LexisNexis® Legal Newsroom
    Mealey's Insurance - Real Estate Property Managed Endorsement Rendered Policies Excess, Judge Rules

    SACRAMENTO, Calif. - A California federal judge on Nov. 2 held that a Real Estate Property Managed endorsement rendered an insurer's policies excess with respect to an underlying personal injury claim, finding that the insurer has no duty to defend or indemnity its property manager insured (Atain Specialty Insurance Co. v. Sierra Pacific Management Co., et al., No. 14-00609, E.D. Calif.; 2016 U.S. Dist. LEXIS 152874).

    Mealey's Insurance - Insurer Must Pay Portion Of Award For Taxable Costs In Defects Dispute, Panel Says

    DENVER - Having defended a developer in arbitration proceedings related to construction defects claims, a commercial general liability insurer is obligated to pay its portion of an award for taxable costs issued against the developer and a contractor, a Colorado appeals panel ruled Nov. 3, affirming partial summary judgment to the contractor (Mt. Hawley Insurance Co. v. Casson Duncan Construction Inc., No. 2016COA164, Colo. App.; 2016 Colo. App. LEXIS 1545).

    Mealey's Insurance - Claims Arising Out Of Cracked Basement Walls Will Proceed To Trial, Federal Judge Says

    BRIDGEPORT, Conn. - A Connecticut federal judge on Nov. 3 denied an insurer's motion for reconsideration after determining that the insurer failed to identify any controlling decisions that were overlooked when the court determined that insureds' claims arising out of cracks discovered in their home's basement walls must proceed to trial (Stephen Belz and Karla Belz v. Peerless Insurance Co., No. 13-01315, D. Conn.; 2016 U.S. Dist. LEXIS 152493).

    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 Insurance - Plan Defendants Argue Plan Is Not Bound By SSA's Disability Onset Date

    RICHMOND, Va. - A district court misinterpreted a disability plan's provisions when it determined that the plan and its administrator are bound by the disability onset date determined by the Social Security Administration (SSA), the plan defendants argue in a Nov. 2 brief filed in the Fourth Circuit U.S. Court of Appeals (Jesse Solomon v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al., No. 16-1730, 4th Cir.).

    Mealey's Insurance - Judge Rules On Motions To Bar Competing Expert Witnesses In Bad Faith Dispute

    CHICAGO - An Illinois federal judge on Nov. 2 granted in part dueling motions to bar expert witnesses in a breach of contract and bad faith coverage dispute arising from a $14 million consent judgment entered against an insured (Ray A. Fox, by and through his guardian, Rose Fox v. Admiral Insurance Co., No. 12-8740, N.D. Ill., Eastern Div.; 2016 U.S. Dist. LEXIS 151738).

    Mealey's Insurance - No Coverage For Foundation Damage Caused By Plumbing Leaks, Federal Judge Says

    DALLAS - No coverage is afforded to insureds for foundation damage caused by plumbing leaks in their home because the policy specifically excludes coverage for foundation or earth movement and the policy's limited water damage endorsement does not extend coverage for foundation movement, a Texas federal judge said Nov. 2 (John F. Thomas, et al. v. State Farm Lloyds, et al., No. 15-1937, N.D. Texas; 2016 U.S. Dist. LEXIS 152318).

    Mealey's Insurance - Insurer Owes Defense Costs For Covered Faulty Work, Iowa Federal Judge Holds

    DES MOINES, Iowa - Under Iowa law, claims against an insured for defective workmanship that resulted in water damage to property other than the insured's work constitute an "occurrence" under comprehensive general liability policies, an Iowa federal judge ruled Nov. 1, finding that the insurer is responsible for most of the defense costs in underlying product liability lawsuits (Pella Corp., et al. v. Liberty Mutual Insurance Co., No. 11-00273, S.D. Iowa).

    Mealey's Insurance - Washington High Court Answers 3 Certified Questions In Embezzlement Coverage Suit

    OLYMPIA, Wash. - The Washington Supreme Court on Nov. 3 responded to three certified questions submitted by a federal district court in an insurer's lawsuit seeking recovery from a bank for losses arising from embezzlement committed by the insured's employee (Travelers Casualty & Surety Co. v. Washington Trust Bank, No. 92483-0, Wash. Sup.).

    Mealey's Insurance - Insurers Say Settlement Between Liquidator And Insured Has No Effect On Them

    CONCORD, N.H. - Two insurers told a New Hampshire court on Nov. 1 that the proposed settlement between the liquidator of an insolvent insurer and a shared insured does not change anything regarding the insurers' relationship with their insured or the insolvent insurer (In the Matter of the Liquidation of The Home Insurance Company, No. 03-E-0106, N.H. Sup., Merrimack Co.).

    Mealey's Insurance - Insurer Argues Settlement Agreement Barred Claims For Cleanup Costs

    CINCINNATI - An insurer argues in a Nov. 1 response brief to the Sixth Circuit U.S. Court of Appeals that a district court correctly found that a 1994 settlement agreement bars coverage for any future claims arising out of coverage for environmental cleanup costs incurred by the insured at a Superfund site in Texas (Arrowood Indemnity Company v. Lubrizol Corporation, No. 16-3463, 6th Cir.).

    Mealey's Insurance - Judge Rejects Insurer's Amount In Controversy Argument In Bad Faith Suit

    LAS VEGAS - Ruling that an insurer has failed to show by a preponderance of the evidence that the amount in controversy in an insurance breach of contract and bad faith lawsuit exceeds $75,000, a federal judge in Nevada on Nov. 1 remanded the action to state court (Junette Boyden v. State Farm Mutual Automobile Insurance Co., No. 16-1876, D. Nev.; 2016 U.S. Dist. LEXIS 151204).

    Mealey's Insurance - Panel: Plaintiffs Failed To Move To Delay Ruling On Motion On Bad Faith Claim

    PORTLAND, Ore. - A federal judge did not err in granting summary judgment in favor of an insurer on an insurance bad faith claim because insureds failed to oppose summary judgment on the basis that they needed more evidence or file a Federal Rule of Civil Procedure 56(d) motion seeking more time to collect the necessary evidence, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 1 (Sonia Braun-Salinas, et al. v. American Family Insurance Group, No. 14-35369, 9th Cir.).

    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.).