LexisNexis® Legal Newsroom
    Mealey's Insurance - Separation Of Claims In Bad Faith Suit Not Needed, Federal Judge Rules

    ALLENTOWN, Pa. - A federal judge in Pennsylvania on Jan. 19 denied an insurer's motion to reconsider a ruling denying its motion to separate claims in an insurance breach of contract and bad faith lawsuit, ruling that the insurer failed to show that the stay was needed (Heather Wagner, et al. v. Allstate Insurance Co., No. 14-7326, E.D. Pa.; 2016 U.S. Dist. LEXIS 6364).

    Mealey's Insurance - Federal Judge: Insurer Has Duty To Defend Defective Mattress Class Action Complaint

    SAN FRANCISCO - A California federal judge held Jan. 20 that a comprehensive general liability insurer has a duty to defend its insured against an underlying consumer class action lawsuit alleging that the insured's mattresses were defective (Hartford Fire Insurance Co. v. Tempur-Sealy International Inc., et al., No. 14-cv-01661-HSG, N.D. Calif.; 2016 U.S. Dist. LEXIS 6706).

    Mealey's Insurance - Reinsurer Sues Reinsureds Over $5 Million Asbestos- Related Claim

    NEW YORK - A reinsurer on Jan. 20 sued a number of insurers and an insurance/reinsurance administrator in a New York federal court regarding certain asbestos-related claims; the reinsurer asked for declarations that it is not obligated to pay the reinsured's expenses related to the underlying claims (INA Reinsurance Co., n/k/a R&Q Reinsurance Company v. Granite State Insurance Company, et al., No. 16-cv-00419, S.D. N.Y.).

    Mealey's Insurance - Judge Adopts Recommendation To Award Credit Union $47,399 In Fees, Costs

    HONOLULU - A Hawaii federal judge on Jan. 15 adopted a magistrate's findings of fact and recommendation to award a credit union insured $47,399.75 in attorney fees and costs arising from a third-party complaint filed by its independent external auditor (CUMIS Insurance Society Inc. v. CU Pacific Audit Solutions LLC, et al., No. 14-00140, D. Hawaii; 2016 U.S. Dist. LEXIS 5605).

    Mealey's Insurance - Federal Magistrate Refuses To Alter Security Posted In Blood Contamination Suit

    CHICAGO - An Illinois federal magistrate judge on Jan. 19 refused to alter the amount of security posted by an insurer in a suit seeking coverage for the contamination of the insured's blood products because altering the amount would involve resolving issues that must be resolved by a jury or federal judge (Baxter International Inc., v. AXA Versicherung, No. 11-cv-09131, N.D. Ill.; 2016 U.S. Dist. LEXIS 6223).

    Mealey's Insurance - Reinsurer Must Indemnify Insurer For Expenses, New York Federal Judge Says

    ALBANY, N.Y. - A reinsurer must indemnify an insurer for settlement expenses incurred in settling asbestos bodily injury claims filed against an insured because the follow-the-settlement doctrine applies and the insurer's billings are clearly within the scope of coverage under the reinsurance certificates, a New York federal judge said Jan. 20 (Utica Mutual Insurance Co. v. Clearwater Insurance Co., No. 13-1178, N.D. N.Y.; 2016 U.S. Dist. LEXIS 6219).

    Mealey's Insurance - Judge Denies Insured's Motion To Remand In Insurance Bad Faith Suit

    HAMMOND, Ind. - A federal judge in Indiana on Jan. 16 denied an insured's motion to remand an insurance breach of contract and bad faith lawsuit back to state court, ruling that an insurance agent was fraudulently joined in the litigation and that the amount in controversy exceeds statutory minimums (Anthony Ramirez v. State Farm Mutual Automobile Insurance Co., et al., No. 15-449, N.D. Ind.; 2016 U.S. Dist. LEXIS 5245).

    Mealey's Insurance - 10th Circuit Panel Partially Reverses District Court's Ruling In Bad Faith Suit

    DENVER - A federal district court erred in granting summary judgment in an insurance breach of contract and bad faith lawsuit because it is unclear whether an insured had an affirmative duty to inform his insurer that he had incorporated a company he used to purchase a commercial general liability policy from the insurer, a 10th Circuit U.S. Court of Appeals panel ruled Jan. 20 in partially reversing the district court's opinion (Corey Christy v. Travelers Indemnity Company of America, No. 14-2168, 10th Cir.; 2016 U.S. App. LEXIS 891).

    Mealey's Insurance - Judge: Fact Issues Exist On Whether Contractor's Work Was Faulty To Treatment Plant

    MONROE, La. - Issues of material fact exist as to whether a contractor's construction efforts to repair a water treatment plant were defective, faulty or inadequate, a Louisiana federal judge held Jan. 19, denying summary judgment to the insurer on a claim for the cost of aggregate surface and site repair (Tensas Water Distribution Association, Inc. v. Arch Insurance Co., No. 14-1787, W.D. La.; 2016 U.S. Dist. LEXIS 6125).

    Mealey's Insurance - Federal Judge Refuses To Disturb Ruling That Insurer Has Duty To Defend

    CHICAGO - An Illinois federal judge on Jan. 15 denied a law enforcement liability insurer's motion to reconsider a Dec. 11, 2014, ruling that the insurer's duty to defend was triggered by an underlying claim that the use of a wrongfully convicted man's coerced confession violated his Fifth Amendment self-incrimination rights (Westport Insurance Corporation v. City of Waukegan, et al., No. 14-cv-419, N.D. Ill., Eastern Div.; 2016 U.S. Dist. LEXIS 5216).

    Mealey's Insurance - Judge Rejects Liquidating Agent's Demand For $5M In Employee Dishonesty Coverage

    CLEVELAND - An Ohio federal judge on Jan. 14 held that the liquidating agent of an insolvent credit union is not entitled to $5 million in employee dishonesty coverage under a fidelity bond issued to the credit union for losses arising from an employee's alleged fraudulent scheme (National Credit Union Administration Board v. CUMIS Insurance Society Inc., No. 11-1739, N.D. Ohio, Eastern Div.; 2016 U.S. Dist. LEXIS 4880).

    Mealey's Insurance - DOJ: California Hospital To Pay $3.2M To Settle Claims Over Illegal Referrals

    WASHINGTON, D.C. - The U.S Department of Justice (DOJ) announced Jan. 15 that a California hospital has agreed to pay $3.2 million to resolve allegations that it violated the Stark Law and False Claims Act by maintaining financial arrangements with referring physicians.

    Mealey's Insurance - New Jersey Supreme Court Reinstates Man's Conviction For Insurance Fraud

    TRENTON, N.J. - A unanimous New Jersey Supreme Court on Jan. 19 reinstated a man's conviction for second-degree insurance fraud, holding that a person violates the state's insurance fraud statute even if the person's misrepresentation does not result in an insurance carrier's payment on the fraudulent claim (State of New Jersey v. Robert Goodwin, No. A-20 September Term 2014, 074352, N.J. Sup.; 2016 N.J. LEXIS 7).

    Mealey's Insurance - Insurer Has No Duty To Indemnify SAG For $330,000 Award, 9th Circuit Affirms

    PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Jan. 15 affirmed a lower federal court's finding that a directors and officers and entity liability insurer has no duty to indemnify the Screen Actors Guild American Federation of Radio and Television Artists (SAG) for $330,000 awarded to an actor and SAG member who filed a class action lawsuit seeking recovery of the class' share of "foreign levy funds" (Screen Actors Guild-American Federation of Television and Radio Artists v. Federal Insurance Co., No. 13-56402, 9th Cir.; 2016 U.S. App. LEXIS 765).

    Mealey's Insurance - Professional Liability Coverage Owed To Innocent Co-Insureds, 4th Circuit Rules

    RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals Jan. 15 affirmed a lower federal court's ruling that South Carolina law and equity principles dictate that an imposter's fraudulent misrepresentations on a professional liability insurance application should not void the policy for the imposter's innocent employer and fellow employees (Evanston Insurance Co. v. Agape Senior Primary Care, et al., No. 14-2268, 4th Cir.; 2016 U.S. App. LEXIS 703).

    Mealey's Insurance - Panel Reverses $25,000 Award For Insured's Contents Loss In Hurricane Isaac Suit

    NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Jan. 15 reversed a lower federal court's $25,000 award plus interest in favor of an insured in a dispute over contents loss coverage, finding that the insured failed to submit the required signed proof of loss for the claimed damages stemming from Hurricane Isaac (Elvin Cummings v. Fidelity National Indemnity Insurance Co., No. 14-31125, 5th Cir.; 2016 U.S. App. LEXIS 723).

    Mealey's Insurance - U.K. Company Appeals Remand Of Reinsurance Dispute

    CHICAGO - A U.K. company that allegedly assumed the obligations of a reinsurer appealed the remand of a reinsurance dispute to the Seventh Circuit U.S. Court of Appeals on Jan. 12 (Pine Top Receivables of Illinois, LLC v. Transfercom, Ltd., No. 15-cv-8908, N.D. Ill.).

    Mealey's Insurance - Reinsured Says Reinsurance Dispute Should Be Heard In Pennsylvania

    PHILADELPHIA - An insurer told a federal court in Pennsylvania on Jan. 13 that the Pennsylvania court is a better venue for a reinsurance dispute than a federal court in Illinois, where its alleged reinsurer filed a parallel suit (St. Paul Fire and Marine Insurance Company v. R&Q Reinsurance Company, No. 15-cv-5528, E.D. Pa.).

    Mealey's Insurance - Michigan Panel Reverses Coverage Ruling Based On Minor's Deposition Testimony

    DETROIT - A Michigan appeals court on Jan. 12 found that a minor's deposition testimony establishes that he "reasonably should have expected" to injure another minor when he committed sexual misconduct against her, reversing a lower court's ruling that coverage was owed for the underlying lawsuit (Home-Owners Insurance Co., et al. v Kristen Smith, et al., No. 322694, Mich. App.; 2016 Mich. App. LEXIS 56).

    Mealey's Insurance - Texas High Court Dismisses Hotel Tax Liability Coverage Suit After Parties Settle

    AUSTIN, Texas - The Texas Supreme Court dismissed an insurer's appeal in a dispute over excess coverage for defense costs incurred in an underlying lawsuit alleging that the insured failed to fully remit hotel taxes, according to its Jan. 15 pronouncement (Illinois Union Insurance Co. v. Sabre Holdings Corporation, et al., No. 15-0716, Texas Sup.).

    Mealey's Insurance - Judge: Insurers Have To Show Damages Against Contractors For Fraud Repair Estimates

    NEW YORK - Insurers have the burden to prove damages, under both the breach of fiduciary duty burden shifting and the wrongdoer rule, against contractors for allegedly submitted fraudulent estimated for repairs to insured home losses, a New York federal judge ruled Jan. 12 (Federal Insurance Co., et al. v. Paul H. Mertz, Jr., et al., No. 12-1597, S.D. N.Y.; 2016 U.S. Dist. LEXIS 4019).

    Mealey's Insurance - Judge Refuses To Alter Man's Sentence For Committing Arson, Insurance Fraud

    DETROIT - A federal judge in Michigan on Jan. 13 denied a man's motion to vacate or correct his sentence of 1,647 months in prison after being found guilty of 33 counts of violating federal law for his role in an arson and insurance fraud scheme, holding that 18 U.S. Code Section 844(h) required consecutive sentences for seven counts of using fire to commit fraud (United States of America v. Ali Darwich, No. 15-12243, E.D. Mich.; 2016 U.S. Dist. LEXIS 4084).

    Mealey's Insurance - Wisconsin Federal Judge Vacates Judgment To Allow Parties To Settle Dispute

    MILWAUKEE - A Wisconsin federal judge on Jan. 11 agreed to vacate his judgment in a disability benefits case in order to allow the parties to settle the dispute because a settlement is in the best interests of all parties and conserves judicial resources (Jill M. Lundsten v. Creative Community Living Services Inc., et al,, No. 13-108, E.D. Wis.; 2016 U.S. Dist. LEXIS 3077).

    Mealey's Insurance - Weight Of Factors Warrants Transfer Of Disability Suit, Kentucky Federal Judge Says

    LOUISVILLE, Ky. - A Kentucky federal judge on Jan. 12 granted an insurer's motion to transfer a disability claimant's suit to Virginia federal court because the weight of private and public interest factors warrants transferring the suit (Diane Coffey v. Hartford Life & Accident Insurance Co., No. 15-378, W.D. Ky.; 2016 U.S. Dist. LEXIS 3352).

    Mealey's Insurance - Insurers: Amended Counterclaim Is 'Replete With Hyperbole,' Borrowed 'Buzzwords'

    FORT PIERCE, Fla. - Insurers on Jan. 11 moved to dismiss a manufacturer insured's amended counterclaim in a breach of contract and bad faith dispute, arguing that the counterclaim fails because the purported improper conduct concerns their calculation of unpaid premium and not the denial of coverage (Wausau Underwriters Insurance Co. and The First Liberty Insurance Corp. v. Danfoss, LLC, No. 14-14420, S.D. Fla.).