LexisNexis® Legal Newsroom
    Mealey's Insurance - Majority Reverses Ruling Against Insurer In Dispute Over Professional Services

    NEW ORLEANS - A majority of the Fifth Circuit U.S. Court of Appeals on Nov. 2 reversed a lower federal court's finding that an underlying claim against an attorney insured is integral to and cannot be divorced from the legal services he performed for his client, rendering judgment in favor of a professional liability insurer (Thomas R. Edwards v. Continental Casualty Co., No. 15-3082, 5th Cir.; 2016 U.S. App. LEXIS 19753).

    Mealey's Insurance - High Court Hears Arguments Over Sanctions For False Claims Act's Seal Requirement

    WASHINGTON, D.C. - The U.S. Supreme Court heard arguments Nov. 1 from an insurer, the relators in a qui tam action against that insurer, and the U.S. government over what the appropriate sanctions should be when relators in a False Claims Act (FCA) suit violate that statute's requirement that the complaint and filings remain sealed (State Farm Fire & Casualty Co. v. United States, ex rel. Cori Rigsby, et al., No. 15-513, U.S. Sup.).

    Mealey's Insurance - Continuous Injury Exclusion Bars Coverage For Insured's Defects, Judge Concludes

    SACRAMENTO, Calif. - A "continuous or progressive injury" (CP) exclusion precludes coverage in most of the various underlying construction defects lawsuits filed against two insured subcontractors, a California federal judge ruled Oct. 31 (American Zurich Insurance Co., et al. v. Ironshore Specialty Insurance Co., No. 14-00060, E.D. Calif.; 2016 U.S. Dist. LEXIS 150684).

    Mealey's Insurance - Termination Of Benefits Was Reasonable, Majority Of 9th Circuit Panel Determines

    SAN FRANCISCO - The majority of a Ninth Circuit U.S. Court of Appeals panel on Oct. 28 denied a disability claimant's motion for rehearing and reiterated that the termination of the claimant's benefits was reasonable because the claimant did not undergo an independent medical exam as requested by the insurer and as required under the plan (Curtis F. Lee v. ING Groep, N.V., et al., No. 14-15848, 9th Cir.; 2016 U.S. App. LEXIS 19513).

    Mealey's Insurance - Bank, Receiver Never Acquired Right To Enforce Crime Bond, 10th Circuit Affirms

    DENVER - The 10th Circuit U.S. Court of Appeals on Nov. 1 affirmed a lower federal court's finding that because coverage never vested before the Federal Deposit Insurance Corp. (FDIC) took over a bankrupt bank, the bank and consequently the FDIC never acquired the right to enforce a financial institution crime bond (Federal Deposit Insurance Corporation v. Kansas Bankers Surety Co., No. 15-1390, 10th Cir.; 2016 U.S. App. LEXIS 19622).

    Mealey's Insurance - 1st Circuit Orders Hearing On Efficacy Of Counsel's Assistance In Fraud Plea

    BOSTON - A First Circuit U.S. Court of Appeals panel on Oct. 31 reversed a ruling denying a defendant's petition for a writ of coram nobis and ordered a federal judge in Puerto Rico to conduct an evidentiary hearing as to whether the man's counsel properly informed him that his decision to plead guilty to four counts of insurance fraud and mail fraud would bar him from becoming a U.S. citizen (United States of America v. Vincent F. Castro-Taveras, No. 14-1879, 1st Cir.; 2016 U.S. App. LEXIS 19561).

    Mealey's Insurance - Reinsurer Says Jurisdiction Issues Should Not Be Raised In Answer

    CHICAGO - A reinsurer told a federal court in Illinois on Oct. 28 that its reinsured's challenge to the court's jurisdiction voiced in an answer to an amended complaint is not proper because the court has already ruled against the reinsured's motion to transfer the case (R&Q Reinsurance Company v. The American Insurance Company, No. 16-cv-04199, N.D. Ill.).

    Mealey's Insurance - Insurer Asks Court To Deny Motion To Compel Discovery Brought By Reinsurer

    NEW HAVEN, Conn. - An insurer told a federal court in Connecticut on Oct. 31 that its reinsurer's motion to compel discovery should fail because the deadline for seeking discovery has passed and the material sought is privileged (Travelers Casualty and Surety Company, f/k/a The Aetna Casualty and Surety Company v. Century Indemnity Company as successor to Insurance Company of North America, No. 16-cv-00170, D. Conn.).

    Mealey's Insurance - Judge: Insurer's Removal Of Bad Faith Suit Was Outside Statute Of Limitations

    TULSA, Okla. - Remand of an insurance bad faith suit to state court is proper because an insurer's removal of the action based on diversity jurisdiction was done outside the one-year statute of limitations, a federal judge in Oklahoma ruled Oct. 27 (Sammi Higgins v. Philadelphia Indemnity Insurance Co., No. 16-0564, N.D. Okla.; 2016 U.S. Dist. LEXIS 148957).

    Mealey's Insurance - Contractor Cannot Recover Damages From Subcontractor's Insurer, Federal Judge Says

    CINCINNATI - A general contractor is not entitled to coverage from a subcontractor's insurer for a portion of damages awarded against the contractor for faulty workmanship by an arbitration panel because the water infiltration damages at issue did not occur during the insurer's policy period, an Ohio federal judge said Oct. 31 (The Weitz Co. LLC v. Acuity, No. 12-855, S.D. Ohio; 2016 U.S. Dist. LEXIS 150433).

    Mealey's Insurance - Louisiana Federal Judge Says Denial Of Motion To Amend Was Not Made In Error

    NEW ORLEANS - A Louisiana federal judge on Oct. 26 determined that a federal magistrate judge did not err in denying a plaintiff's motion to file a first amended complaint in an asbestos coverage dispute and noted that any amendment to the plaintiff's complaint would be futile (Jesse Frank Sheppard v. Liberty Mutual Insurance Co. et al., No. 16-2401, E.D. La.; 2016 U.S. Dist. LEXIS 147990).

    Mealey's Insurance - Judge Amends Judgment To State Confirmation Of Reinsurance Arbitration Awards

    NEW YORK - A federal judge in New York on Oct. 28 issued an amended judgment specifically noting that a pair of reinsurance arbitration awards were confirmed by the court (Nutmeg Insurance Company, et al. v. Employers Insurance of Wausau A Mutual Company, No. 16-cv-00317, S.D. N.Y.).

    Mealey's Insurance - Louisiana Federal Judge Denies Motion To Reconsider, Says Exclusion Does Not Apply

    NEW ORLEANS - A Louisiana federal judge on Oct. 27 denied an insurer's motion to reconsider a ruling that the insurer has a duty to defend the insured against one of two underlying suits filed by neighboring residents of the insured shipyard and reiterated that the policies' silica exclusion does not bar coverage for one of the underlying suits (Hanover Insurance Co. v. Superior Labor Services Inc., et al., No. 11-2375 c/w 14-1930, 14-1933, E.D. La.; 2016 U.S. Dist. LEXIS 148685).

    Mealey's Insurance - Federal Judge Approves $265 Million Settlement For Philadelphia Derailment

    PHILADELPHIA - The Pennsylvania federal judge overseeing the Philadelphia Amtrak train derailment multidistrict litigation on Oct. 27 approved a $265 million settlement between Amtrak and those injured and the families of those who died in the May 12, 2015, derailment (In re Amtrak Train Derailment in Philadelphia, PA, on May 12, 2015, No. 2654, E.D. Pa.).

    Mealey's Insurance - Reinsured Says Loss Expense Should Not Have Been Capped By Lower Court

    NEW YORK - An insurer argues in an Oct. 26 brief in the Second Circuit U.S. Court of Appeals that a lower court erred when it did not allow the insurer to present extrinsic evidence that would allegedly show that industry custom mandates that a reinsurer's obligations to pay its reinsured's underlying expenses should not be capped (Utica Mutual Insurance Company v. Clearwater Insurance Company, No. 16-cv-2824, 2nd Cir.).

    Mealey's Insurance - Magistrate: Insurer Has No Duty To Defend, Indemnify Suit Alleging Data Breach

    BIRMINGHAM, Ala. - A federal magistrate in Alabama on Oct. 25 found that an insurer has no duty to defend or indemnify against claims that confidential data of credit union customers was compromised after a grocery store insured's computer network was hacked (Camp's Grocery, Inc.v. State Farm Fire & Casualty Co., No. 16-0204, N.D. Ala., Middle Div.; 2016 U.S. Dist. LEXIS 147361).

    Mealey's Insurance - 9th Circuit: Earlier Ruling's Instructions Did Not Violate Ex Post Facto Clause

    SAN FRANCISCO - A Ninth Circuit U.S. Court of Appeals panel on Oct. 24 affirmed a man's 120-month sentence for health care fraud and conspiracy to commit health care fraud, holding that a federal judge in California properly allowed him to present evidence on intended loss and finding that the instructions in United States v. Popov (2015 U.S. App. LEXIS 2577) did not violate the ex post facto clause (United States of America v. Ramanathan Prakash, No. 14-10517, 9th Cir.; 2016 U.S. App. LEXIS 19143).

    Mealey's Insurance - 5th Circuit Panel Upholds 97-Month Sentence For Health Care Fraud

    NEW ORLEANS - A federal judge in Texas did not err when sentencing the "prime mover" of a Medicare fraud scheme to 97 months in prison by applying the 2009 U.S. Sentencing Guidelines Manual, a Fifth Circuit U.S. Court of Appeals panel ruled Oct. 26, holding that one of the charges against the defendant involved conduct that occurred after the guidelines amended the term "victim" to include a person whose identity was unlawfully used (United States of America v. Edgar Shakbazyan, No. 15-20426, 5th Cir.).

    Mealey's Insurance - Federal Magistrate Judge Denies Motion To Order IME For Failure To Serve Motion

    TAMPA, Fla. - Because a disability plan administrator was not served with a claimant's motion seeking an order requiring the plan administrator to reschedule and videotape an independent medical exam (IME), a Florida federal magistrate judge on Oct. 21 denied the claimant's motion without prejudice and allowed the claimant to refile and serve the motion on the plan administrator (Alexander Stratigos v. Prudential Insurance Company of America, No. 16-2780, M.D. Fla.; 2016 U.S. Dist. LEXIS 146094).

    Mealey's Insurance - Reinsurer Says Its Request For Reconsideration Of Discovery Orders Is Timely

    SYRACUSE, N.Y. - A reinsurer asked a federal court in New York on Oct. 21 for permission to file a reply to its reinsured's contention that the reinsurer's objections to a pair of discovery orders is untimely (Utica Mutual Insurance Company v. Century Indemnity Company, No. 13-cv-00995, N.D. N.Y.).

    Mealey's Insurance - Judge Finds Deficiencies In Amended Complaint In Coverage Dispute Over Data Breach

    FORT MYERS, Fla.- A federal judge in Florida on Oct. 24 dismissed without prejudice a primary and excess insurers' amended complaint seeking a declaration that they have no duty to defend or indemnify their cancer care service provider insured against underlying class action lawsuits stemming from a 2015 data breach, giving the insurers seven days to cure the deficiencies in their petition (The Charter Oak Fire Insurance Co., et al. v. 21st Century Oncology Investments, No. 16-00732, M.D. Fla.).

    Mealey's Insurance - Complaint Seeks Finding That Insurer Wrongfully Offset Veterans' Benefits

    BOSTON - A U.S. Army veteran filed a class action suit on Oct. 25 in Massachusetts federal court against a disability insurer, alleging that the insurer wrongfully offset disability benefits payable under the insurer's policy by disability benefits received from the U.S. Department of Veterans Affairs because the policy does not list veterans disability benefits as income eligible for an offset under the policy (Marco Martinez v. Sun Life Assurance Company of Canada, No. 16-12154, D. Mass.).

    Mealey's Insurance - Claimant Capable Of Working In Sedentary Position, Panel Affirms

    ATLANTA - A district court did not err in granting summary judgment in favor of an employer and a disability insurer because the evidence supported the disability insurer's conclusion that the disability claimant was capable of working in a sedentary position, the 11th Circuit U.S. Court of Appeals said Oct. 21 (Andrew Ramdeen v. Prudential Insurance Company of America, et al., No. 16-11179, 11th Cir.; 2016 U.S. App. LEXIS 18962).

    Mealey's Insurance - Judge: Insurers Did Not Act In Bad Faith In Failing To Pay Entire Settlement

    HONOLULU - An insured has failed to show that insurers acted in bad faith in failing to pay the entire amount of a settlement in a patent infringement lawsuit pursuant to the terms of a commercial liability insurance policy, a federal judge in Hawaii ruled Oct. 21 in dismissing the insured's insurance bad faith counterclaim (The Hanover Insurance Co., et al v. Anova Food LLC, No. 14-0281, D. Hawaii; 2016 U.S. Dist. LEXIS 146114).

    Mealey's Insurance - Judge Gives Insurers OK To Depose Individuals Regarding Jurisdiction

    ATLANTA - A federal judge in Georgia on Oct. 21 granted a pair of insurers' motion to depose certain people to determine if their alleged actions regarding a reinsurer fall under the jurisdiction of the Georgia federal court (Canal Insurance Company, et al. v. Golden Isles Reinsurance Company, Ltd, et al., No. 15-cv-3331, N.D. Ga.).