LexisNexis® Legal Newsroom
Mealey's Insurance - 5th Circuit: 'Your Work' Exclusion Bars Insurer's Duty To Indemnify Award

NEW ORLEANS - A commercial general insurer has no duty to indemnify an underlying award because the "your work" exclusion bars coverage for damages arising out of the insured's preparation of the soil, the foundation and the house itself, the Fifth Circuit U.S. Court of Appeals held Aug. 27, affirming summary judgment to the insurer on claims for breach of contract, breach of the duty of good faith and fair dealing and violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (James Feaster, et al. v. Mid-Continent Casualty Co., No. 15-20074, 5th Cir.; 2015 U.S. App. LEXIS 15310).

Mealey's Insurance - Judge: Misrepresentations On Application Submitted By Agent Not Voidable

BATON ROUGE, La. - A federal judge in Louisiana on Aug. 24 denied an insurance company's motion for summary judgment in a suit in which it seeks an order declaring a general commercial policy void ab initio, after finding that an insurance agent's completion of an application containing alleged misrepresentations creates a genuine issue of material fact as to whether the defendant intended to deceive the company (Century Surety Company v. Bassam Nafel, No. 14-101-JWD-RLB, M.D. La.; 2015 U.S. Dist. LEXIS 111575).

Mealey's Insurance - Insurer Breached Contract By Violating Defense Agreement, Judge Finds

RALEIGH, N.C. - A commercial general liability insurer violated the terms of a defense agreement in failing to defend an additional insured in a construction defects case, a North Carolina federal judge ruled Aug. 14, finding that the insurer breached its contract (Liberty Mutual Fire Insurance Co. v. KB Home, et al., No. 13-831, E.D. N.C.; 2015 U.S. Dist. LEXIS 107232).

Mealey's Insurance - Insured's Faulty Work Is Not An 'Occurrence,' 6th Circuit Affirms

CINCINNATI - An insured's alleged faulty workmanship is not an "occurrence" under a commercial general liability insurance policy, the Sixth Circuit U.S. Court of Appeals affirmed on Aug. 13, finding that the insurer had no duty to defend or indemnify (Steel Supply & Engineering Co. v. Illinois National Insurance Co., No. 14-2216, 6th Cir.).

Mealey's Insurance - Judge Finds Insurer Had Duty To Defend Insureds In Asbestos Exposure Suit

SAN FRANCISCO - A commercial general liability insurer had at least a partial duty to defend an insured and an additional insured against allegations arising from breach of quiet enjoyment and demolition in an underlying lawsuit filed by tenants seeking damages for asbestos damages in a construction project, a California federal judge ruled Aug. 12 (Parklyn Bay Company LLC v. Liberty Surplus Insurance Corp., No. 13-3124, N.D. Calif.; 2015 U.S. Dist. LEXIS 106231).

Mealey's Insurance - Judge Declines To Dismiss Bad Faith Claims Against Insurer In Indemnity Case

TAMPA, Fla. - A Florida federal judge on Aug. 12 declined to dismiss an insured's bad faith for failure to settle and bad faith refusal to indemnify against a commercial liability insurer regarding its duty to indemnify a settlement of an underlying construction defects case (MI Windows & Doors LLC f/k/a MI Windows & Doors Inc. and MI Home Products Inc. v. Liberty Mutual Fire Insurance Co., No. 14-3139, M.D. Fla.; 2015 U.S. Dist. LEXIS 106108).

Mealey's Insurance - Expected Injury Exclusion Does Not Bar Insured's Duty To Indemnify, Judge Finds

NEW HAVEN, Conn. - A commercial general liability insurer has a duty to indemnify its insured for damages caused by its defectively produced shotcrete in the construction of swimming pools, a Connecticut federal judge ruled Aug. 7, finding that the expected or intended injury exclusion injury does not bar coverage (Harleysville Worcester Insurance Co. v. Paramount Concrete, et al., No. 11-578, D. Conn.; 2015 U.S. Dist. LEXIS 104869).

Mealey's IP/Tech - D.C. Circuit Turns Back Challenge To Makeup Of Copyright Royalty Board

WASHINGTON, D.C. - Minimum royalty rates of $500 for commercial and noncommercial webcasting set by the Copyright Royalty Board will stand, the District of Columbia Circuit U.S. Court of Appeals ruled Aug. 11, rejecting challenges to the merits of the determination, as well as the makeup of the board (Intercollegiate Broadcasting System Inc. v. Copyright Royalty Board and Librarian of Congress, No. 14-1068, D.C. Cir.; 2015 U.S. App. LEXIS 14015).

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).