LexisNexis® Legal Newsroom
Mealey's Insurance - Kansas Federal Judge Allows Insured To Add Breach Of Contract, Bad Faith Claims

WICHITA, Kan. - An insured seeking coverage for hailstorm damage to two commercial buildings is permitted to amend its complaint to add claims for breach of contract and bad faith because the addition of the claims would not be futile and the insurers will not be prejudiced as a result of the amendment, a Kansas federal judge said Sept. 8 (Flex Financial Holding Co. v. OneBeacon Insurance Group LLC et al., No. 15-7205, D. Kan., 2017 U.S. Dist. LEXIS 145349).

Mealey's Insurance - Insurer Owes No Coverage For Water Damage From Leaking Roof, Judge Says

MOBILE, Ala. - An Alabama federal judge on Sept. 6 held that a building owner insured has failed to satisfy its burden of establishing that an exception to a deluxe property policy's rain limitation applies, concluding that neither the property policy nor a commercial general liability insurance policy covers the insured's damages arising from a roof leak caused by 2.43 inches of rain (Travelers Property Casualty Company of America v. Brookwood, LLC, No. 15-01016, N.D. Ala., 2017 U.S. Dist. LEXIS 143894).

Mealey's Insurance - Ohio High Court Majority Dismisses Construction Defects Insurance Appeal

COLUMBUS, Ohio - While the majority of the Ohio Supreme Court on Sept. 5 dismissed an appeal in a case over coverage under a commercial general liability insurance policy for construction defects, a dissenting justice wrote that the policy does not define "occurs" with regard to the requirement that the property damage occur during the policy period (Lightning Rod Mutual Insurance Co. v. Robert Southworth, et al., No. 2016-1116, Ohio Sup., 2017 Ohio LEXIS 1660).

Mealey's Insurance - Judge: Claims Based Solely On Faulty Workmanship Do Not Amount To 'Occurrence'

PHILADELPHIA - Granting commercial general liability insurers' motion for summary judgment in a breach of contract lawsuit, a Pennsylvania federal judge held Aug. 31 that underlying construction defects claims against insureds fail to amount to an "occurrence" under the policies and that the "real estate development activities-completed operations" exclusion further bars coverage (Northridge Village LP, et al. v. Travelers Indemnity Co. of Connecticut, et al., No. 15-1947, E.D. Pa., 2017 U.S. Dist. LEXIS 140541).

Mealey's Insurance - California Panel Reverses $471,313 Attorney Fees Award In Construction Defects Suit

SAN DIEGO - A California appeals panel on Aug. 30 reversed a lower court's $471,313.52 award of attorney fees and resultant $500,000 punitive damages awards against a commercial general liability insurer in a construction defects insurance dispute, finding that the attorney fees award is inconsistent with the damages principles and policies established in Brandt v. Superior Court (1985) 37 Cal.3d 813 (Pulte Home Corp. v. American Safety Indemnity Co., No. D070478, Calif., App., 4th Dist., Div. 1, 2017 Cal. App. LEXIS 748).

Mealey's Insurance - South Dakota High Court: Insurer Owed Defense For Negligent Construction

PIERRE, S.D. - A commercial general liability insurer had a duty to defend an insured because the underlying allegations arguably state a covered claim, the South Dakota Supreme Court ruled Aug. 30, finding that the policy bars only the faulty work itself, not damage to other nondefective work (Lowery Construction & Concrete LLC v. Owners Insurance Co., No. 27946, S.D. Sup.).

Mealey's Insurance - U.S. High Court Denies Rehearing In Dispute Over Employment-Related Practices

WASHINGTON, D.C. - The U.S. Supreme Court on Aug. 25 refused to reconsider its denial of a petition for a writ of certiorari seeking to reverse a California appellate court's finding that a commercial general liability insurance policy's employment-related practices (ERP) exclusion bars coverage for all claims alleged against an insured and its employee arising from alleged sexual harassment and assault (Alana Munoz v. Golden Eagle Insurance Corp., No. 16-1245, U.S. Sup.).

Mealey's PI/Product Liability - Judge Remands, Says Asbestos Case Focuses On Insulation, Not Prototype

LOS ANGELES - Commercially available insulation, and not the working prototype of a U.S. Navy nuclear propulsion system on which it was applied, is the focus of a widow's case, a federal judge in California held Aug. 21 in reversing course and remanding an asbestos case originally removed under the government contractor statute (Wayne Yocum, et al. v. CBS Corp., et al., No. 17-1061, C.D. Calif., 2017 U.S. Dist. LEXIS 133418).

Mealey's Litigation Procedure - Magistrate Grants Stay Pending Approval Of Settlement Of Fax Ads Coverage Dispute

TAMPA, Fla. - A Florida federal magistrate on Aug. 18 signed an order granting a joint motion to stay trial and pretrial deadlines pending approval of a settlement in a fax ads coverage dispute the same day she denied the commercial general liability insurer's motion in limine seeking to exclude three categories of evidence and testimony from trial (Zurich American Insurance Co. v. European Tile and Floors, Inc., et al., No. 16-729, M.D. Fla., 2017 U.S. Dist. LEXIS 132029).

Mealey's Insurance - Magistrate Grants Stay Pending Approval Of Settlement Of Fax Ads Coverage Dispute

TAMPA, Fla. - A Florida federal magistrate on Aug. 18 signed an order granting a joint motion to stay trial and pretrial deadlines pending approval of a settlement in a fax ads coverage dispute the same day she denied the commercial general liability insurer's motion in limine seeking to exclude three categories of evidence and testimony from trial (Zurich American Insurance Co. v. European Tile and Floors, Inc., et al., No. 16-729, M.D. Fla., 2017 U.S. Dist. LEXIS 132029).

Mealey's Toxic Tort/Environmental - Judge Remands, Says Asbestos Case Focuses On Insulation, Not Prototype

LOS ANGELES - Commercially available insulation, and not the working prototype of a U.S. Navy nuclear propulsion system on which it was applied, is the focus of a widow's case, a federal judge in California held Aug. 21 in reversing course and remanding an asbestos case originally removed under the government contractor statute (Wayne Yocum, et al. v. CBS Corp., et al., No. 17-1061, C.D. Calif., 2017 U.S. Dist. LEXIS 133418).

Mealey's Insurance - Federal Judge Dismisses Coverage Dispute Over Damage To Texas Motel

DALLAS - A Texas federal judge on Aug. 15 granted an insured's motion to dismiss its commercial insurer's declaratory judgment lawsuit disputing coverage for alleged storm damage to the insured's motel, finding that the majority of the factors in Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495, 62 S. Ct. 1173, 86 L. Ed. 1620 (1942), weigh in favor of dismissal (GuideOne National Insurance Company v. Bhav Harri, LLC, No. 16-00740, N.D. Texas, 2017 U.S. Dist. LEXIS 129473).

Mealey's IP/Tech - Potential For Punitive Damages Creates Conflict Of Interest, Federal Judges Rules

BROOKLYN, N.Y. - A New York federal judge on Aug. 3 granted an insured's motion for partial summary judgment by declaring that it is entitled to independent counsel in an underlying trademark infringement lawsuit insofar as the underlying action involves claims for punitive damages, denying a commercial general liability insurer's motion to dismiss the insured's breach of contract suit (Med-Plus, Inc. v. American Casualty Company of Reading, PA, No. 16-2985, E.D. N.Y., 2017 U.S. Dist. LEXIS 123553).

Mealey's Insurance - Potential For Punitive Damages Creates Conflict Of Interest, Federal Judges Rules

BROOKLYN, N.Y. - A New York federal judge on Aug. 3 granted an insured's motion for partial summary judgment by declaring that it is entitled to independent counsel in an underlying trademark infringement lawsuit insofar as the underlying action involves claims for punitive damages, denying a commercial general liability insurer's motion to dismiss the insured's breach of contract suit (Med-Plus, Inc. v. American Casualty Company of Reading, PA, No. 16-2985, E.D. N.Y., 2017 U.S. Dist. LEXIS 123553).

Mealey's Insurance - Judge Refuses To Dismiss Suit Over Fraudulent Insurance Policies

FORT WORTH, Texas - A federal judge in Texas on Aug. 4 denied a motion to dismiss filed by an insurance agency accused of selling fraudulent commercial general liability policies to a framing contractor, finding that the court has personal jurisdiction over the lawsuit (Rankin Construction National Builders LLC v. Frank H. Reis, Inc., No. 17-CV-530-A, N.D. Texas, 2017 U.S. Dist. LEXIS 123096).

Mealey's PI/Product Liability - Judge Trims Claims In Securities Class Action Against Drug Maker, Others

PHOENIX - A lead plaintiff in a securities class action lawsuit against a commercial-stage specialty pharmaceutical company and certain of its current and former executive officers has failed to show that a majority of the defendants' alleged misrepresentations concealing their involvement in an illegal kickback scheme with doctors were actionable and that seven of 10 alleged corrective disclosures had any causal connection to the alleged fraud, a federal judge in Arizona ruled Aug. 1 in granting in part and denying in part the defendants' motion to dismiss (Richard Di Donato, et al. v. Insys Therapeutics Inc., et al., No.16-0302, D. Ariz., 2017 U.S. Dist. LEXIS 120983).

Mealey's Litigation Procedure - Judge Trims Claims In Securities Class Action Against Drug Maker, Others

PHOENIX - A lead plaintiff in a securities class action lawsuit against a commercial-stage specialty pharmaceutical company and certain of its current and former executive officers has failed to show that a majority of the defendants' alleged misrepresentations concealing their involvement in an illegal kickback scheme with doctors were actionable and that seven of 10 alleged corrective disclosures had any causal connection to the alleged fraud, a federal judge in Arizona ruled Aug. 1 in granting in part and denying in part the defendants' motion to dismiss (Richard Di Donato, et al. v. Insys Therapeutics Inc., et al., No.16-0302, D. Ariz., 2017 U.S. Dist. LEXIS 120983).

Mealey's Securities/D&O Liability - Judge Trims Claims In Securities Class Action Against Drug Maker, Others

PHOENIX - A lead plaintiff in a securities class action lawsuit against a commercial-stage specialty pharmaceutical company and certain of its current and former executive officers has failed to show that a majority of the defendants' alleged misrepresentations concealing their involvement in an illegal kickback scheme with doctors were actionable and that seven of 10 alleged corrective disclosures had any causal connection to the alleged fraud, a federal judge in Arizona ruled Aug. 1 in granting in part and denying in part the defendants' motion to dismiss (Richard Di Donato, et al. v. Insys Therapeutics Inc., et al., No.16-0302, D. Ariz., 2017 U.S. Dist. LEXIS 120983).

Mealey's Insurance - Panel Says Synthetic Stucco Exclusion Bars Insurance Coverage For Water Damage

MILWAUKEE - A commercial general liability insurance policy's synthetic stucco exclusion precludes coverage in a dispute between a condominium association and the insurer of a general contractor over water damage caused by subcontractors' defective work, a Wisconsin appeals panel affirmed July 31 (Kaitlin Woods Condominium Association Inc. v. Kaitlin Woods LLC, et al., No. 2015AP423, Wis. App., Dist. 1, 2017 Wisc. App. LEXIS 565).

Mealey's PI/Product Liability - Majority Affirms In Part, Vacates In Part Ruling In Suit Arising From Shooting

ANNAPOLIS, Md. - A majority of the Maryland Court of Special Appeals on July 27 affirmed a lower court's ruling that a commercial general liability insurer failed to establish that the policy's assault and battery exclusion barred coverage for an underlying shooting that injured a patron of the insured's restaurant, finding, however, that the judgment against the insurer should be reduced from $100,000 to $74,999.99 (White Pine Insurance Co. v. Howard R. Taylor, No. 493, September Term, 2016, Md. Spec. App., 2017 Md. App. LEXIS 758).

Mealey's Insurance - Majority Affirms In Part, Vacates In Part Ruling In Suit Arising From Shooting

ANNAPOLIS, Md. - A majority of the Maryland Court of Special Appeals on July 27 affirmed a lower court's ruling that a commercial general liability insurer failed to establish that the policy's assault and battery exclusion barred coverage for an underlying shooting that injured a patron of the insured's restaurant, finding, however, that the judgment against the insurer should be reduced from $100,000 to $74,999.99 (White Pine Insurance Co. v. Howard R. Taylor, No. 493, September Term, 2016, Md. Spec. App., 2017 Md. App. LEXIS 758).

Mealey's Insurance - Insurer Did Not Breach Contract By Failing To Pay $306,808 Post-Judgment Interest

DETROIT - A Michigan federal judge on July 20 granted a commercial excess insurer's motion for summary judgment in an insured's breach of contract lawsuit seeking to recover $306,808.46 in post-judgment interest that was awarded against the insured in an underlying product liability dispute (Key Safety Systems, Inc. v. AIG Specialty Insurance Co., No. 16-11974, E.D. Mich., 2017 U.S. Dist. LEXIS 112837).

Mealey's PI/Product Liability - Judge Retains Jurisdiction Over Coverage Suit Arising From Death At Haunted House

TULSA, Okla. - An Oklahoma federal judge on July 13 denied insureds' motion to dismiss a commercial general liability insurer's declaratory judgment lawsuit challenging coverage for an underlying fatal accident that occurred at a haunted house operated by the insureds, finding that it is appropriate to exercise jurisdiction (Mesa Underwriters Specialty Insurance Co. v. Victor R. Marquez, et al., No. 16-213, N.D. Okla., 2017 U.S. Dist. LEXIS 108638).

Mealey's Insurance - Judge Retains Jurisdiction Over Coverage Suit Arising From Death At Haunted House

TULSA, Okla. - An Oklahoma federal judge on July 13 denied insureds' motion to dismiss a commercial general liability insurer's declaratory judgment lawsuit challenging coverage for an underlying fatal accident that occurred at a haunted house operated by the insureds, finding that it is appropriate to exercise jurisdiction (Mesa Underwriters Specialty Insurance Co. v. Victor R. Marquez, et al., No. 16-213, N.D. Okla., 2017 U.S. Dist. LEXIS 108638).

Mealey's Insurance - Insured's Negligent Work Constitutes An 'Occurrence' Under Policy, 1st Circuit Says

CHICAGO - A condominium association's claim that a painting subcontractor acted negligently is sufficient under Illinois law to constitute an "occurrence" under a commercial general liability policy, the Seventh Circuit U.S. Court of Appeals affirmed July 13 (Westfield Insurance Co. v. National Decorating Service, Inc., et al., No. 16-1439, 7th Cir., 2017 U.S. App. LEXIS 12516).