LexisNexis® Legal Newsroom
Mealey's Insurance - Majority: Insurer Liable For $3M Judgment In Suit Arising From Teen's Suicide

SEATTLE - A majority of the Ninth Circuit U.S. Court of Appeals on Sept. 16 affirmed a lower federal court's ruling that a commercial general liability insurer had a duty to defend its insured against underlying claims that its misleading marketing, wrongful admission to a behavior modification residential program, poor educational services and negligent training contributed to a teen's suicide (Judith Newman v. United Fire & Casualty Co., No. 14-35103, 9th Cir.; 2016 U.S. App. LEXIS 17013).

Mealey's Insurance - Judge: 'Your Work' Exclusion Bars Coverage For Insured's Faulty Condominium Work

ORLANDO, Fla. - While Florida recognizes that an insured's defective work on a condominium complex gives rise to an "occurrence" caused by "property damage" under a commercial general liability insurance policy, a Florida federal judge ruled Sept. 13 that the "your work" exclusion extinguishes the insurer's duty to defend and indemnify (Evanston Insurance Co. v. DiMucci Development Corporation of Ponce Inlet Inc. and Towers Grande Condominium Association, No. 15-486, M.D. Fla.; 2016 U.S. Dist. LEXIS 123678).

Mealey's Insurance - 'Entrustment' Exclusion Bars Coverage For Theft, Vandalism Loss, Panel Affirms

MIAMI - A Florida appeals panel held Sept. 7 that a commercial insurance policy's "entrustment" exclusion applies to a third-party's actions as an insured's tenant and precludes coverage for the insured's theft and vandalism loss, rejecting the insured's argument that the exclusion is ambiguous (Grover Commercial Enterprises, Inc., etc. v. Aspen Insurance UK, Ltd., et al., No. 3D14-1987, Fla. App., 3rd Cir.).

Mealey's Insurance - Judge: Insurer Has Alleged 2nd Insurer Has Duty To Defend Suit Against Football Team

SAN JOSE, Calif. - A California federal judge on Aug. 29 held that a commercial general liability insurer has alleged that some of the claims in an underlying lawsuit against the San Francisco Forty Niners Football Co. and others are potentially covered by a second insurance policy (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 16-02114, N.D. Calif.; 2016 U.S. Dist. LEXIS 115872).

Mealey's Litigation Procedure - Judge: Misrepresentation Claims Are Not 'Occurrences' Under CGL Insurance Policy

CLEVELAND - Mobile homeowners' misrepresentation claims do not arise out of events that sought damages for an 'occurrence' under a commercial general liability insurance policy and umbrella policy, an Ohio federal judge ruled Aug. 26, finding that the insurer had no duty to defend and indemnify claims filed in a class action lawsuit (Lakeside Terrace Homes Sales Ltd., et al. v. Arrowood Indemnity Co., No. 15-1794, N.D. Ohio; 2016 U.S. Dist. LEXIS 114828).

Mealey's Insurance - Judge: Misrepresentation Claims Are Not 'Occurrences' Under CGL Insurance Policy

CLEVELAND - Mobile homeowners' misrepresentation claims do not arise out of events that sought damages for an "occurrence" under a commercial general liability insurance policy and umbrella policy, an Ohio federal judge ruled Aug. 26, finding that the insurer had no duty to defend and indemnify claims filed in a class action lawsuit (Lakeside Terrace Homes Sales Ltd., et al. v. Arrowood Indemnity Co., No. 15-1794, N.D. Ohio; 2016 U.S. Dist. LEXIS 114828).

Mealey's Insurance - No Coverage For Damage Caused By Mudslide, 10th Circuit Affirms

DENVER - The 10th Circuit U.S. Court of Appeals on Aug. 29 affirmed a lower federal court's ruling that there is no coverage for damage to an insured's commercial building caused by a mudslide (Paros Properties LLC v. Colorado Casualty Insurance Co., et al., No. 15-1369. 10th Cir.; 2016 U.S. App. LEXIS 15925).

Mealey's Insurance - Panel: Insurers Are Not Jointly, Severally Liable For $2.4M Defects Arbitration Award

DALLAS - Although two commercial general liability insurers have a duty to indemnify insureds for an underlying construction defects arbitration award, a Texas appeals panel ruled Aug. 25 that a trial court erred in finding that the insurers are jointly and severally liable for the $2.4 million award (Great American Lloyds Insurance Co. and Mid-Continent Casualty Co. v. Vines-Herrin Custom LLC, et al., No. 05-15-00230, Texas App., 5th Dist.; 2016 Tex. App. LEXIS 9407).

Mealey's PI/Product Liability - Texas Appeals Court Reduces Amount of Damages Awarded Over Construction Defects

SAN ANTONIO - A Texas appeals panel on Aug. 24 ruled that a trial court judge erred by awarding a couple $200,394.76 in damages and attorney fees for alleged construction defects, ruling that the evidence did not support the amount of damages awarded and that the Texas Residential Commercial Liability Act (RCLA) limits the amount of attorney fees the plaintiffs could receive (Bryan Smith, d/b/a Vision Design and Build v. Robert Overby, et al., No. 04-15-00436-CV, Texas App., 4th Dist.; 2016 Texas App. LEXIS 9172).

Mealey's Insurance - Magistrate Judge: California Law Allows Insurer To Rescind Policy

FRESNO, Calif. - An insurance company's motion for default judgment in a suit where it seeks to rescind a commercial insurance property policy issued to a man who claims that a warehouse he owned was robbed should be granted, a federal magistrate judge in California recommended Aug. 22, noting that state law requires insureds to provide truthful information on a policy application (United States Specialty Insurance Company v. Hussein Saleh, d/b/a 3 Hermanos Warehouses, No. 16-cv-00632-DAD-MJS, E.D. Calif.; 2016 U.S. Dist. LEXIS 111769).

Mealey's Insurance - Insured's Defective Work Is Not An 'Occurrence,' Ohio Federal Judge Finds

TOLEDO, Ohio - An insured's alleged faulty workmanship does not constitute an "occurrence," an Ohio federal judge ruled Aug. 16, also finding that a "total pollution" exclusion relieves a commercial general liability insurer of its duty to defend and indemnify allegations that the insured's negligence caused roofing tar to escape from a roof and flow into a lake (Mesa Underwriters Specialty Insurance Co. v. Ronald L. Myers, et al., No. 14-2201, N.D. Ohio; 2016 U.S. Dist. LEXIS 108444).

Mealey's Insurance - 'Your Work' Exclusion Bars Water Damage Caused By Insured's Work, Judge Says

HAMMOND, Ind.- A "your work" exclusion in a commercial general liability insurance policy precludes coverage for claims for real property structural damage and diminished value arising out of an insured's alleged faulty work that led to water intrusion in homes, an Indiana federal judge ruled Aug. 16, finding the insurer had no duty to defend or indemnify (West Bend Mutual Insurance Co. v. Cleland Homes Inc., et al., No. 12-580, N.D. Ind.; 2016 U.S. Dist. LEXIS 108030).

Mealey's Insurance - Judge: 'Sophisticated' Attorneys Failed To Provide Insurer Timely Notice Of Suit

CHICAGO - An Illinois federal judge on Aug. 15 held that the failure of insureds, "as sophisticated lawyers," to review the terms of their commercial general liability insurance policy against underlying claims against them for eight months is unreasonable as a matter of law, finding that their insurer has no duty to defend or indemnify them (Sentinel Insurance Company, LTD. v. Michael Cogan, et al., No. 15-8612, N.D. Ill., Eastern Div.; 2016 U.S. Dist. LEXIS 107761).

Mealey's Litigation Procedure - Illinois Federal Judge Allows Expert's Opinion On Sole Cause Of Admiralty Accident

CHICAGO - In an admiralty case, an expert may opine that the sole cause of an incident was a lockmaster's failure to reduce the flow of water through a dam so that a vessel and a tow could safely enter a canal, an Illinois federal judge ruled Aug. 16 (In the matter of the complaint of Ingram Barge Co. as owner of the M/V Dale A. Heller and the IB9525, IN025300, IN085089, IN095041, IN096081, IN107057, and IN117513, petitioning for exoneration from or limitation of liability, No. 13-3453 c/w In the matter of American Commercial Lines, LLC, as owner and Inland Marine Service, Inc., as owner pro hac vice of the M/V Loyd Murphy for exoneration from or limitation of liability, No. 13-4292, N.D. Ill.; 2016 U.S. Dist. LEXIS 107984).

Mealey's Insurance - 'Tract Housing' Exclusion Bars Coverage For Insureds' Defects, 5th Circuit Affirms

NEW ORLEANS - A commercial general liability insurance policy's "tract housing" precludes coverage to a group of homeowners who settled a construction defect lawsuit with its insured and then sought payment, the Fifth Circuit U.S. Court of Appeals ruled Aug. 10 (Jay Broughton, et al. v. Castlepoint National Insurance Co., formerly known as SUA Insurance Co. & Jennifer Trevino, et al. v. Castlepoint National Insurance Co., formerly known as SUA Insurance Co., No. 15-20708, 5th Cir.; 2016 U.S. App. LEXIS 14746).

Mealey's Insurance - Insured's Defective Work Is Not An 'Occurrence' Under Pennsylvania Law, Judge Says

JOHNSTOWN, Pa. - An insured's faulty workmanship does not constitute an "occurrence" under a commercial general liability insurance policy, a Pennsylvania federal judge ruled Aug. 9, relying on Kvaerner Metals Division of Kvaerner U.S., Inc. v. Commercial Union Ins. Co. (589 Pa. 317, 908 A.2d 888, 896 [Pa. 2006]) to find an insurer has no duty to defend or indemnify (Acuity, a mutual insurance company v. Knisely & Sons, Inc., et al., No. 15-76, W.D. Pa.; 2016 U.S. Dist. LEXIS 104431).

Mealey's IP/Tech - Illinois Federal Judge: Television Commercials Not Substantially Similar

CHICAGO - Allegations that Steak n Shake Inc. infringed the copyrighted television advertisement of a competitor were rejected Aug. 5 by an Illinois federal judge, who deemed the commercials dissimilar (Culver Franchising System Inc. v. Steak n Shake Inc., No. 16-75, N.D. Ill.; 2016 U.S. Dist. LEXIS 103091).

Mealey's Insurance - Faulty Work's Consequential Damages Are Insured, New Jersey High Court Finds

TRENTON, N.J. - Consequential damages caused by the subcontractors' faulty workmanship constitute "property damage," and water damage from rain flowing into the interior of the property due to that faulty work is an "occurrence" under a commercial general liability insurance policy, the New Jersey Supreme Court ruled Aug. 4 (Cypress Point Condominium Association Inc. v. Adria Towers LLC, et al., No. A-13/14, N.J. Sup.; 2016 N.J. LEXIS 847).

Mealey's Insurance - Panel Certifies Question On Meaning Of 'Suit' For Insurance Policy Under Florida Statute

ATLANTA - The 11th Circuit U.S. Court of Appeals on Aug. 2 certified a question to the Florida Supreme Court regarding whether the notice and repair process set forth in Florida Statutes Chapter 558 constitutes a "suit" within the meaning of commercial general liability insurance policies (Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Co., No. 15-12816, 11th Cir.; 2016 U.S. App. LEXIS 14005).

Mealey's Labor & Employment - Insurer Has Duty To Defend Employment Practices Dispute 9th Circuit Says, Reverses

PASADENA, Calif. - In reversing a lower federal court's no coverage ruling, the Ninth Circuit U.S. Court of Appeals found July 27 that a commercial general liability insurer has a duty to defend its insured against an underlying lawsuit because the insured may not have acted with the requisite intent to trigger the policy's "intentional acts" exclusion (Steven J. Berns v. Sentry Select Insurance Co., No. 14-55996, 9th Cir.; 2016 U.S. App. LEXIS 13684).

Mealey's Banking & Finance - 9th Circuit Affirms Award Against Cabela's For Breach Of Contract

SEATTLE - The Ninth U.S. Circuit Court of Appeals on July 27 affirmed a district court's award of damages to the owner of a commercial property that was sold to a bank, with the exception of a portion that was granted to a bank in a bankruptcy settlement, finding that a retailer breached the underlying agreement by building another store within a restricted area (Cabela's Wholesale Inc. v. Hawks Prairie Investment LLC, No. 14-35157, 9th Cir.; 2016 U.S. App. LEXIS 13683).

Mealey's Insurance - Insurer Has Duty To Defend Employment Practices Dispute 9th Circuit Says, Reverses

PASADENA, Calif. - In reversing a lower federal court's no coverage ruling, the Ninth Circuit U.S. Court of Appeals found July 27 that a commercial general liability insurer has a duty to defend its insured against an underlying lawsuit because the insured may not have acted with the requisite intent to trigger the policy's "intentional acts" exclusion (Steven J. Berns v. Sentry Select Insurance Co., No. 14-55996, 9th Cir.; 2016 U.S. App. LEXIS 13684).

Mealey's Insurance - Panel: Insured Fails To Show 'Theft By Deception' In Dispute Over $90M Fuel Loss

NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on July 29 held that a petroleum refiner insured failed to provide any evidence that it would have acted differently had it known that a petroleum distributor's credit account was not secured, affirming a lower court's ruling that there was no "unlawful taking" to trigger commercial crime coverage for the loss of approximately $90 million worth of fuel (Tesoro Refining and Marketing Company, L.L.C. v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania, No. 15-50405, 5th Cir.; 2016 U.S. App. LEXIS 13838).

Mealey's Insurance - Insured Won't Present Evidence, Testimony In Making Bad Faith Claim, Judge Rules

HATTIESBURG, Miss. - A federal judge in Mississippi on July 18 granted three motions in limine filed by an insurer in an insurance breach of contract and bad faith lawsuit, precluding an insured from presenting evidence, damages testimony and other testimony to show that the insurer acted in bad faith in conducting an investigation into a claim for coverage under a commercial property insurance policy (JCKP LLC v. Berkley Regional Specialty Insurance Co, et al., No. 14-0117, S.D. Miss.; 2016 U.S. Dist. LEXIS 93049).

Mealey's Insurance - Coverage Barred By CGL Policy's Professional Services Exclusion, Panel Affirms

TRENTON, N.J. - A New Jersey panel affirmed July 20 that commercial general liability coverage for an underlying negligence lawsuit against an engineering firm insured is barred by the policy's professional services exclusion (EIC Group LLC v. The Travelers Indemnity Company of America, No. A-2590-14T1, N.J. Super., App. Div.; 2016 N.J. Super. Unpub. LEXIS 1683).