LexisNexis® Legal Newsroom
Mealey's Insurance - Insured May Be Able To Recover Against Adjuster In Bad Faith Suit, Judge Rules

DALLAS - A federal judge in Texas on May 10 ruled that remand of an insurance breach of contract and bad faith lawsuit to state court is warranted because an insured has shown that it may recover against the adjuster for failing to offer a fair settlement on a commercial property insurance claim (Arlington Heights Memorial Post No. 8234 Veterans Of Foreign Wars of the United States, Fort Worth, Texas, v. Covington Specialty Insurance Co., et al., No. 16-3112, N.D. Texas, 2017 U.S. Dist. LEXIS 71125).

Mealey's Insurance - 11th Circuit: Insurer Owes No Defense, Indemnity For Negligent Home Inspection

ATLANTA - A commercial general liability insurer had no duty to defend or indemnify a home inspector against allegations that an insufficient inspection failed to discover defective conditions prior to a home sale, the 11th Circuit U.S. Court of Appeals affirmed April 17, finding that the inspector's negligence did not cause any covered "property damage" (Auto-Owners Insurance Co. v. Ralph Gage Contracting Inc., et al., No. 16-15442, 11th Cir., 2017 U.S. App. LEXIS 6528).

Mealey's Insurance - Judge: Fact Issues Exist On If Independent Counsel Is Required For Insured's Defense

CHICAGO - In an insured's breach of contract and bad faith lawsuit against its commercial general liability insurer, an Illinois federal judge ruled April 11 that the parties failed to provide evidence to clear up genuine issues of material fact regarding whether independent counsel should be appointed for an insured in an underlying construction defects case (DePasquale Steel Erectors Inc. v. Gemini Insurance Co., No. 16-10892, N.D. Ill., 2017 U.S. Dist. LEXIS 54917).

Mealey's Insurance - 9th Circuit: Business Risk Exclusions Bar Coverage For Construction Defects Suit

SAN FRANCISCO - Two business risk exclusions found in a commercial general liability (CGL) insurance policy bar coverage for a construction defects lawsuit, the Ninth Circuit U.S. Court of Appeals held March 2, affirming summary judgment to an insurer on breach of contract and bad faith claims (Archer Western Contractors Ltd. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 15-55648, 9th Cir.; 2017 U.S. App. LEXIS 3796).

Mealey's Insurance - Insured's Breach Of Contract Is Barred By 2-Year Statute Of Limitations, Judge Says

DENVER - A two-year statute of limitations precludes an insured's breach of contract claim against its insurer for denied coverage for property damage to commercial properties, a Colorado federal judge ruled Feb. 13 (The Pinewood Townhome Association Inc. v. Auto-Owners Insurance Co., No. 15-01604, D. Colo.; 2017 U.S. Dist. LEXIS 19999).

Mealey's Insurance - Yahoo Sues Insurer Over Coverage Of Email Scanning Suits

SAN JOSE, Calif. - On Jan. 31, Yahoo! Inc. sued its commercial general liability (CGL) provider in California federal court, alleging breach of contract and bad faith related to the insurer's decision not to defend or indemnify the internet firm in four class actions alleging privacy violations in certain email-scanning practices (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 5:17-cv-00489, N.D. Calif.).

Mealey's Insurance - Failure To Perform Claim Is Not An 'Occurrence' Under Insurance Policy, Judge Says

EAST ST. LOUIS, Ill. - Allegations of an insured's failure to perform do not constitute an "occurrence" triggering coverage under a commercial general liability insurance policy, an Illinois federal judge ruled Jan. 31, agreeing with the insurer that they "are nothing more than claims of disappointed expectations in the performance of a construction contract" (Owners Insurance Co. v. James C. Warren d/b/a Warren Exterior and Remodeling, et al., No. 15-00349, S.D. Ill., 2017 U.S. Dist. LEXIS 13171).

Mealey's Insurance - Insurer Says No Coverage For Roofing Subcontractor's $6.6M In Faulty Work Damage

CHICAGO - A commercial general liability insurance policy does not cover a roofing subcontractor over faulty work claims that resulted in more than $6.6 million in damages to townhomes, an insurer says in its Jan. 4 complaint to an Illinois federal court (Nautilus Insurance Co. v. Classic Roofing Inc. and Custom Roofing Contracting Ltd., No. 17-45, N.D. Ill.).

Mealey's Insurance - Contract Claims Are Not Covered Under Insurance Policy, Federal Judge Says

HONOLULU - Claims based in contract do not constitute an "occurrence" under a commercial general liability insurance policy, a Hawaii federal judge ruled Dec. 16, dismissing counterclaims for breach of contract and reformation against two insurers in a coverage dispute over defects in a construction project (American Automobile Insurance Co. and National Surety Corp. v. Hawaii Nut & Bolt Inc. and Safeway Inc., No. 15-00245, D. Hawaii; 2016 U.S. Dist. LEXIS 174243).

Mealey's Insurance - Judge: Fraud Claim Against Insured Is Not An 'Occurrence' Due To Intentional Conduct

LITTLE ROCK, Ark. - Property owners' fraud claim is not a covered "occurrence" under a commercial general liability insurance policy because they allege intentional intent by an insured contractor, an Arkansas federal judge ruled Nov. 18, also upholding a previous decision that the insurer had a duty to defend a breach of contract claim (Columbia Insurance Group Inc. and Columbia Mutual Insurance Company Inc. v. Arkansas Infrastructure Inc., et al., No. 14-00512, E.D. Ark.; 2016 U.S. Dist. LEXIS 160151).

Mealey's Insurance - Judge: Insureds' Negligence Claim From Collapse Is Not Precluded By Contract

TULSA, Okla. - Insureds' negligence claim arising out of damages from a wall collapse are not barred because even if there is a contractual relationship between the insureds and a contractor, the insureds did not assume risk of loss for the collapse of a wall due to the wall's allegedly negligent construction, an Oklahoma federal judge ruled Nov. 2 (Lexington Insurance Co., et al. v. Newbern Fabricating Inc. and Baucom Concrete Construction Inc. v. Doveland Engineering Co. and Baucom Concrete Construction Inc. v. Commercial Metals Co., No. 14-0610, N.D. Okla.; 2016 U.S. Dist. LEXIS 151857).

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 - 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 - 5th Circuit Affirms Ruling In Insurer's Favor In Hurricane Ike Coverage Dispute

NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on July 7 affirmed a lower court's ruling in favor of a commercial property insurer in a breach of contract and bad faith dispute arising from Hurricane Ike damage to the insured's daycare center and warehouse (Steve Quibodeaux and the Kids Safari Inc., d/b/a Wee Care Childcare and Preschool v. Nautilus Insurance Co., No. 15-40567, 5th Cir.).

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).