LexisNexis® Legal Newsroom
Mealey's Litigation Procedure - California Majority: Insurer May Seek Reimbursement Directly From Cumis Counsel

SAN FRANCISCO - A majority of the California Supreme Court on Aug. 10 found that a commercial general liability insurer can maintain a direct suit against its insureds' independent counsel for reimbursement of allegedly unreasonable or unnecessary underlying defense costs, reversing an appeals court in part (Hartford Casualty Insurance Co. v. J.R. Marketing, L.L.C., et al., No. S211645, Calif. Sup.; 2015 Cal. LEXIS 5405).

Mealey's Insurance - California Majority: Insurer May Seek Reimbursement Directly From Cumis Counsel

SAN FRANCISCO - A majority of the California Supreme Court on Aug. 10 found that a commercial general liability insurer can maintain a direct suit against its insureds' independent counsel for reimbursement of allegedly unreasonable or unnecessary underlying defense costs, reversing an appeals court in part (Hartford Casualty Insurance Co. v. J.R. Marketing, L.L.C., et al., No. S211645, Calif. Sup.; 2015 Cal. LEXIS 5405).

Mealey's Insurance - Judge Declines To Dismiss Contribution Claim, Finds Insurer Had Duty To Defend

LAS VEGAS - A commercial general liability insurer has a duty to defend and indemnify insureds in 16 underlying construction defect lawsuits, a Nevada federal judge ruled July 29, declining to dismiss a contribution claim filed by three other insurers who defended the insureds (Assurance Company of America, et al. v. Ironshore Specialty Insurance Co., No. 13-2191, D. Nev.; 2015 U.S. Dist. LEXIS 98990).

Mealey's Insurance - Insurer Did Not Breach Duty To Defend; No Coverage For Faulty Work, Judge Finds

MISSOULA, Mont. - A commercial general liability insurer did not breach the duty to defend or settle an underlying construction defect claim because there is no coverage for damage caused to a log home as a result of insureds' alleged faulty workmanship, a Montana federal judge ruled July 21 (Northland Casualty Co. v. Joseph S. Mulroy doing business as Yorlum Ranch and Yorlum Ranch Ltd., et al., No. 13-232, D. Mont.; 2015 U.S. Dist. LEXIS 94631).

Mealey's Insurance - Panel: Subcontractors' Faulty Work Constitutes 'Occurrence' Under Insurance Policies

TRENTON, N.J. - Consequential damages caused by subcontractors' defective work that were unintended and unexpected constitute "property damage" and an "occurrence" under commercial general liability insurance policies, a New Jersey appeals panel ruled July 21, applying the subcontractor exception to the "your work" exclusion (Bob Meyer Communities Inc. v. James R. Slim Plastering Inc., et al., No. A-5581-12T1, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1754).

Mealey's Antitrust/Unfair Competition - Judge Strikes Claims In Lidoderm Pay-For-Delay Case Filed By Retailers

SAN FRANCISCO - Retail establishments do not have standing to bring claims on their own behalf as indirect purchasers and have not adequately pleaded that they are entitled to injunctive relief in a pay-for-delay case, a California federal judge ruled July 17, while permitting the grocery stores an opportunity to amend their complaint (United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund, et al. v. Teikoku Pharma USA Inc., et al., No. 14-02521, N.D. Calif.).

Mealey's Antitrust/Unfair Competition - Divided Federal Circuit: No Commercial Marketing Of Biologic Without FDA License

WASHINGTON, D.C. - A divided panel of the Federal Circuit U.S. Court of Appeals on July 21 affirmed dismissal of California state law unfair competition and conversion claims, but vacated a California federal judge's interpretation of the Biologics Price Competition and Innovation Act (BPCIA) as permitting commercial marketing of a biologic before receiving U.S. Food and Drug Administration approval (Amgen Inc. et al. v. Sandoz Inc. et al., No. 15-1499, Fed. Cir.).

Mealey's Insurance - Consequential Damage Is An 'Occurrence' Under Insurance Policy, Panel Says

TRENTON, N.J. - Unintended and unexpected consequential damages caused by faulty work of subcontractors constitute "property damage" and an "occurrence" under commercial general liability insurance policies, a New Jersey appeals panel ruled July 21 (Belmont Condominium Association Inc. v. Arrowpoint Capital Corp., et al., No. A-4187-12T4, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1749).

Mealey's IP/Tech - Judge Strikes Claims In Lidoderm Pay-For-Delay Case Filed By Retailers

SAN FRANCISCO - Retail establishments do not have standing to bring claims on their own behalf as indirect purchasers and have not adequately pleaded that they are entitled to injunctive relief in a pay-for-delay case, a California federal judge ruled July 17, while permitting the grocery stores an opportunity to amend their complaint (United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund, et al. v. Teikoku Pharma USA Inc., et al., No. 14-02521, N.D. Calif.).

Mealey's IP/Tech - Divided Federal Circuit: No Commercial Marketing Of Biologic Without FDA License

WASHINGTON, D.C. - A divided panel of the Federal Circuit U.S. Court of Appeals on July 21 affirmed dismissal of California state law unfair competition and conversion claims, but vacated a California federal judge's interpretation of the Biologics Price Competition and Innovation Act (BPCIA) as permitting commercial marketing of a biologic before receiving U.S. Food and Drug Administration approval (Amgen Inc. et al. v. Sandoz Inc. et al., No. 15-1499, Fed. Cir.).

Mealey's Insurance - Judge: Insurer Has Duty To Defend Insured's Alleged Water Treatment Failure

BALTIMORE - A commercial general liability insurer has a duty to defend an insured in an underlying action because the alleged property damage, as the result of the insured's failed water treatment in a heating, venting and air conditioning (HVAC) system, constitutes an "occurrence," a Maryland federal judge ruled July 16 (State Automobile Mutual Insurance Co. v. Old Republic Insurance Co., et al., No. 14-2989, D. Md.; 2015 U.S. Dist. LEXIS 92707).

Mealey's Insurance - Magistrate Judge: Insurer Owes No Defense To Noninsured Entity For Negligence Claim

SHERMAN, Texas - A commercial general liability insurer has no duty to defend or indemnify a corporate entity not named as an insured for underlying negligence claims arising from the defective construction of a barn, a Texas federal magistrate judge held July 15 (Essex Insurance Co. v. Michael A. Brandon, et al., No. 14-421, E.D. Texas; 2015 U.S. Dist. LEXIS 91729).

Mealey's Toxic Tort/Environmental - D.C. Circuit Denies Biofuel Makers' Challenge Over EPA's Test Fuel Rule

WASHINGTON, D.C. - A U.S. Environmental Protection Agency regulation requiring that testing for new motor vehicles use "commercially available" fuel is not arbitrary and capricious, the District of Columbia Circuit U.S. Court of Appeals ruled July 14, overruling a petition by manufacturers of biofuel, arguing that the rule creates a catch-22 (Energy Future Coalition, et al. v. U.S. Environmental Protection Agency, No. 14-1123, D.C. Cir.; 2015 U.S. App. LEXIS 12078).

Mealey's Insurance - Oklahoma Federal Judge Dismisses Parties In Faulty Workmanship Lawsuit

OKLAHOMA CITY - An Oklahoma federal judge on July 13 ruled that there is no actual controversy between a commercial general liability insurer and two insurers and an insured with regard to faulty work claims arising from damage to a dental facility (Essex Insurance Co. v. Sheppard & Sons Construction Inc., et al., No. 12-1022, W.D. Okla.; 2015 U.S. Dist. LEXIS 90401).

Mealey's Insurance - Insurer Owes Defense As Faulty Work Claims Are An 'Accident,' Judge Says

OKLAHOMA CITY - A commercial general liability insurer has a duty to defend an insured contractor against claims arising from damage to a dental facility because alleged faulty workmanship is an accident that may give rise to coverage, an Oklahoma federal judge ruled July 9, also finding that questions remain as to the application of a "damage to property" exclusion (Essex Insurance Co. v. Sheppard & Sons Construction Inc., et al., No. 12-1022, W.D. Okla.; 2015 U.S. Dist. LEXIS 89096).

Mealey's Insurance - Consequential Damages Are 'Property Damage' Under Insurance Policies, Panel Says

TRENTON, N.J. - The unintended and unexpected consequential damages caused by subcontractors' defective work constitute "property damage" and an "occurrence" under commercial general liability insurance policies, a New Jersey appeals panel ruled July 9 (Cypress Point Condominium Association Inc. v. Adria Towers LLC, et al., No. A-2767-13T1, N.J. Super. App. Div.; 2015 N.J. Super. LEXIS 114).

Mealey's Toxic Tort/Environmental - Panel: Property Damage Exclusions Do Not Bar Claims For Negligent Installation

ATLANTA - A commercial general labiality insurance policy's "damage to property" exclusions do not preclude coverage for claims of an insured's alleged negligent installation, a Georgia appeals panel ruled July 8; however, the panel affirmed that a fungi exclusion bars coverage for the ensuing mold damage (Michael Dolan, et al. v. Auto Owners Insurance Co., No. A15A0384, Ga. App., 3rd Div.; 2015 Ga. App. LEXIS 421).

Mealey's Insurance - Texas Majority Finds Endorsement Ambiguous, Reverses Ruling In Favor Of Insurer

AMARILLO, Texas - A majority of a Texas appeals court on July 6 found that the language of a commercial general liability insurance policy's "clergy counseling professional liability coverage" endorsement is ambiguous and, therefore a lower court erred in granting summary judgment in favor of an insurer in a coverage dispute arising from claims for sexual abuse of minors (Doe #1, Doe #2 And Doe #3 v. National Union Fire Insurance Company of Pittsburgh, PA., No. 07-14-00109-CV, Texas App., 7th Dist.; 2015 Tex. App. LEXIS 6893).

Mealey's Insurance - Panel: Property Damage Exclusions Do Not Bar Claims For Negligent Installation

ATLANTA - A commercial general labiality insurance policy's "damage to property" exclusions do not preclude coverage for claims of an insured's alleged negligent installation, a Georgia appeals panel ruled July 8; however, the panel affirmed that a fungi exclusion bars coverage for the ensuing mold damage (Michael Dolan, et al. v. Auto Owners Insurance Co., No. A15A0384, Ga. App., 3rd Div.; 2015 Ga. App. LEXIS 421).

Mealey's Insurance - Insurer Has No Duty To Indemnify Settlement Of Fire Loss, Judge Concludes

RIVERSIDE, Calif. - A commercial general liability insurer has no duty to indemnify an insured's settlement over costs incurred by fire damage when no lawsuit was ever filed against the insured, a California federal judge ruled July 6 (D.W. Johnston Construction Inc. v. First Specialty Insurance Corp., No. 14-1269, C.D. Calif.; 2015 U.S. Dist. LEXIS 88119).

Mealey's Insurance - Business Risk Exclusions Bar Insured's Reimbursement Claim For Repairs, Panel Says

ATLANTA - A commercial general liability insurance policy's business risk exclusions preclude coverage for an additional insured general contractor's first-party claim seeking reimbursement of costs associated only with the repair and correction of the insured's faulty workmanship, a Georgia appeals panel held July 6 (Auto Owners Insurance Co. v. Gay Construction Co., No. A15A0145, Ga. App., 1st Div.; 2015 Ga. App. LEXIS 397).

Mealey's Litigation Procedure - Business Owners File Class Action Suit Over Santa Barbara Pipeline Rupture

LOS ANGELES - Commercial fisherman, fish buyers and owners of three businesses adversely affected by the May 19, 2015, rupture of Plains All American Pipeline LLC's Line 901, which discharged more than 100,000 gallons of crude oil onto the beaches of Refugio State Beach in Santa Barbara, Calif., and into the Pacific Ocean, filed a class action lawsuit against the company July 1 in California federal court, claiming that it negligently operated the 10-mile, 24-inch wide pipeline (Keith Andrews, et al. v. Plains All American Pipeline L.P., No. 15-cv-4989, C.D. Calif.).

Mealey's Toxic Tort/Environmental - Business Owners File Class Action Suit Over Santa Barbara Pipeline Rupture

LOS ANGELES - Commercial fisherman, fish buyers and owners of three businesses adversely affected by the May 19, 2015, rupture of Plains All American Pipeline LLC's Line 901, which discharged more than 100,000 gallons of crude oil onto the beaches of Refugio State Beach in Santa Barbara, Calif., and into the Pacific Ocean, filed a class action lawsuit against the company July 1 in California federal court, claiming that it negligently operated the 10-mile, 24-inch wide pipeline (Keith Andrews, et al. v. Plains All American Pipeline L.P., No. 15-cv-4989, C.D. Calif.).

Mealey's Insurance - Contractors Improperly Refused Insurer's Counsel In Defects Suit, Jury Finds

SAN JOSE, Calif. - Insured contractors breached their insurance contract with their commercial general liability insurer when they declined the insurer's selection of counsel to represent them in an underlying strict product liability lawsuit against an additional insured subcontractor, a California federal jury found July 2 (Travelers Property Casualty Company of America v. Kaufman & Broad Monterey Bay Inc., et al., No. 13-04745, N.D. Calif.).

Mealey's Bankruptcy - 2nd Circuit Addresses Withdrawal Liability Claim Against Bankruptcy Estate

NEW YORK - A multiemployer pension plan failed to demonstrate the amount of unfunded benefits attributable to post-petition operation of a bankruptcy estate, the Second Circuit U.S. Court of Appeals ruled on July 2 in a summary order disallowing the plan's administrative expense claim for a portion of the estate's withdrawal liability (Food Employers Labor Relations Association and United Food and Commercial Workers Pension Fund v. The Great Atlantic & Pacific Tea Company, No. 14-3349-bk, 2nd Cir.; 2015 U.S. App. LEXIS 11402).