HARRISBURG, Pa. - A commercial general liability insurer has a duty to defend and indemnify an insured subcontractor against a contractor's claims of negligent installation, the Pennsylvania Superior Court affirmed Feb. 9 (J.J.D. Urethane Co. v. Westfield Insurance Co., et al., Nos. 1440 EDA 2017 & 1554 EDA 2017, Pa. Super., 2018 Pa. Super. Unpub. LEXIS 396).
NEW YORK - The Second Circuit U.S. Court of Appeals on Feb. 13 vacated and remanded a lower federal court's dismissal of an insurer's petition to assert a third-party interest in a criminal forfeiture proceeding but denied the insurer's appeal of the lower court's denial of its request for restitution for $15 million that it paid its insured under the policy's employee theft coverage (Federal Insurance Company v. United States of America, Nos. 16-2967 and 16-3402, 2nd Cir., 2018 U.S. App. LEXIS 3312).
SACRAMENTO, Calif. - California launched an investigation into Aetna Inc.'s health insurance claims approval and prior authorization process after learning that one of the company's medical reviewers testified in a deposition that he was trained not to review medical records but instead rely on what was provided to him by the company's nurses, the state's insurance commissioner announced in a Feb. 12 statement.
DENVER - A majority of the 10th Circuit U.S. Court of Appeals concluded Feb. 13 that a lower federal court erred in finding that a subcontractor's faulty workmanship that caused damage to an insured's own work can never be an "occurrence," reversing and remanding (Black & Veatch Corporation v. Aspen Insurance [UK] Ltd, et al., No. 16-3359 10th Cir., 2018 U.S. App. LEXIS 3342).
LOS ANGELES - After finding that an insurance broker was not improperly joined in an action in which a moving company asserts claims for violation of California's unfair competition law (UCL) and other causes of action in relation to an insurer's refusal to defend it in an underlying lawsuit, a California federal judge on Feb. 8 remanded the case to state court and declined to consider dismissal of the action (Earl Wayne Pullen, dba Carole & Jan's Moving & Storage, v. TransGuard Insurance Company of America Inc., et al., No. 17-08631, C.D. Calif., 2018 U.S. Dist. LEXIS 21177).
LINCOLN, Neb. - A reinsurer moved for summary judgment on Feb. 9 in Nebraska federal court, arguing that a promissory note executed pursuant to a reinsurance participation agreement (RPA) is void and unenforceable as a matter of public policy (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15-90, D. Neb.).
NEW YORK - The Second Circuit U.S. Court of Appeals on Feb. 8 affirmed a lower federal court's ruling in favor of a general liability insurer in an insured's declaratory judgment lawsuit seeking coverage for an underlying civil lawsuit, finding that the policy limits coverage for mental injury to mental injury that results from bodily injury (The Incorporated Village of Old Westbury v. American Alternative Insurance Corp., No. 17-1275, 2nd Cir., 2018 U.S. App. LEXIS 3177).
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Feb. 12 affirmed a district court's ruling that a disability insurer's termination of benefits was not arbitrary and capricious because the claimant failed to prove that she suffered solely from a physical disability that precluded her from performing the duties of any occupation (Serilyn Krash v. Reliance Standard Life Insurance Group, No. 17-1814, 3rd Cir., 2018 U.S. App. LEXIS 3240).
TRENTON, N.J. - An auto insurer is liable for personal injury protection (PIP) benefits for an unnamed additional insured under terms of a voided insurance contract, a New Jersey appeals panel affirmed Feb. 8 (Tyrone S. Henry Sr., et al. v. Santosh S. Bhowmik, et al., No. A-3331-15T4, N.J. Super., App. Div., 2018 N.J. Super. Unpub. LEXIS 286).
BRIDGEPORT, Conn. - A Connecticut federal judge on Feb. 8 granted an insurer's motion to dismiss its insureds' amended complaint seeking damages as a result of defective concrete used in their home's foundation after determining that the insureds failed to carry their burden of proving that coverage is afforded under the policy and that the insurer acted in bad faith when it denied their claim (Joseph Mazzarella, et al. v. Amica Mutual Insurance Co., No. 17-598, D. Conn., 2018 U.S. Dist. LEXIS 20737).
BIRMINGHAM, Ala. - An insurer's suit seeking a declaration that no coverage is owed for underlying claims arising out of exposure to lime quarry dust must be dismissed in deference to the additional insured's suit filed in Alabama state court against the insurer and others because Alabama has a substantial interest in litigating claims in state court, an Alabama federal judge said Feb. 9 (The Charter Oak Fire Insurance Co. v. G&R Mineral Services Inc., et al., No. 17-752, N.D. Ala., 2018 U.S. Dist. LEXIS 21533).
MIAMI - An insurance company has no duty to defend a general contractor accused in an underlying suit of construction defects, a federal judge in Florida ruled Feb. 7, holding that the "your work" exclusion to the policy warrants a denial of coverage (Mid-Continent Casualty Company v. JWN Construction Inc., et al., No. 17-CV-80286, S.D. Fla., 2018 U.S. Dist. LEXIS 20529).
CINCINNATI - In a dispute between an insolvent insurer's liquidator and an administrative services provider over whether work for the insurer should be arbitrated, the Sixth Circuit U.S. Court of Appeals held Feb. 9 that the McCarran-Ferguson Act does not reverse-preempt the enforcement of a contractual arbitration clause under the Federal Arbitration Act (FAA) (Nancy G. Atkins, liquidator of Kentucky Health Cooperative Inc. v. CGI Technologies and Solutions Inc., No. 17-5506, 6th Cir., 2018 U.S. App. LEXIS 3130).
NEW YORK - A federal judge in Connecticut did not err when finding that investors in three stranger obtained life insurance (STOLI) policies were victims under the Mandatory Victim Restitution Act (MVRA) and ordering a man who pleaded guilty to insurance fraud to pay $1.9 million in restitution, a Second Circuit U.S. Court of Appeals panel held Feb. 9, explaining that investors would not have given the defendant their money if they were aware of the scheme (United States of America v. David Quatrella, No. 17-1786-cr, 2nd Cir., 2018 U.S. App. LEXIS 3189).
CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on Feb. 6 reinstated a class suit accusing an insurance company of breaching its long-term care policy by doubling an insured's premiums after she turned 67, ruling that the lead named plaintiff is entitled to relief on her contract claim and that, as a result, dismissal of the remaining claims was premature (Margery Newman, et al. v. Metropolitan Life Insurance Company, No. 17-1844, 7th Cir., 2018 U.S. App. LEXIS 2890).
LOS ANGELES - A California federal judge on Feb. 6 denied a motion to transfer a disability claimant's suit to Pennsylvania federal court because the defendants failed to prove that transferring the suit would serve the convenience of the parties and would promote the interests of justice (Stephanie Stefan v. Life Insurance Company of North America, et al., No. 17-6165, C.D. Calif., 2018 U.S. Dist. LEXIS 20356).
ALBUQUERQUE, N.M. - A New Mexico federal judge on Feb. 6 ruled in favor of an errors and omissions insurer in a title services company insured's lawsuit alleging breach of contract, bad faith and violation of New Mexico's Unfair Claims Practices Act (Aztec Abstract & Title Insurance, Inc. v. Maxum Specialty Group & Maxum Indemnity Co., No. 16-103, D. N.M., 2018 U.S. Dist. LEXIS 19305).
NEW YORK - A surgeon who was found guilty of one count of health care fraud, three counts of making false statements related to health care matters and two counts of money laundering was sentenced by a federal judge in New York on Feb. 7 to 196 months in prison and ordered to pay $7.2 million in restitution (United States of America v. Syed I. Ahmed, No. 17cr277, E.D. Mich.).
CHICAGO - In a lawsuit alleging a kickback scheme in lender-placed insurance, an Illinois federal judge on Feb. 8 dismissed most of the claims except for breach of contract and bad faith claims pertaining to alleged overcharging of nonexistent inspections (Mariusz Dolegiewicz v. U.S. Bank Trust, N.A., et al., No. 17-4737, N.D. Ill., 2018 U.S. Dist. LEXIS 21089).
PITTSBURGH - An insured is not in contractual privity with a reinsurer under an insurance policy or a reinsurance agreement, a Pennsylvania federal judge held Feb. 8, dismissing breach of contract, bad faith and civil conspiracy claims (Three Rivers Hydroponics LLC v. Florists' Mutual Insurance Co., et al., No. 15-00809, W.D. Pa., 2018 U.S. Dist. LEXIS 20699).
TAMPA, Fla. - An insurer and an out-of-network health care provider engaged in a battle over what constitutes the proper reimbursement rate under Florida law and whether those claims implicate ERISA asked a federal court to dismiss the case with prejudice on Feb. 7 (Premier Inpatient Partners LLC, et al. v. Blue Cross and Blue Shield of Florida Inc., Nos. 17-3000, 17-3001, M.D. Fla.).
MADISON, Wis. - Three attorneys who represented a man during his prosecution for submitting fraudulent automobile insurance claims provided him effective assistance, a federal judge in Wisconsin ruled Feb. 7 in denying a motion to vacate his sentence, holding that any issues that arose during the proceedings stemmed from his dishonesty with the court (John E. Henricks III v. United States of America, No. 17-cv-630, W.D. Wis., 2018 U.S. Dist. LEXIS 19668).
MIAMI - Finding that "collapse" is not defined in an "all-risk" insurance policy, a Florida federal magistrate judge on Feb. 5 held that an insurer is obligated to cover sagging and falling down ceilings at a condominium complex (Key Biscayne Ambassador Condominium Association Inc. v. Aspen Specialty Insurance Co., No. 16-24564, S.D. Fla., 2018 U.S. Dist. LEXIS 19440).
SAN FRANCISCO - A claim for pension disability benefits was properly denied because the disability claimant failed to submit medical records detailing his disability as requested on multiple occasions by the plan at issue, a California federal judge said Feb. 6 (Vanmark Strickland v. AT&T Pension Benefit Plan, No. 17-01393, N.D. Calif., 2018 U.S. Dist. LEXIS 19566).
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Feb. 6 affirmed a lower federal court's finding that there is no coverage under a financial institution bond for a bank's $7.77 million loss caused by the purported fraudulent lending activities of its former employee, concluding that the bond does not consider commissions a type of financial benefit that triggers coverage (Renasant Bank v. St. Paul Mercury Insurance Co., No. 17-60168, 5th Cir., 2018 U.S. App. LEXIS 2903).