LexisNexis® Legal Newsroom
    Mealey's Insurance - 9th Circuit Precedent Prohibits Remand In Bad Faith Suit, Judge Rules

    LAS VEGAS - A federal district court has diversity jurisdiction over an insurance bad faith lawsuit pursuant to Ninth Circuit U.S. Court of Appeals precedent, a federal judge in Nevada ruled June 12 in denying an insured's motion to remand the action to state court (Shawn Ruybal v. Liberty Mutual Fire Insurance Co., et al., No. 15-0508, D. Nev.; 2015 U.S. Dist. LEXIS 77143).

    Mealey's Insurance - Insurer Says Cited Authority Cannot Be Stricken As It Is Not Evidence

    SYRACUSE, N.Y. - An insurer told a federal court in New York on June 15 that documents attached to a motion for reconsideration represent secondary authority and not new evidence and, therefore, should not be stricken (Utica Mutual Insurance Company v. Clearwater Insurance Company, No. 13-cv-01178, N.D. N.Y.).

    Mealey's Insurance - Insurer Did Not Act In Bad Faith In Not Settling Defects Suit, Judge Finds

    SAN FRANCISCO - An insurer did not act in bad faith by failing to settle an underlying construction defects case and did not breach its insurance contract by refusing to defend an insured's surety in the underlying case, a California federal judge ruled June 15 (JDS Builders Group Inc. v. Scottsdale Insurance Co., No. 15-00297, N.D. Calif.; 2015 U.S. Dist. LEXIS 77291).

    Mealey's Insurance - Panel: Insurer Has No Duty To Defend Claims Of Insured's Failure To Ensure Bonds

    SAN FRANCISCO - A professional liability insurer had no duty to defend and indemnify underlying claims arising out of an insured's alleged failure to ensure that surety bonds remained effective until construction was complete, the Ninth Circuit U.S. Court of Appeals affirmed June 15, finding that a bond exclusion barred coverage (VierraMoore Inc. v. Continental Casualty Co., No. 13-15981, 9th Cir.; 2015 U.S. App. LEXIS 10045).

    Mealey's Insurance - Illinois Appeals Panel Says Appeal Is Moot, Stay Will Be Lifted By Trial Court

    CHICAGO - The First District Illinois Appellate Court on June 12 refused to rule on an appeal regarding a motion to intervene because the trial court stayed the suit until a similar suit was decided and did not have the opportunity to rule on the motion to intervene filed by an underlying plaintiff seeking damages for injuries arising out of the exposure to various chemicals at the insured's facilities (Motorola Solutions Inc. v. Continental Casualty Co., et al., Nos. 1-13-1724, 1-13-1725, Ill. App., 1st Dist., 5th Div.; 2015 Ill. App. Unpub. LEXIS 1296).

    Mealey's Insurance - Pennsylvania Federal Judge Finds Insured's Evidence Supports Its Coverage Claims

    PHILADELPHIA - A Pennsylvania federal judge on June 12 denied an insurer's motion to preclude an insured from offering evidence at trial of any underlying asbestos-related claims for which coverage has not been established after determining that the insured can present sufficient evidence in support of its claims (General Refractories Company v. First State Insurance Co., et al., No. 2:04-cv-3509, E.D. Pa.; 2015 U.S. Dist. LEXIS 76175).

    Mealey's Insurance - 3rd Circuit Remands Bad Faith Suit To District Court For New Trial

    PHILADELPHIA - Ruling that an "insured cannot skirt the punitive damages to its insurer," a Third Circuit U.S. Court of Appeals panel on June 12 vacated and remanded an insurance bad faith lawsuit to a federal district court for a new trial (Jared Wolfe v. Allstate Property & Casualty Insurance Co., No. 12-4450, 3rd Cir.; 2015 U.S. App. LEXIS 9876).

    Mealey's Insurance - Government Files Intervener Complaint In Suit Against Ambulance Service Company

    JACKSONVILLE, Fla. - The federal government filed an intervener complaint in Florida federal court on June 12 in a False Claims Act (FCA) and Anti-Kickback Statute lawsuit brought against an ambulance service company accused of engaging in a 10-year scheme in which it fraudulently billed Medicare for services that were medically unnecessary (United States of America v. Liberty Ambulance Services Inc., No. 15-cv-, M.D. Fla.).

    Mealey's Insurance - Homeowners Raise Fact Issues In Inverse Condemnation Suit, Texas Majority Affirms

    AUSTIN, Texas - A majority of the Texas Supreme Court held June 12 that homeowners in the upper White Oak Bayou watershed area of Texas have demonstrated that a fact question exists as to whether the government entities were substantially certain that their actions in approving new upstream development without properly mitigating it would cause their homes to flood, affirming a lower court's ruling that fact issues preclude summary judgment in an inverse condemnation lawsuit (Harris County Flood Control District and Harris County, Texas v. Edward A. and Norma Kerr, et al., No. 13-0303, Texas Sup.; 2015 Tex. LEXIS 545).

    Mealey's Insurance - Reinsurer Says Dispute Should Be Heard In Pennsylvania And Not In Connecticut

    PHILADELPHIA - A reinsurer argued in a federal court in Pennsylvania on June 11 that Pennsylvania is the logical location to hear a dispute, not Connecticut, as argued by its reinsureds (Excalibur Reinsurance Corporation v. Select Insurance Company, et al., No. 15-cv-02522, E.D. Pa.).

    Mealey's Insurance - Judge Finds Insurance Fraud Defendant's Counsel Was Effective During Trial

    BOSTON - A federal judge in Massachusetts on June 12 denied a man's request to vacate his sentence due to the alleged ineffectiveness of his trial counsel, holding that the outcome of the trial would not have been different if the attorney called the witnesses suggested by the defendant and let the defendant testify in his own defense (United States of America v. Patrick Gelin, No. 08-10133-GAO, D. Mass.; 2015 U.S. Dist. LEXIS 76382).

    Mealey's Insurance - Florida Panel: Fact Issue As To Proper Subsurface Repair Method Requires Reversal

    LAKELAND, Fla. - A Florida appeals panel on June 12 reversed in part a lower court's final judgment in favor of homeowners insurer in a coverage dispute over sinkhole damage (David Sanchez, et al. v. Royal Palm Insurance Co., No. 2D13-4852, Fla. App., 2nd Dist.; 2015 Fla. App. LEXIS 8991).

    Mealey's Insurance - Panel: Insurer Had Duty To Reimburse Hail Damage To Roof, Did Not Act In Bad Faith

    CHICAGO - Although an insurer had a duty to reimburse an insured for a new roof following damage from a hailstorm, the insurer did not act in bad faith in denying the claim, the Seventh Circuit U.S. Court of Appeals affirmed June 11 (Advance Cable Company LLC and Pinehurst Commercial Investments LLC v. Cincinnati Insurance Co., Nos. 14-2620 & 14-2748, 7th Cir.; 2015 U.S. App. LEXIS 9805).

    Mealey's Insurance - Judge: Doctor's Alleged Sexual Misconduct Does Not Constitute Professional Service

    DALLAS - A patient's underlying allegations of assault and nonconsensual sex against her primary care physician do not relate to his rendering of professional services under a professional liability insurance policy, Texas federal judge held June 10, granting the insurer's motion for summary judgment in a declaratory judgment lawsuit (The Medical Protective Co. v. David L. Turner, et al., No. 15-0366, N.D. Texas; 2015 U.S. Dist. LEXIS 75390).

    Mealey's Insurance - Insurers Have No Duty To Defend, Indemnify Faulty Work Claims, Judge Says

    SAN FRANCISCO - Insurers have no duty to defend or indemnify repair costs incurred in remediating subcontractors' faulty work on floor tiles, a California federal judge ruled June 11, finding that faulty workmanship exclusions bar coverage (American Home Assurance Co., et al. v. SMG Stone Company Inc., et al., No. 13-04953, N.D. Calif.; 2015 U.S. Dist. LEXIS 75910).

    Mealey's Insurance - Reinsurers Seek Confirmation Of Environmental Losses- Related Arbitration Award

    BOSTON - A group of London market reinsurance syndicates asked a federal court in Massachusetts on June 11 to confirm an arbitration award regarding certain environmental loss claims against a company insured by the syndicates' reinsured (Certain Underwriters at Lloyd's, London v. Transport Insurance Company, No. 15-cv-12313, D. Mass.).

    Mealey's Insurance - Judge Orders Insurers To Brief Self-Insured Retention Issue For Defects Lawsuit

    FRESNO, Calif. - A California federal judge on June 10 ordered two commercial general liability insurers to brief the issue of whether any one of the $10,000 self-insured retentions (SIR) in a policy on a "per-home" basis was met regarding the defense of a contractor accused of faulty construction in homes (Evanston Insurance Co. v. North American Capacity Insurance Co., No. 13-01365, E.D. Calif.; 2015 U.S. Dist. LEXIS 75265).

    Mealey's Insurance - Panel: Insurer Has Duty To Defend Negligence Claim Against Additional Insured

    RICHMOND, Va. - An insurer has a duty to defend allegations that an additional insured's negligence caused a building collapse, the Fourth Circuit U.S. Court of Appeals ruled June 10, finding that the scope of coverage under an endorsement extends beyond acts or omissions of the named insured for which the additional insured was vicariously liable (Capital City Real Estate LLC v. Certain Underwriters at Lloyd's London, subscribing to Policy Number: ARTE018240, No. 14-1239, 4th Cir.; 2015 U.S. App. LEXIS 9662).

    Mealey's Insurance - Contractual Liability Exclusion 'Squarely Applies' To Bar Coverage, Panel Affirms

    PHILADELPHIA - The Third Circuit U.S. Court of Appeals on June 11 affirmed a lower federal court's ruling that a contractual liability exclusion bars directors and officers liability coverage for underlying claims arising from the insured's contracts for foreign exchange transactions with four banks (PNY Technologies Inc., et al. v. Twin City Fire Ins. Co., No. 14-3624, 3rd Cir.; 2015 U.S. App. LEXIS 9781).

    Mealey's Insurance - No Coverage Available For Mold Growth In Insured's Attic, New Jersey Panel Says

    TRENTON, N.J. - No coverage is provided for mold growth in a home's attic because the insureds failed to prove that the mold growth was a result of a "fortuitous, direct physical loss," the New Jersey Superior Court Appellate Division said June 10 (Sheldon and Shirley Kavesh v. Franklin Mutual Insurance Co., No. A-5210-13T1, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1378).

    Mealey's Insurance - Delaware Court Asks New York To Weigh In On Asbestos-Insurance Dispute

    WILMINGTON, Del. - The Delaware Supreme Court on June 10 certified questions to New York's top court about whether all sums or pro rata allocation governs an insurance dispute and how insurance policy exhaustion affects access to excess policies. The long-running dispute involves insurance coverage for asbestos claims against Viking Pump Inc. and Warren Pumps LLC (Viking Pump Inc. v. Century Indemnity Co., et al. Warren Pumps LLC v. Century Indemnity Co., et al., Viking Pump Inc. v. John Crane Inc., Houdaille Industries Inc., No. 518,2014; 523,2014; 525,2014; 528,2014, Del. Sup.; 2015 Del. LEXIS 278).

    Mealey's Insurance - Excess Coverage Limited To $5M, Panel Affirms In Suit Arising From Flash Fire Deaths

    NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on June 10 found that excess insurance policies must be read "in conjunction" with a Master Service Agreement (MSA) between a well owner and another company, and, as a result, the well owner's excess coverage for two flash fire fatalities is limited to $5 million (Ironshore Specialty Insurance Co. v. Aspen Underwriting, Limited, et al., No. 13-51027, 5th Cir.; 2015 U.S. App. LEXIS 9696).

    Mealey's Insurance - 1st Circuit Affirms Conviction, Sentencing Of Health Care Fraud Defendant

    BOSTON - A First Circuit U.S. Court of Appeals panel on June 10 affirmed the conviction and sentencing of man found guilty for his role in a scheme of fraudulently billing Medicare for durable medical equipment (DME), finding that the judge presiding over the case did not err in any of his evidentiary rulings and used the proper guidelines when determining his sentence (United States of America v. Blessing Sydney Iwuala, No. 13-2497, 1st Cir.; 2015 U.S. App. LEXIS 9685).

    Mealey's Insurance - Magistrate Judge Declares Certain Reinsurance Discovery Material Confidential

    SYRACUSE, N.Y. - A federal magistrate judge in New York on June 10 ordered that certain discovery material produced in a reinsurance dispute may be designated by the parties as confidential (Utica Mutual Insurance Company v. R&Q Reinsurance Company, No. 15-cv-00270, N.D. N.Y.).

    Mealey's Insurance - 11th Circuit: Insurer Has Duty To Indemnify Breach Of Contract Jury Verdict

    ATLANTA - A commercial general liability insurer has a duty to indemnify an underlying breach of contract jury verdict entered against an insured regarding roof replacement work that allegedly caused leaking because the conduct was accidental, the 11th Circuit U.S. Court of Appeals ruled June 10, finding that a "contractual liability" exclusion does not apply (Pennsylvania National Mutual Casualty Insurance Co. v. St. Catherine of Siena Parish and Kiker Corp., No. 14-12151, 11th Cir.; 2015 U.S. App. LEXIS 9659).