CHARLESTON, S.C. - A policyholder "fail$(ed$) to state a plausible claim for relief" in his claims for breach of contract and bad faith against his homeowners insurer because he did not establish that the insurer had a duty to pay a disputed claim within 60 days or to pay any related interest amounts, a South Carolina federal judge ruled June 6, granting the insurer's dismissal motion (Brent J. Griffith v. State Farm Fire and Casualty Co., No. 2:12-cv-00239, D. S.C.; 2012 U.S. Dist. LEXIS 78184).
WASHINGTON, D.C. - A District of Columbia federal judge on June 6 partially granted a motion to dismiss a reimbursement suit brought by an out-of-network provider against an insurer of Medicaid-eligible individuals, saying that a claim for breach of contract as a third-party beneficiary will continue but that the plaintiff failed to support claims for subrogation and violation of the Medicaid statute (Prince George's Hospital Center v. Advantage Healthplan Inc., No. 03-2392, D. D.C.; 2012 U.S. Dist. LEXIS 78257).
SACRAMENTO, Calif. - An insurer breached its contract by failing to defend an underlying negligence lawsuit arising out of dry-rot damages against its insured, a California federal judge held June 6, granting partial summary judgment to the insured (Riverbank Holding Co. LLC v. New Hampshire Insurance Co., No. 11-2681, E.D. Calif.; 2012 U.S. Dist. LEXIS 78781).
NEW ORLEANS - A construction contract is ambiguous as to whether a building owner or its contractor was responsible for purchasing property insurance to cover Hurricane Katrina damage to renovation work, the Fifth Circuit U.S. Court of Appeals ruled June 6, vacating and remanding a lower court's ruling that the building owner bore the duty (WH Holdings, L.L.C., et al. v. ACE American Insurance Company, No. 10-31091, 5th Cir.; 2012 U.S. App. LEXIS 11410).
NEW YORK - A creditor that had business contracts with bankrupt law firm Dewey & Leboeuf filed a brief on June 6 in the U.S. Bankruptcy Court for the Southern District of New York objecting to a bankruptcy judge's order authorizing the use of cash collateral, as well as the decision to modify the automatic stay (In Re: Dewey & Leboeuf LLP, No., 12-12321, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the brief available within the full update.
HOUSTON - A federal judge in Texas on June 6 dismissed an insurance agency's claim for violation of the Texas Free Enterprise and Antitrust Act against insurers regarding a producer agreement; however, the judge refused to dismiss the agency's breach of contract claim (Elton Porter Marine Insurance Agency v. Markel American Insurance Co. and American Underwriting Managers Agency Inc., No. 11-4432, S.D. Texas; 2012 U.S. Dist. LEXIS 78515).
NEW YORK - An affiliate of bankrupt Dynegy Holdings LLC on June 4 filed an adversary complaint in the U.S. Bankruptcy Court for the Southern District of New York, alleging breach of contract on the part of a company with which it had an agreement for the delivery of coal for the operation of Dynegy's plants (Dynegy Danskammer LLC v. Peadbody Coaltrade International Ltd. (In Re: Dynegy Holdings LLC, et al.), No. 11-38111, Adv. No. 12-09050, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the complaint available within the full update.
TROY, Mich. - The Michigan Court of Appeals on June 5 overturned a $1.14 million judgment in favor of Calhoun County in its dispute with Blue Cross & Blue Shield of Michigan (BCBSM) over access fees charged for coverage of Medicare-eligible individuals not part of a group insurance plan. The appeals court determined that the access fee, while not specifically spelled out in an administrative services contract (ASC) contract, was agreed to when the parties signed the contract giving BCBSM the duty of insuring Medicare-eligible, nongroup individuals (Calhoun County v. Blue Cross & Blue Shield of Michigan, No. 303274, Mich. App.; 2012 Mich. App. LEXIS 1073).
ROCK HILL, S.C. - An engineer's report that contradicts a homeowner's claimed damage is sufficient to show that an insurer's claim denial was based on "a good faith dispute over the extent of damage," a South Carolina federal judge ruled June 4, granting dismissal of the insured's bad faith claim (Donald Stevenson v. Allstate Insurance Co., No. 0:11-cv-00625, D. S.C.; 2012 U.S. Dist. LEXIS 76747).
CHICAGO - An Illinois federal judge on June 1 rebuffed allegations by Microsoft Corp. that Eolas Technologies Inc. breached a contract by asserting certain patents in Texas federal court (Microsoft Corp. v. Eolas Technologies Inc., No. 10-3820, N.D. Ill.; 2012 U.S. Dist. LEXIS 75975).
NEW YORK - Bankrupt AMR Corp., the parent company of American Airlines, on June 4 published a proposed findings of fact and conclusion of law in which it contends that the failure of the various unions representing American's employees to agree with the airline's business proposals in its reorganization plan is "without good cause" (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view AMR findings available within the full update.
HONOLULU - A commercial general liability insurer had no duty to defend and indemnify its insured against underlying claims of breach of contract and breach of warranties, a Hawaii federal judge held June 1, granting default judgment to the insurer based on a magistrate judge's findings and recommendation (Nautilus Insurance Co. v. Waikoloa Enterprises Inc. d/b/a Waikoloa Title, et al., No. 11-00646, D. Hawaii; 2012 U.S. Dist. LEXIS 77206).
GRETNA, La. - The Fifth Circuit Louisiana Court of Appeal on May 31 affirmed a trial court decision to dismiss fraud claims brought against the owners of a construction firm, concluding that the plaintiffs lacked evidence that the defendants hid the fact that a subcontractor would be building their home (Chateau Homes by RJM Inc. v. Chad Aucoin, et al., No. 11-CA-1118, La. App., 5th Cir.; 2012 La. App. LEXIS 759).
DETROIT - Blue Cross Blue Shield of Michigan (BCBS) is not entitled to information related to pre-complaint investigations conducted by the U.S. Department of Justice, a federal judge in Michigan ruled May 30 in an action filed by the DOJ and the State of Michigan that sought to enjoin BCBS from including "most favored nation" (MFN) clauses in its contracts with hospitals in Michigan (United States of America and the State of Michigan v. Blue Cross Blue Shield of Michigan, No. 10-14155, E.D. Mich.). View prior history, 2011 U.S. Dist. LEXIS 89849.
NEW ORLEANS - A master vendor contract (MVC) does not bar a breach of implied warranty of workmanlike performance claim filed by insureds and their insurer against the company that repaired the insureds' vessel, a Louisiana federal judge held May 30, granting partial summary judgment to the insureds and insurer (Kevin Gros Marine Inc., et al. v. Quality Diesel Service Inc. and St. Paul Fire & Marine Insurance Co., No. 11-2340, E.D. La.; 2012 U.S. Dist. LEXIS 74371).
NASHVILLE, Tenn. - An insurance broker breached a sale agreement's noncompete clause with its former employee, a Tennessee federal judge held May 30, granting summary judgment to the employee on his breach of contract claim (Gary Carrigan v. Arthur J. Gallagher Risk Management Services Inc., No. 10-1089, M.D. Tenn.; 2012 U.S. Dist. LEXIS 74452).
LOS ANGELES - A California federal judge on May 29 refused to dismiss a law firm insured's breach of contract and bad faith lawsuit against its professional liability insurer (Browne George Ross LLP v. Lexington Insurance Co., No. 12-2148, C.D. Calif., Western Div.). Subscribers may access the in chambers order available within the full update.
ATLANTA - Whether damages for diminution of value to an insured are recoverable under its insurance policy depends on the specific language of the contract itself and can be resolved through application of the general rules of contract construction, the Georgia Supreme Court ruled May 29, answering in the affirmative a question raised to it (Royal Capital Development LLC v. Maryland Casualty Co., No. S12Q0209, Ga. Sup.; 2012 Ga. LEXIS 525).
NEW YORK - The Second Circuit U.S. Court of Appeals on May 29 in a divided ruling denied rehearing en banc of its Feb. 1 opinion affirming its prior holding that a mandatory class action waiver clause in American Express Co.'s (AmEx) standardized service contract violated the Federal Arbitration Act (FAA) (In re: American Express Merchants' Litigation (Italian Colors Restaurant, et al. v. American Express Travel Related Services Company, et al.), No. 06-1871-cv, 2nd Cir.). Subscribers may view the order available within the full update.
LOS ANGELES - An insurer's stated practice of providing only partial coverage for auto repairs obtained at an "unapproved repair facility" do not violate state law, a California appeals panel ruled May 24, affirming a lower court's dismissal of a putative class action for breach of contract and bad faith based on the practice (Eric E. Ortega v. Topa Insurance Co., et al., No. B228889, Calif. App., 2nd Dist.; 2012 Cal. App. LEXIS 621).
PHILADELPHIA - A Third Circuit U.S. Court of Appeals panel on May 23 overturned summary judgment in an auto accident action involving a rented van, noting that questions remain regarding the rental contract (Diana Banks, et al. v. International Rental and Leasing Corp., No. 08-1603, 3rd Cir.; 2012 U.S. App. LEXIS 10358).
KANSAS CITY, Kan. - A federal judge in Kansas concluded May 23 that she has personal jurisdiction over insurance agents' third-party claims for misappropriation of trade secrets and tortious interference with contracts and business relationships (Government Benefits Analysts Inc., et al. v. Gradient Insurance Brokerage Inc., et al., No. 10-2558, D. Kan.; 2012 U.S. Dist. LEXIS 71482).
FORT WORTH, Texas - Insureds failed to show that their insurer had a duty to defend three construction defect actions, a Texas federal judge held May 22, granting partial summary judgment to the insurer on a breach of contract claim (D.R. Horton Inc., et al. v. American Guarantee & Liability Insurance Co., No. 11-039, N.D. Texas; 2012 U.S. Dist. LEXIS 72127).
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 24 affirmed a lower federal court's ruling in favor of a commercial general liability insurer on the insured's breach of contract and bad faith claims in a coverage dispute arising from allegations that the insured sold defective reheat coils and air valves to a university hospital (Toro-Aire Inc. v. Federal Insurance Co., No. 10-56880, 9th Cir.; 2012 U.S. App. LEXIS 10514).
MINNEAPOLIS - A federal judge in Minnesota on May 22 dismissed a couple's claim that GMAC Mortgage LLC is liable for breach of contract for failing to honor an alleged oral agreement that allowed the plaintiffs to make weekly payments of $1,000 to cure default on their mortgage loan because the Minnesota's credit statute of frauds requires all credit agreements to be in writing and signed by both debtor and creditor (James A. Winkler, et al. v. GMAC Mortgage LLC, et al., No. 12-46, D. Minn.; 2012 U.S. Dist. LEXIS 70849).