act preempts state law claims by a beneficiary of a life insurance policy, which was converted to an individual policy, on her allegations that the insurer failed to pay the amount owed under the policy and the doctrines of estoppel and waiver did not apply, a federal judge in Louisiana ruled May 2 (Sankey v. Metropolitan Life Ins. Co. et al., No. 12-1135, E.D. La.; 2013 U.S. Dist. LEXIS 62964).

    Panel Upholds Award To Insurer On Contribution To Defense Costs In Defect Case

    SAN FRANCISCO - A California appeals panel on May 3 affirmed an award of damages to an insurer regarding another insurer's equitable contribution to the defense of an underlying construction defect case; however, the panel reversed and remanded for the limited purpose of determining whether prejudgment interest is proper and, if so, the amount of such interest (Certain London Underwriters Subscribing to Cover Note Nos. 618/A01635001/039, 618/A11635001/067 and 618/A11635001/017 v. Fairmont Specialty Insurance Co., Nos. A133478 & A134412, Calif. App., 1st Dist., Div. 2; 2013 Cal. App. Unpub. LEXIS 3169).

    Breach Of Contract Claim Does Not Allege 'Occurrence,' Alabama High Court Says

    MONTGOMERY, Ala. - Counterclaims against insureds for breach of contract and negligence regarding cabinetry work do not allege an "occurrence" under a business liability insurance policy, the Alabama Supreme Court affirmed May 3 (Shane Traylor Cabinetmaker LLC and Michael Shane Traylor v. American Resources Insurance Company Inc., No. 1110418, Ala. Sup.; 2013 Ala. LEXIS 42).

    Ohio Federal Judge FindsIssues Of Fact Exist In Food Contamination Suit

    CINCINNATI - Because material issues of fact exist in a coverage dispute arising out of an insured's recall of its products potentially contaminated with salmonella, an Ohio federal judge on May 1 denied both the insured's and insurer's motions for summary judgment (The Wornick Co. v. Houston Casualty Co., No. 11-00391, S.D. Ohio; 2013 U.S. Dist. LEXIS 62465).

    Law Prohibiting Discretionary Clauses Requires De Novo Review, Federal Judge Says

    CHICAGO - An Illinois statute prohibiting discretionary clauses in insurance policies applies to a disability policy governed by the Employee Retirement Income Security Act, where the policy was renewed and the insurer terminated the participant's disability benefits after the statute was adopted, a federal judge in Illinois ruled May 1 (Zaccone v. Standard Life Insurance Company, No. 10 CV 00033, N.D. Ill.).

    Judge Upholds Refusal To Strike Insurer's Receiver's Jury Demand On Negligence Claim

    ST. LOUIS - A federal judge in Missouri on May 2 declined to reconsider his ruling refusing to strike a jury demand filed by the special deputy receiver (SDR) of insolvent insurers regarding breach of fiduciary duty and negligence claims against certain trustee defendants (Jo Ann Howard & Associates P.C., et al. v. J. Douglas Cassity, et al., No. 09-01252, E.D. Mo.; 2013 U.S. Dist. LEXIS 62682).

    Federal Judge Refuses To Dismiss Coverage Suit Prompted By Explosion, Evacuation

    SHREVEPORT, La. - A Louisiana federal judge on May 2 denied an insured's motion to dismiss its insurers' lawsuit seeking a declaration that they have no duty to defend or indemnify the insured for underlying claims and remediation costs arising out of an October 2012 explosion and subsequent evacuation of a Louisiana town (Crum & Forster Specialty Insurance Co. v. Explo Systems Inc., No. 12-3080, W.D. La., Shreveport Div.; 2013 U.S. Dist. LEXIS 63896).

    Insured Failed To Timely Raise Claim For Rainstorm Damage, Panel Concludes

    BOSTON - An insured general contractor failed to timely raise a claim under its insurance policy for damages resulting from rainstorms at a construction site, a Massachusetts appeals panel affirmed May 1 (Providence Builders LLC v. Philadelphia Indemnity Insurance Co., No. 12-P-1123, Mass. App.; 2013 Mass. App. Unpub. LEXIS 489).

    Judge Denies Temporary Restraining Order Against Insurance Agency, Agents

    SACRAMENTO, Calif. - A federal judge in California on April 30 denied an application by insurance companies for a temporary restraining order (TRO) against an insurance agency and agents regarding usage of policyholder information (Farmers Insurance Exchange, et al. v. Steele Insurance Agency Inc., et al., No. 13-00784, E.D. Calif.; 2013 U.S. Dist. LEXIS 62507).

    Federal Judge Denies Insurer's Summary Judgment Motion Regarding Defense, Indemnity

    ORLANDO, Fla. - A commercial general liability insurer's summary judgment motion regarding its duty to defend and indemnify an underlying construction case is premature, a Florida federal judge ruled May 1 (North Pointe Insurance Co. v. Global Roofing & Sheet Metal Inc., et al., No. 12-476, M.D. Fla.; 2013 U.S. Dist. LEXIS 62196).

    No Coverage For Underlying Negligence Suit, Missouri Panel Says

    ST. LOUIS - An insurer has no duty to defend its insureds against an underlying suit because the underlying suit's allegations of negligence are based on intentional conduct, which is not covered by the policy, the Eastern District Missouri Court of Appeals, Third Division, said April 30 (Ken and Janet Allen, et al. v. Continental Western Insurance Co., No. ED99111, Mo. App., Eastern Dist., Div. 3; 2013 Mo. App. LEXIS 506).

    Showing Of Insurer's Bad Faith Can Support Equitable Subrogation, Mo. Panel Finds

    KANSAS CITY, Mo. - If an excess insurer can establish that a nurse's primary insurer breached its duties to her in an underlying wrongful death case, it may be able to succeed in its equitable subrogation claim, a Missouri appeals panel found April 30, reversing an entry of summary judgment in the primary insurer's favor (Missouri Public Entity Risk Management Fund v. American Casualty Company of Reading, Pa., No. WD75446, Mo. App., West. Div.; 2013 Mo. App. LEXIS 527).

    Policy Termination Negates ERISA Claims In Life Insurance Dispute, Judge Rules

    PIKEVILLE, Ky. - Because a decedent's life insurance policy had been canceled prior to her death, a Kentucky federal judge on April 30 held that the policy beneficiaries' claims brought under the Employee Retirement Income Security Act (ERISA) failed (Sandra Morris, et al. v. Appalachian Regional Healthcare Inc., et al., No. 7:12-cv-00101, E.D. Ky.; 2013 U.S. Dist. LEXIS 61196).

    Residential Exclusion Bars Insurance Coverage For Defect Case, Judge Holds

    SAN FRANCISCO - A commercial general liability insurer has no duty to defend or indemnify an insured or an additional insured for an underlying construction defect case, a California federal judge ruled April 30, finding that the total residential exclusion precludes coverage for residential projects (Atain Specialty Insurance Co. v. North Bay Waterproofing Inc., et al., No. 12-03339, N.D. Calif.; 2013 U.S. Dist. LEXIS 62493).

    Panel: Exclusion For Coverage Of Errors Arising Out Of Contractual Breach Applies

    CINCINNATI - The Sixth Circuit U.S. Court of Appeals on April 30 affirmed a lower court's finding that an insurance policy's exclusion for coverage of "Public Officials' Errors and Omissions arising out of . . . breach of a contractual obligation" applies to preclude coverage for defense costs related to an underlying $5,975,000 settlement reached between the insured and a maintenance company (City of Warren, et al. v. International Insurance Company of Hannover Ltd., No. 12-2201, 6th Cir.; 2013 U.S. App. LEXIS 8942).

    Panel: California Insurance Code Section 533.5 Does Not Preclude Defense Duty

    LOS ANGELES - A California appeals panel found May 1 that an insurer cannot avoid its contractual duty to defend a medical director insured against federal criminal charges by relying on California Insurance Code Section 533.5, subdivision (b), reversing a lower court's summary judgment ruling in favor of the insurer (Mt. Hawley Insurance Co. v. Richard R. Lopez Jr., No. B234082, Calif. App., 2nd Dist.; Div. 7.; 2013 Cal. App. LEXIS 346).