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Mealey's Insurance - Insurers Have No Duty To Defend, Indemnify Faulty Work, Magistrate Judge Says

PITTSBURGH - Under Pennsylvania law, commercial general liability insurers have no duty to defend or indemnify insureds for a negligent performance of contract claim arising out of alleged faulty workmanship, a Pennsylvania federal magistrate judge ruled June 30 (Peerless Insurance Co. and Ohio Security Insurance Co. v. Manown Builders, et al., No. 15-281, W.D. Pa.; 2016 U.S. Dist. LEXIS 85261).

Mealey's Insurance - Federal Magistrate Recommends Default Judgment Be Entered Against Insured

SACRAMENTO, Calif. - A federal magistrate judge in a California on June 16 recommend that a commercial general liability insurer's motion for a default judgment be granted and that a judgment be issued declaring that the insurer has no duty to defend or indemnify its insured against an underlying breach of contract and negligence lawsuit alleging the insured's pilot car services were performed "in an unworkmanlike manner" (Atain Specialty Insurance Co. v. Richard Szetela d/b/a D&D Pilot Car Services, et al., No. 14-2991, E.D. Calif.; 2016 U.S. Dist. LEXIS 78855).

Mealey's Insurance - Arkansas High Court: CGL Insurance Policies Do Not Cover Breach Of Contract

LITTLE ROCK, Ark. - A commercial general liability insurance policy does not extend basic coverage for a claim of breach of contract, a majority of the Arkansas Supreme Court held April 28, finding that there is no coverage and considering certified questions moot (Columbia Insurance Group Inc. and Columbia Mutual Insurance Co. Inc. v. Cenark Project Management Services, Inc., et al., No. CV-15-804, Ark. Sup.; 2016 Ark. LEXIS 153).

Mealey's Insurance - Judge: Faulty Work Claims Do Not Constitute 'Occurrence' Under Insurance Policies

PHILADELPHIA - Allegations of faulty workmanship in performance of a contract do not constitute an "occurrence" under commercial insurance policies and umbrella excess policies, a Pennsylvania federal judge ruled March 23, finding that an insurer has no duty to indemnify pre-tender defense costs and has no duty to provide an ongoing defense (Lenick Construction, Inc. v. Selective Way Insurance Co., No. 14-2701, E.D. Pa.; 2016 U.S. Dist. LEXIS 38119).

Mealey's Insurance - $2.28M Superstorm Sandy Claim Fails To Meet Deductible, New York Panel Says

BROOKLYN, N.Y. - A New York appeals panel on March 9 held that an oil corporation insured's $2.28 million flood loss resulting from Superstorm Sandy did not meet the deductible of its commercial liability insurance policy, reversing a lower court's ruling against the insurer in a breach of contract lawsuit (Castle Oil Corporation v. ACE American Insurance Co., No. 55812/13, N.Y. Sup.; App. Div., 2nd Dept.; 2016 N.Y. App. Div. LEXIS 1623).

Mealey's Insurance - 9th Circuit Affirms Court's Rulings In Suit Arising From 2008 California Wildfire

PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Feb. 23 affirmed a lower federal court's post-trial rulings in a breach of contract and bad faith dispute arising from a 2008 wildfire (Craig Milhouse, et al. v. Travelers Commercial Insurance Co., Nos. 13-56959 and 13-57029, 9th Cir.; 2016 U.S. App. LEXIS 3145).

Mealey's Insurance - Federal Judge Finds Water Exclusion Bars Insured's Damage From Failed Pipe

HOUSTON - A commercial property insurance policy's water exclusion endorsement precludes coverage for water damage from a failed pipe that does not qualify as personal property, a Texas federal judge ruled Feb. 19, granting summary judgment to an insurer on breach of contract and bad faith claims (Praetorian Insurance Co. v. Arabia Shrine Center Houston, No. 14-3281, S.D. Texas; 2016 U.S. Dist. LEXIS 20186).

Mealey's Insurance - Water Damage Exclusion Bars Coverage, 5th Circuit Affirms

NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Feb. 10 affirmed a lower federal court's ruling that a commercial general liability insurance policy's water damage exclusion bars coverage for an underlying claimant's damages that arose from the intrusion of rainwater, rejecting the insured's contention that the insurer committed breach of contract and bad faith (Mesa Underwriters Specialty Insurance Co. f/k/a Montpelier U.S. Insurance Co. v. LJA Commercial Solutions LLC, et al., No. 15-60360, 5th Cir.).

Mealey's Insurance - 10th Circuit Panel Partially Reverses District Court's Ruling In Bad Faith Suit

DENVER - A federal district court erred in granting summary judgment in an insurance breach of contract and bad faith lawsuit because it is unclear whether an insured had an affirmative duty to inform his insurer that he had incorporated a company he used to purchase a commercial general liability policy from the insurer, a 10th Circuit U.S. Court of Appeals panel ruled Jan. 20 in partially reversing the district court's opinion (Corey Christy v. Travelers Indemnity Company of America, No. 14-2168, 10th Cir.; 2016 U.S. App. LEXIS 891).

Mealey's Insurance - Insurer Had No Duty To Defend Breach Of Contract Claim, Federal Judge Says

WINSTON-SALEM, N.C. - A commercial general liability insurer had no duty to defend an additional insured against breach of contract claims for failure to pay a company for remediating water damage to a school, a North Carolina federal judge ruled Jan. 7, because the breach was a separate and independent act severing the causal connection with the water intrusion (Westfield Insurance Co. v. Nautilus Insurance Co., No. 14-772, M.D. N.C.; 2016 U.S. Dist. LEXIS 1432).

Mealey's Insurance - Additional Insureds Failed To Allege Breach Of Contract, Bad Faith Claims, Judge Says

SAN DIEGO - Additional insureds failed to assert counterclaims for declaratory relief, breach of contract and breach of the implied covenant of good faith and fair dealing against its commercial general liability insurer, a California federal judge ruled Oct. 28, dismissing the counterclaims (St. Paul Mercury Insurance Co. v. McMillin Homes Construction, Inc., et al., No. 15-1548, S.D. Calif.; 2015 U.S. Dist. LEXIS 147082).

Mealey's Insurance - Insurer Has Duty To Defend Breach Of Contract, Fraud Claims In Defects Dispute

LITTLE ROCK, Ark. - An insurer has a duty to defend insureds against breach of contract and fraud claims, an Arkansas federal judge ruled Sept. 23, also certifying questions to the state's high court on whether faulty workmanship resulting in property damage constitutes an "occurrence" under a commercial general liability insurance policy (Columbia Insurance Group, Inc. and Columbia Mutual Insurance Company, Inc. v. Cenark Project Management Services, Inc., et al., No. 14-00512, E.D. Ark.; 2015 U.S. Dist. LEXIS 127573).

Mealey's PI/Product Liability - Federal Judge: Complaint Involving Deli Snack Trays Does Not Allege 'Occurrence'

ALLENTOWN, Pa. - A Pennsylvania federal judge held Sept. 17 that an underlying lawsuit alleging that an insured's snack trays failed to conform to a contractually specified and required performance standards sounds in breach of contract and fails to allege an "occurrence" pursuant to primary and excess commercial general liability insurance policies, finding that the insurer has no duty to defend its insured (Firemen's Insurance Company of Washington, D.C., Plaintiff, v. Tray-Pak Corporation, No. 13-3711, E.D. Pa.; 2015 U.S. Dist. LEXIS 124192).

Mealey's Insurance - Federal Judge: Complaint Involving Deli Snack Trays Does Not Allege 'Occurrence'

ALLENTOWN, Pa. - A Pennsylvania federal judge held Sept. 17 that an underlying lawsuit alleging that an insured's snack trays failed to conform to a contractually specified and required performance standards sounds in breach of contract and fails to allege an "occurrence" pursuant to primary and excess commercial general liability insurance policies, finding that the insurer has no duty to defend its insured (Firemen's Insurance Company of Washington, D.C., Plaintiff, v. Tray-Pak Corporation, No. 13-3711, E.D. Pa.; 2015 U.S. Dist. LEXIS 124192).

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 - 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 - 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 Insurance - Arizona Panel: Jury's $1.1M Verdict Against Broker Is Excessive, Unjustified

PHOENIX - An Arizona appeals panel held June 30 that a jury's final verdict that awarded $1,134,442 in damages to a commercial diving services company on its breach of contract and negligence claims against its insurance broker was excessive and not justified by the evidence on record, vacating the award and remanding for a new trial on the issue of damages (Deepwater Divers Inc. v. Wells Fargo Insurance Services USA Inc., No. 1 CA-CV 13-0518, Ariz. App., Div. 1; 2015 Ariz. App. Unpub. LEXIS 862).

Mealey's Insurance - 11th Circuit: Insurer Has Duty To Indemnify Breach Of Contract Jury Verdict

ATLANTA - A commercial general liability insurer has a duty to indemnify an underlying breach of contract jury verdict entered against an insured regarding roof replacement work that allegedly caused leaking because the conduct was accidental, the 11th Circuit U.S. Court of Appeals ruled June 10, finding that a "contractual liability" exclusion does not apply (Pennsylvania National Mutual Casualty Insurance Co. v. St. Catherine of Siena Parish and Kiker Corp., No. 14-12151, 11th Cir.; 2015 U.S. App. LEXIS 9659).

Mealey's Insurance - Panel: Insurer Has No Duty To Defend, Indemnify Breach Of Contract Claim

RICHMOND, Va. - A commercial general liability insurer has no duty to defend or indemnify an insured against a breach of contract claim regarding the insured's alleged failure to excavate a site for the construction of a school, the Fourth Circuit U.S. Court of Appeals affirmed June 9 (Westfield Insurance Co. v. Carpenter Reclamation Inc. and The Board of Education of Greenbrier County, West Virginia, No. 14-2027, 4th Cir.; 2015 U.S. App. LEXIS 9600).

Mealey's Insurance - Panel Says Insurer Has No Duty To Indemnify Breach Of Contract Judgment

ATLANTA - A commercial general liability insurer has no duty to indemnify its insured against a $700,000 judgment awarded to homeowners for the insured's alleged breach of contract and breach of implied warranty with regard to the construction of their home, the 11th Circuit U.S. Court of Appeals affirmed April 7 (Pennsylvania National Mutual Casualty Insurance Co. v. Howard Snider, et al., No. 14-10906, 11th Cir.; 2015 U.S. App. LEXIS 5550).

Mealey's Insurance - Insured's Faulty Work Is Not A Covered 'Occurrence,' Delaware Judge Says

NEW CASTLE, Del. - Allegations of an insured's defective workmanship do not constitute an "occurrence" triggering a commercial general liability insurer's duty to defend or indemnify, a Delaware judge ruled March 30 (Westfield Insurance Company Inc. v. Miranda & Hardt Contracting and Building Services LLC, No. N14C-06-214 ALR, Del. Super., New Castle Co.; 2015 Del. Super. LEXIS 160).

Mealey's Insurance - Halloween Merchandise Was Not 'Covered Property' Under Policy, Federal Judge Says

DENVER - A Colorado federal judge on March 2 held that an insured's claim for $106,000 in Halloween merchandise is not "covered property" under a commercial insurance policy, granting the insurer's motion for summary judgment on the insured's claims for breach of contract and bad faith (Crazy Willy's Inc. v. Valley Forge Insurance Co., et al., No. 13-cv-03154, D. Colo.; 2015 U.S. Dist. LEXIS 25494).

Mealey's Insurance - Judge Dismisses Bad Faith Claim Against Insurer For Defects Coverage

TAMPA, Fla. - A Florida federal judge applied Alabama law on Feb. 20 to dismiss breach of contract and bad faith claims 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 20544).

Mealey's Insurance - Insurer Had 'Reasonable Justification' For Denying Coverage, Judge Rules

DAYTON, Ohio - A federal judge in Ohio on Feb. 17 granted summary judgment in favor of an insurer in an insurance breach of contract and bad faith lawsuit, ruling that the insurer had "reasonable justification" for denying coverage and canceling the insured's commercial homeowners insurance policy after a fire (Dion Ross v. State Farm Fire and Casualty Co., No. 13-401, S.D. Ohio; 2015 U.S. Dist. LEXIS 18707).