LexisNexis® Legal Newsroom
    Mealey's Insurance - Termination Of LTD Benefits Based On Policy Limitation Was Reasonable

    ALEXANDRIA, Va. - A Virginia federal judge on May 29 granted a disability insurer's motion for summary judgment after determining that the insurer's termination of benefits based on the policy's mental and nervous disorder limitation was reasonable and not an abuse of discretion (Roger D. Shepard v. Liberty Life Assurance Company of Boston, No. 17-1055, E.D. Va., 2018 U.S. Dist. LEXIS 89241).

    Mealey's Insurance - High Court's Review Of 9th Circuit's Offset Ruling Not Warranted, Plan Says

    WASHINGTON, D.C. - The U.S. Supreme Court should deny a disability claimant's petition for writ of certiorari in a dispute over the offsetting of a claimant's long-term disability (LTD) benefits to account for Social Security disability income (SSDI) benefits received on behalf of the claimant's dependents because the plan administrators applied the language of the LTD plan as written, the defendants maintain in a May 25 response brief (Susan Rene Jones v. Merck Sharpe & Dohme Corp., et al., No. 17-1478, U.S. Sup.).

    Mealey's Insurance - Panel: Mitigation Costs Are Not 'Necessary Expenses' Under Business Income Coverage

    ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on May 25 affirmed a lower federal court's ruling that a manufacturer insured's $14 million in unpaid mitigation costs were not "necessary expenses" under a commercial insurance policy's business income coverage, finding that "necessary expenses" are limited to expenses that reduce a covered business income loss (Welspun Pipes, Inc., et al. v. Liberty Mutual Fire Insurance Company, No. 17-1470, 8th Cir., 2018 U.S. App. LEXIS 13926).

    Mealey's Insurance - Justice Orders Limited Class Action Against Medical Insurer In Rehabilitation

    CONCORD, N.H. - A New Hampshire trial justice ordered a limited fund class action on May 24 against the excess funds the New Hampshire insurance commissioner seeks to tender in the winding down of a risk-sharing plan for a medical malpractice insurer (Georgia A. Tuttle, M.D., et al. v. New Hampshire Medical Malpractice Joint Underwriting Association and In the Matter of the Winding Down of the New Hampshire Medical Malpractice Joint Underwriting Association, No. 2015-347, N.H. Super., Merrimack Co., 2018 N.H. Super. LEXIS 12).

    Mealey's Insurance - Delaware Judge Refuses To Set Judgment Against Excess Insurers In Asbestos Suit

    WILMINGTON, Del. - A Delaware state judge on May 23 denied an insured's motion to set a judgment amount against its excess insurers in an asbestos coverage dispute and award prejudgment interest under New York law because the insured sought only a declaratory judgment of its coverage rights and did not seek breach of contract damages, which are necessary for the court to award prejudgment interest (Viking Pump Inc. et al., v. Century Indemnity Co. et al., No. N10C-06-141, Del. Sup., New Castle Co., 2018 Del. Super. LEXIS 220).

    Mealey's Insurance - Federal Judge Upholds Dismissal Of RESPA Claims Against Banks, Reinsurer

    PHILADELPHIA - A Pennsylvania federal judge on May 24 refused to reconsider his ruling dismissing claims for violations of the Real Estate Settlement Procedures Act (RESPA) and unjust enrichment filed by homeowners in a putative class action alleging a captive reinsurance scheme between banks and an affiliated reinsurer (Christopher Blake, et al. v. JPMorgan Chase Bank, N.A., et al., No. 13-6433, E.D. Pa., 2018 U.S. Dist. LEXIS 87428).

    Mealey's Insurance - High Court Refuses To Find Whether Insured Vs. Insured Exclusion Bars FDIC's Claims

    WASHINGTON, D.C. - The U.S. Supreme Court on May 29 denied a directors and officers liability insurer's petition for writ of certiorari asking it to determine whether claims brought by the Federal Deposit Insurance Corp. in its capacity as receiver of an insolvent bank constitute claims brought "by" or "on behalf of" the bank (Certain Underwriters at Lloyd's, London v. Federal Deposit Insurance Corporation, et al., No. 17-1451, U.S. Sup.).

    Mealey's Insurance - On Magistrate's Recommendation, Judge Rejects Motion To Add Bad Faith Claim

    DENVER - Adopting a magistrate's recommendation, a federal judge in Colorado on May 24 denied insureds' motion for leave to amend their complaint in a dispute over coverage for more than $1.8 million in undelivered fine wine (Malik M. Hasan, M.D., et al. v. AIG Property Casualty Co., No. 16-02963, D. Colo., 2018 U.S. Dist. LEXIS 77435).

    Mealey's Insurance - No Coverage Owed For 2016 Colorado Ski Accident, Federal Judge Rules

    DENVER - A Colorado federal judge on May 22 found that an insurer has no duty to defend and indemnify its insured against an underlying lawsuit arising from a ski accident that occurred in March 2016, granting the insurer's motion for summary judgment in its declaratory judgment lawsuit (Philadelphia Indemnity Insurance Company v. North Texas Annual Conference of the United Methodist Church, Inc., et al., No. 16-02984, D. Colo., 2018 U.S. Dist. LEXIS 85680).

    Mealey's Insurance - Insolvent Insurer's Policy Does Not Cover Personal Injury Suit, Panel Finds

    CHICAGO - A Chicago cab company was not covered by the Illinois Insurance Guaranty Fund (IIGF) under an insolvent insurer's policy for an underlying personal injury lawsuit because the accident occurred outside the time the subject taxi was covered, an Illinois appeals panel affirmed May 23 (The Illinois Insurance Guaranty Fund v. Israel P. Nwidor, et al., No. 1-17-1378, Ill. App., 1st Dist., Div. 3, 2018 Ill. App. LEXIS 301).

    Mealey's Insurance - Surgery Center's Consumer Fraud Counterclaim Against Insurers Dismissed By Judge

    CHICAGO - A surgery center failed to sufficiently state a claim against two insurance companies for violating the Illinois Consumer Fraud Act (ICFA), a federal judge in Illinois ruled May 24, holding that the insurers' alleged misrepresentations to the center about whether its procedures were covered did not harm the patient population (Connecticut General Life Insurance Co., et al. v. Southwest Surgery Center LLC, No. 14-cv-8777, N.D. Ill., 2018 U.S. Dist. LEXIS 87551).

    Mealey's Insurance - Insurer Owes No Additional Coverage For Mold Damage, Federal Judge Determines

    CAMDEN, N.J. - An insurer did not breach its contract or act in bad faith when it limited its payment for mold damage within an insured home because the policy at issue included a provision limiting coverage for mold damage, a New Jersey federal judge said May 23 (Charles Hobbs, et al. v. US Coastal Insurance Co., No. 17-3673, D. N.J., 2018 U.S. Dist. LEXIS 86484).

    Mealey's Insurance - Panel Reverses Dismissal Of Trust From Insolvent Insurer's Liquidator's Suit

    COLUMBIA, S.C. - The South Carolina Court of Appeals on May 23 reversed a trial judge's dismissal of a dissolved self-insurance trust from a liquidator's declaratory judgment action over an insolvent insurer's coverage obligations for workers' compensation claims because it was not within the judge's discretion to answer the novel question on whether a trust can be sued after it has voluntarily dissolved (Raymond G. Farmer v. CAGC Insurance Co., et al., No. 2016-000192, S.C. App., 2018 S.C. App. LEXIS 36).

    Mealey's Insurance - Stockholders Sue Financial Company's Directors For Breach Of Fiduciary Duty

    WILMINGTON, Del. - Stockholders in a May 21 complaint filed in a Delaware court accuse the directors of a financial company operating in the insurance and reinsurance business of breaching their fiduciary duty by transferring the value of stocks to their benefit (Icahn Partners LP, et al. v. Barry D. Zyskind, et al., No. 2018-0358, Del. Chanc.).

    Mealey's Insurance - Louisiana Panel Affirms Grant Of Peremptory Exception Of Res Judicata To Insurer

    SHREVEPORT, La. - A Louisiana appeals panel on May 23 affirmed a lower court's ruling that granted the peremptory exception of res judicata filed by an insurer and dismissed with prejudice an underlying lawsuit seeking penalties and damages for an insurer's alleged failure to timely pay medical malpractice insurance settlement proceeds (Oliver Barnett, et al. v. Louisiana Medical Mutual Insurance Company, No. 51,908-CA, La. App., 2nd Cir., 2018 La. App. LEXIS 994).

    Mealey's Insurance - Judge Refuses To Reconsider Denial Of Summary Judgment Motion In Reinsurance Case

    SYRACUSE, N.Y. - In a dispute over whether a reinsurer is obligated to pay an insurer's defense expenses arising from a $3.2 million asbestos claims settlement, a New York federal judge on May 23 declined to reconsider an earlier finding of ambiguity in the reinsurance certificate provisions (Utica Mutual Insurance Co. v. Munich Reinsurance America Inc., Nos. 12-00196 & 13-00743, N.D. N.Y.).

    Mealey's Insurance - Former NFL Player Files Class Action, Alleges Plan Breached Fiduciary Duties

    NEW YORK - A former National Football League player on May 22 filed suit in New York federal court, alleging that the NFL's retirement plan and its fiduciaries duty violated the Employee Retirement Income Security Act by refusing to reclassify players' disability benefits as football degenerative (FD) benefits despite evidence showing that the disabilities suffered by players were caused by numerous hits to the head and concussions sustained while playing in the NFL (Christopher Hudson, et al., v. National Football League Management Council, et al., No. 18-4483, S.D. N.Y.).

    Mealey's Insurance - Panel: Attorney's Alleged Conduct Is Excluded From Professional Liability Coverage

    SPRINGFIELD, Ill. - An Illinois appeals panel on May 22 held that underlying allegations against an attorney insured are barred by an "intentional acts" exclusion in a professional liability insurance policy, reversing the lower court (Illinois State Bar Association Mutual Insurance Company v. Leighton Legal Group, LLC, et al., No. 4-17-0548, Ill. App., 4th Dist., 2018 Ill. App. LEXIS 304).

    Mealey's Insurance - Coverage Claims Arising From Alleged Theft Are Time-Barred, 9th Circuit Affirms

    PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 21 affirmed a lower federal court's finding that insureds' bad faith, breach of contract and negligence claims arising from an alleged theft loss are time-barred (Dean Seymour, et al. v. State Farm General Insurance Company, No. 17-5529, 9th Cir., 2018 U.S. App. LEXIS 13166).

    Mealey's Insurance - Judge Limits Liberty Mutual's Defenses Against Window Maker's Bad Faith Suit

    TAMPA, Fla. - A federal judge in Florida on May 18 granted in part motions for partial summary judgment filed by a window and door manufacturer seeking recovery of $3 million it paid to resolve five defects lawsuits in Alabama state court, finding that its insurer, Liberty Mutual Fire Insurance Co., could not raise defenses of res judicata, contributory bad faith, comparative bad faith and mitigation (MI Windows & Doors LLC, et al. v. Liberty Mutual Fire Insurance Co., No. 14-cv-3139-T-23MAP, M.D. Fla., 2018 U.S. Dist. LEXIS 83918).

    Mealey's Insurance - Insurer's Denial Of Coverage Under Exclusion Was Not In Bad Faith, Judge Rules

    SCRANTON, Pa. - A water exclusion in a homeowners insurance policy is unambiguous and precluded coverage for damages caused when sewage backed up into an insured's basement; as a result, an insurer did not act in bad faith in denying coverage, a federal judge in Pennsylvania ruled May 21 in granting the insurer's motion for summary judgment (Audrey Sank v. Allstate Insurance Co., No. 16-1620, M.D. Pa., 2018 U.S. Dist. LEXIS 84943).

    Mealey's Insurance - 2nd Circuit Upholds Sentence For 'Brazen' Employment Insurance Fraud Scheme

    NEW YORK - A Second Circuit U.S. Court of Appeals panel on May 21 upheld a federal judge in New York's decision to sentence a man who pleaded guilty to fraudulently procuring $13,961 in unemployment insurance benefits from the New York Department of Labor while working as a correctional officer to six months in prison, holding that the judge sufficiently explained that the sentence was based on the brazen nature of the offense (United States v. Andrew Kessler, No. 17-2317-cr, 2nd Cir., 2018 U.S. App. LEXIS 13088).

    Mealey's Insurance - Panel Reverses No Coverage Ruling For False Claims Act Suit Against Office Depot

    PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 21 found that a lower federal court erred in holding that an insurer has no duty to defend or indemnify Office Depot Inc. in an underlying qui tam lawsuit, reversing and remanding (Office Depot Inc. v. AIG Specialty Insurance Company, No. 17-55125, 9th Cir., 2018 U.S. App. LEXIS 13136).

    Mealey's Insurance - Billing Practices Are Not Professional Services Under Policy, 10th Circuit Affirms

    DENVER - The 10th Circuit U.S. Court of Appeals on May 22 affirmed a lower federal court's finding that an insurer had no duty to defend against an underlying class action or the Colorado attorney general's investigation of a law firm insured because the underlying claims arose from billing practices, which are not professional services under the insurance policy (Evanston Insurance Company v. Law Office of Michael P. Medved, et al., No. 16-1464, 10th Cir., 2018 U.S. App. LEXIS 13270).

    Mealey's Insurance - Homeowner Alleges Illegal Kickback Scheme Involving Reinsurance Payments

    LOS ANGELES - A homeowner filed a class action complaint on May 17 against a mortgage loan company and financial services company for engaging in an illegal kickback scheme involving reinsurance payments arising out of force-placed hazard insurance policies (Kathleen Angel Eisenberg v. Ocwen Loan Servicing LLC, et al., No. 18-04157, C.D. Calif.).