LexisNexis® Legal Newsroom
    Mealey's Insurance - Insureds' Loss Caused By 'Earth Movement,' Subject To Limit, Magistrate Judge Says

    CHICAGO - Insureds' loss resulted from naturally occurring "earth movement" within the meaning of a builders risk insurance policy and, thus, are subject to the $2.5 million limit, an Illinois federal magistrate judge ruled Oct. 6 (One Place Condominium LLC, et al. v. Travelers Property Casualty Company of America, No. 11-2520, N.D. Ill.; 2014 U.S. Dist. LEXIS 142025).

    Mealey's Insurance - Judge Finds Policy Void Based On Inflated Purchase Price Of Boat

    GALVESTON, Texas - A federal appeals court judge sitting by designation over an insurance dispute in the U.S. District Court for the Western District of Texas on Oct. 6 ruled that a man's misrepresentation on an insurance policy application about the purchase price of a boat that was destroyed by a fire voided the policy because New York law applied to the contract (Marine Insurance Company Ltd. v. Joel Cron, et al., No. 13-CV-00437, S.D. Texas; 2014 U.S. Dist. LEXIS 141704).

    Mealey's Insurance - South Carolina Federal Judge Orders Arbitration In Health Insurance Payment Dispute

    GREENVILLE, S.C. - A federal judge in South Carolina on Oct. 3 held that an arbitration clause in a hospital services agreement governed a reimbursement dispute between a hospital and an insurance company and dismissed the complaint without prejudice (Greenville Hospital System v. Employee Welfare Benefits Plan for Employees of Hazelhurst Management Co., No. 14-1919, D. S.C.; 2014 U.S. Dist. LEXIS 140698).

    Mealey's Insurance - Judge Overrules Insurance Companies' Objections To CERCLA Settlement

    NEWARK, N.J. - A federal judge in New Jersey on Oct. 3 overruled objections by three insurance companies and Exxon Mobil Corp. over a proposed settlement between the federal government and Cornell-Dubilier Electronics Inc. (CDE), finding that the terms of the parties' agreement were fair and reasonable and that liability for cleanup at the Superfund site at issue was properly apportioned (United States of America v. Cornell-Dubilier Electronics Inc., No. 12-5407, D. N.J.; 2014 U.S. Dist. LEXIS 140654).

    Mealey's Insurance - 5th Circuit: Defendants In False Claims Suit Did Not Have Qualified Immunity

    NEW ORLEANS - In an unpublished opinion, the Fifth Circuit U.S. Court of Appeals on Oct. 1 granted a petition for a rehearing in a False Claims Act (FCA) case but still affirmed a decision denying a motion to dismiss the case, saying that the defendants did not have qualified immunity immunity (United States of America, ex rel. M.D. Dakshesh Kumar Parikh, et al. v. David Brown, et al., No. 13-41088, 5th Cir.; 2014 U.S. App. LEXIS 18809).

    Mealey's Insurance - High Court Denies Review Of Disability Plan Participant's Installment Contract Theory

    WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 6 denied review of a disability plan participant's petition seeking review of a First Circuit U.S. Court of Appeals ruling that his claim challenging the calculation of his benefits under the Employee Retirement Income Security Act is untimely and rejecting his theory that, similar to an installment contract, a new accrual period began with each benefits check (Robert Riley v. Metropolitan Life Insurance Company, No. 13-1434, U.S. Sup.).

    Mealey's Insurance - No Coverage For Claims That Insured Stole Motorola's Trade Secrets, Judge Rules

    CHICAGO - Insurers have no duty to defend their cellular technology company insured against Motorola Inc.'s claims that it misappropriated proprietary trade secrets and confidential information, an Illinois federal judge ruled Sept. 30, further finding that the insurers did not act in bad faith (Lemko Corp. v. Federal Insurance Co., et al., No. 12-03283, N.D. Ill.; 2014 U.S. Dist. LEXIS 138667).

    Mealey's Insurance - Federal Judge: Broker Liable For $23M In Suit Arising From Superstorm Sandy Damage

    NEW YORK - An insurance broker is liable for $20 million plus $3,205,479.45 in prejudgment interest in a Superstorm Sandy coverage dispute, a New York federal judge said Oct. 1 in entering final judgment that dismissed the claims against the insurer (Cammeby's Management Co., et al. v- Affiliated FM Insurance Co., et al., No. 13 Civ. 2814 [JSR], S.D. N.Y.).

    Mealey's Insurance - Judge: Insurer Failed To Show 'Actual, Compensable Damages' In Bad Faith Suit

    LOUISVILLE, Ky. - Summary judgment in an insurance bad faith lawsuit is proper, a federal judge in Kentucky ruled Sept. 30, because an insured has failed to present a genuine issue of material fact "as to actual, compensable damages" against her insurer (Tia Minter v. Liberty Mutual Fire Insurance Co., No. 11-0249, W.D. Ky.; 2014 U.S. Dist. LEXIS 137741).

    Mealey's Insurance - Judge Dismisses Insolvent Reinsurer's Claims Against Reinsured And Others

    NEW YORK - A federal judge in New York on Sept. 30 granted a motion to dismiss breach of contract and other claims brought by an insolvent reinsurer against an insurer and the issuers of an allegedly falsified storm weather loss report (Mariah Re Ltd. [In Liquidation], acting by and through Geoffrey Varga and Jess Shakespeare, in their capacities as Liquidators thereof v. American Family Mutual Insurance Company, et al., No. 13-cv-04657, S.D. N.Y.).

    Mealey's Insurance - GAO: ACA 'Risk Corridors' Not Funded By Statute, Require Annual Appropriation

    WASHINGTON, D.C. - Congress will need to include certain language in its appropriation to the U.S. Department of Health and Human Services to fund risk corridors because the Patient Protection and Affordable Care Act (ACA) does not explicitly fund them, the Government Accounting Office (GAO) told the U.S. Senate in a Sept. 30 letter.

    Mealey's Insurance - Texas Federal Judge Allows Breach Claims To Continue In Reimbursement Suit

    DALLAS - On Sept. 30, a federal judge in Texas granted in part and denied in part a health insurer's motion to dismiss reimbursement claims, finding that some of the claims were subject to arbitration or that the plaintiff failed to exhaust administrative remedies. Claims for breach of the patients member benefit plans not subject to arbitration remain under the ruling (Infectious Disease Doctors v. Blue Cross Blue Shield of Texas, No. 13-2920, N.D. Texas; 2014 U.S. Dist. LEXIS 137561).

    Mealey's Insurance - ACA Changes To False Claims Act Disclosure Bar Apply Prospectively, Judge Says

    SAVANNAH, Ga. - Changes the Patient Protection and Affordable Care Act (ACA) made to the False Claims Act public disclosure bar apply prospectively, a Georgia federal judge held Sept. 29 (United States of America and State of Georgia, ex rel. Chad Willis v. SouthernCare Inc., No. 10-124, S.D. Ga.; 2014 U.S. Dist. LEXIS 137457).

    Mealey's Insurance - Federal Judge Partially Grants Motion To Dismiss In Medicare Anti-Kickback Case

    CAMDEN, N.J. - A federal judge in New Jersey on Sept. 29 dismissed federal False Claims Act (FCA) claims that predated March 4, 2005, as barred by the statute of limitations, but otherwise declined to dismiss the qui tam Medicare dispute (United States of America, ex rel. Marc Silver, et al. v. Omnicare Inc., et al., No 11-1326, D. N.J.; 2014 U.S. Dist. LEXIS 136800).

    Mealey's Insurance - Judge Rejects IRS Rule; Finds ACA Tax Subsidies Apply Only In State Exchanges

    ODMULGEE, Okla. - Tax subsidies are available only to individuals who enroll through state exchanges under the language Congress chose to include in the Patient Protection and Affordable Care Act (ACA), and it is not a judge's place to revise those terms, an Oklahoma federal judge held Sept. 30 (State of Oklahoma, ex rel. Scott Pruitt v. Sylvia Mathews Burwell, et al., No. 11-30, E.D. Okla.).

    Mealey's Insurance - ACA Changes Help Doom Suit Targeting San Francisco's Welfare Code Compliance

    SAN FRANCISCO - Enactment of the Patient Protection and Affordable Care Act (ACA) reduced the City and County of San Francisco's duties under state law, and plaintiffs lack public interest standing in a case challenging compliance with those duties, a California appeals court held Sept. 26 (Wilfredo Corea, et al. v. City and County of San Francisco, et al., No. A136950, Calif. App., 1st Dist.; 2014 Cal. App. Unpub. LEXIS 6840).

    Mealey's Insurance - Mo. Federal Judge Denies Underlying Plaintiffs' Motion To Intervene

    ST. LOUIS - A Missouri federal judge on Sept. 29 denied a motion to intervene filed by underlying plaintiffs seeking damages for exposure to concrete sealant on the basis that they are seeking to protect their financial interests and not seeking to litigate their rights in the federal suit (United Fire & Casualty Co. v. Titan Contractors Service Inc., No. 10-2076, E.D. Mo.; 2014 U.S. Dist. LEXIS 137446).

    Mealey's Insurance - Fact Issue As To Detrimental Reliance Precludes Summary Judgment, Judge Says

    KANSAS CITY, Kan. - A Kansas federal judge on Sept. 29 denied an investment adviser insured's motion for summary judgment in a professional liability coverage dispute, finding that, at the very least, the issues raise a material question of fact concerning detrimental reliance and additional damages (Brecek & Young Advisors Inc. v. Lloyds of London Syndicate 2003, No. 09-2516-JAR, D. Kan.; 2014 U.S. Dist. LEXIS 137663).

    Mealey's Insurance - Court's Ruling In Favor Of Insurer Is No Longer Viable, Panel Rules In Reversal

    CHICAGO - An Illinois appeals panel on Sept. 30 found that because the Illinois Supreme Court determined in Standard Mutual Insurance Co. v. Lay ([2013] IL 114617) that amounts awarded for claims under the Telephone Consumer Protection Act (TCPA) are not punitive and, therefore, are insurable, a lower court's ruling in favor of an insurer must be reversed in a coverage dispute arising from unsolicited fax ads (Central Mutual Insurance Co v. Tracy's Treasures, et al., No. 1-12-3339, Ill. App., 1st Dist., 3rd Div.).

    Mealey's Insurance - Judge: Computer Systems Fraud Was Efficient, Proximate Cause Of Bank's $485,000 Loss

    ST. PAUL, Minn. - Because a computer systems fraud was the overriding cause of a bank insured's loss, the insured is entitled to summary judgment on its claim for breach of contract and the insurer owes coverage under a financial institution bond for the insured's loss arising from a fraudulent wire transfer, a Minnesota judge ruled Sept. 29 (State Bank of Bellingham v. BancInsure Inc., et al., No. 13-cv-0900, D. Minn.; 2014 U.S. Dist. LEXIS 136849).

    Mealey's Insurance - Adjuster May Not Offer Conclusions, Interpretations In Bad Faith Case, Judge Says

    HATTIESBURG, Miss. - Stating that conclusions about an insurer's purported bad faith behavior and interpretations of policy terms are "question[s] of law for the court," a Mississippi federal judge on Sept. 26 granted in part an insured's motion to strike her insurer's expert's testimony related to a house fire claim (Sandra Willis v. Allstate Insurance Co., No. 2:13-cv-00060, S.D. Miss.; 2014 U.S. Dist. LEXIS 136139).

    Mealey's Insurance - Federal Judge Dismisses RICO Claims In Drug Copay Case

    CHICAGO - A federal judge in Illinois on Sept. 25 dismissed Racketeer Influenced and Corrupt Organizations Act claims against the manufacturer of Humira and AndroGel, saying the plaintiff failed to show the existence of a viable enterprise in the defendants' practice of offering savings cards that discount a patient's copay obligations for the drugs (New England Carpenters Health and Welfare Fund, individually and on behalf of all others similarly situated v. Abbott Laboratories, et al., No. 12-1662, N.D. Ill.; 2014 U.S. Dist. LEXIS 134857).

    Mealey's Insurance - No Coverage For Claims Of Defective Vinyl Adhesive Product, Federal Judge Says

    ST. PAUL, Minn. - There is no coverage under a general liability insurance policy for a $5 million lawsuit alleging that a manufacturer insured's vinyl adhesive product was defective, a Minnesota federal judge ruled Sept. 29, granting the insurer's motion for summary judgment (Ritrama Inc. v. HDI-Gerling America Insurance Co., No. 13-128, D. Minn.; 2014 U.S. Dist. LEXIS 137176).

    Mealey's Insurance - Party To Reinsurance Says It Has Statutory Right To Setoff

    NEW HAVEN, Conn. - A party to certain reinsurance agreements told a federal court in Connecticut on Sept. 26 that a reinsurer's motion to dismiss its setoff claims should be denied because it has a statutory right to setoff amounts contested by the parties (Odyssey Reinsurance Company f/k/a Odyssey America Reinsurance Corporation v. Cal-Regent Insurance Services Corporation, No. 14-cv-00458, D. Conn.).

    Mealey's Insurance - Judge Confirms Interim Arbitration Award In Reinsurance Dispute

    NEW YORK - A federal judge in New York on Sept. 26 granted an insurer's motion to confirm an interim arbitration award concerning prehearing security (Companion Property And Casualty Insurance Company v. Allied Provident Insurance, Inc., No. 13-cv-07865, S.D. N.Y.).