NEW ORLEANS - An insurer has no duty to defend its insured against an underlying suit filed by neighboring residents of the insured shipyard because the policies' silica exclusion clearly bars coverage; however, the insurer does have a duty to defend against a second underlying suit because the insurer failed to prove that the policies' pollution exclusion applies to bar coverage, a Louisiana federal judge said April 8 (Hanover Insurance Co. v. Superior Labor Services Inc., et al., No. 11-2375 c/w 14-1930, 14-1933, E.D. La.).
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on April 11 affirmed a lower federal court's ruling that an insurer has a duty to defend against an underlying class action lawsuit alleging that its insured failed to safeguard hospital patients' private medical records by posting them on the Internet for more than four months (The Travelers Indemnity Company of America v. Portal Healthcare Solutions, L.L.C., et al., No. 14-1944, 4th Cir.; 2016 U.S. App. LEXIS 6554).
NEW YORK - The assignee of certain reinsurance receivables told a federal court in New York on April 8 that the statute of limitations of its action against a reinsurance agent has not expired because it did not begin in 2004 but began when the agent repudiated its alleged fiduciary obligations to the assignee in 2015 (NEM Re Receivables LLC v. Fortress Re Inc., No. 15-cv-03875, S.D. N.Y.).
LAKELAND, Fla. - A Florida appeals panel on April 8 determined that a lower court erred in awarding monetary damages to insureds without recognizing the homeowners insurer's right to withhold payment for the cost of subsurface repairs until the insureds entered into a contract for those repairs, further finding that the trial court also erred in awarding prejudgment interest (Citizens Property Insurance Corp. v. Daniel Blaha and Clyndon Blaha, No. 2D14-939, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 5399).
ABINGDON, Va. - A federal judge in Virginia on April 7 ruled that the owners of a laboratory that conducted drug screenings were guilty of health care fraud and conspiracy of committing health care fraud, ruling that the defendants orchestrated a scheme to submit claims to TennCare, Medicare, Virginia Medicaid and private insurers for drug tests that were not medically necessary (United States of America v. Beth Palin, et al., No. 14cr00023, W.D. Va.; 2016 U.S. Dist. LEXIS 46939).
NEW YORK - A reinsurer asked a federal court in New York on April 5 to enforce its earlier order confirming an arbitration award and direct an international insurer to pay the reinsurer more than $460,000 in fees and costs incurred in a different, but allegedly related, litigation (National Indemnity Company v. IRB Brasil Resseguros S.A., No. 15-cv-03975, S.D. N.Y.).
BALTIMORE - A federal judge in Maryland on April 6 dismissed an insured's claims for bad faith and violation of the Maryland Consumer Protection Act (MCPA) in an insurance breach of contract and bad faith lawsuit, ruling that Maryland law "does not recognize first party tort actions against insurers for failure to settle insurance claims" (Joe Gladney v. American Western Home Insurance Co., No. 15-1559, D. Md.; 2016 U.S. Dist. LEXIS 46310).
SALT LAKE CITY - A federal judge in Utah on April 5 granted an insurer's motion for summary judgment in an insurance bad faith lawsuit, ruling that the insurer did not act in bad faith in handling a claim under a financial services liability insurance policy because the insurer engaged in a "robust analysis" through a law firm before denying the claim (James Morden, et al. v. XL Specialty Insurance, No. 14-0224, D. Utah; 2016 U.S. Dist. LEXIS 42601).
SAN FRANCISCO - Because a claim for intentional infliction of emotional distress is only "tangentially related" to the administration of a disability plan, a claim for intentional infliction of emotional distress alleged against a disability insurer is not preempted by the Employee Retirement Income Security Act, a California federal judge said April 4 (John Kresich v. Metropolitan Life Insurance Co.,, No. 15-5801, N.D. Calif.; 2016 U.S. Dist. LEXIS 45503).
PHILADELPHIA - A reinsurance premium recovery company told a federal court in Pennsylvania on April 4 that current Federal Rules of Civil Procedure do not require it to ask for leave to file an amended complaint, contrary to contentions by a reinsurance broker, its alleged controlling owner and two of the reinsurance broker's employees (Boomerang Recoveries, LLC v. Guy Carpenter & Company LLC, et al., No. 16-cv-00222, E.D. Pa.).
NEW HAVEN, Conn. - A Connecticut federal judge on April 5 held that there are genuine issues of material fact as to whether an employment practices liability insurer's investigation of an unlawful discharge claim was reasonable, sufficient and/or properly conducted, allowing part of a claim that the insurer violated Connecticut Unfair Insurance Practices Act (CUIPA) and the Connecticut Unfair Trade Practices Act (CUTPA) to proceed (Teri Tucker v. American International Group Inc., et al., No. 09-1499, D. Conn.; 2016 U.S. Dist. LEXIS 46676).
BROOKLYN, N.Y. - A New York appeals panel on April 6 affirmed a lower court's ruling that an insurer has no duty to provide coverage to its insured for water damages caused by the collapse of a retaining wall, rejecting the insured's argument that the insurer is precluded from relying on the policy's flood/surface water exclusion to deny coverage (The Provencal LLC v. Tower Insurance Company of New York, et al., No. 2015-00192, N.Y. Sup., App. Div., 2nd Dept.; 2016 N.Y. App. Div. LEXIS 2529).
MADISON, Wis. - A reinsurer asked a federal court in Wisconsin on April 1 to appoint an arbitration umpire, claiming that two party-appointed arbitrators have failed to agree on an umpire (Employers Insurance of Wausau f/d/a Employers Insurance of Wausau a Mutual Company v. Continental Casualty Company, No. 16-cv-00205, W.D. Wis.).
DALLAS - A federal judge in Texas on April 5 dismissed an insured's counterclaims for bad faith and for violation of Texas law and the Texas Insurance Code, ruling that the insured lacks a viable counterclaim for breach of the implied covenant of good faith and fair dealing (Atlantic Casualty Insurance Co. v. PrimeLending Inc., et al., No. 15-1475, N.D. Texas; 2016 U.S. Dist. LEXIS 45780).
ALBANY, N.Y. - A reinsurer told a federal court in New York on April 1 that its reinsured's prejudgment interest calculation of more than $800,000 should be revised (Utica Mutual Insurance Co. v. Clearwater Insurance Co., No. 13-1178, N.D. N.Y.).
PORTLAND, Ore. - An Oregon federal magistrate judge on March 31 granted an insurer's motion for partial summary judgment, but only as it pertained to classifying costs incurred in a settlement with the U.S. Environmental Protection Agency as indemnity costs rather than defense costs (Siltronic Corp. v. Employers Insurance Company of Wausau, et al., No. 11-1493, D. Ore.; 2016 U.S. Dist. LEXIS 43400).
TALLAHASSEE, Fla. - A Florida appeals panel on April 4 held that the "insured versus insured" exclusion in a directors and officers liability insurance policy precludes coverage for an underlying judgment in excess of $1 million arising from a stock buyback (Dennis Durant v. Brian James and Progressive Casualty Insurance Co., No. 1D15-3075, Fla. App., 1st Dist.).
CHICAGO - A federal judge in Illinois on March 30 ordered the transfer of a $4.4 million asbestos-related reinsurance dispute to a Pennsylvania federal court, noting that the Pennsylvania court is a more proper venue than Illinois (R&Q Reinsurance Company v. St. Paul Fire & Marine Insurance Company, No. 15-cv-07784, N.D. Ill.; 2016 U.S. Dist. LEXIS 42489).
CHICAGO - An Illinois appeals panel held on March 30 that a commercial general liability insurer is not obligated to indemnify its insured's assignee for an underlying $4 million settlement over a "blast fax" ads dispute, noting as an aside its concern that underlying Telephone Consumer Protection Act (TCPA) class lawsuits are not about compensating class members but have everything to do with compensating the class action lawyers (First Mercury Insurance Co. v. Nationwide Security Services Inc., et al., No. 1-14-3924, Ill. App., 1st Dist., Div. 3; 2016 Ill. App. Unpub. LEXIS 636).
SPOKANE, Wash. - A federal judge in Washington on March 30 denied an insurer's motion for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that a genuine issue of material fact exists as to whether the insurer breached the insurance contract and acted in bad faith in its handling of an insured's claim under a professional malpractice policy (Workland & Witherspoon PLLC v. Evanston Insurance Co., No. 14-403, E.D. Wash.; 2016 U.S. Dist. LEXIS 42637).
HAMMOND, Ind. - A federal judge in Indiana on March 31 granted an insurer's motion for partial summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that the plaintiff may not sue the insurer for bad faith because she is a third-party beneficiary and not a named insured pursuant to the insurance contract (Jessica Martinez v. State Farm Mutual Automobile Insurance Co., No. 15-137, N.D. Ind.; 2016 U.S. Dist. LEXIS 42956).
SCRANTON, Pa. - A Pennsylvania federal judge on March 30 held that whether one insured reimburses all or none of the $50,000 it was ordered to pay its insurer for the advancement of defense costs in an underlying criminal proceeding, the insurer has a duty to pay a second insured up to the $100,000 limit of liability pursuant to a public officials liability and employment practices liability insurance policy (Darwin National Assurance Co. v. Luzerne County Transportation Authority, et al., No. 14-2417, M.D. Pa.; 2016 U.S. Dist. LEXIS 41733).
CHICAGO - Insurance policies do not cover a settlement of an underlying claim against a subcontractor stemming from its defective workmanship, an Illinois federal judge held March 31, because claims of an insured's faulty work resulting in damage to its own work do not constitute an "occurrence" causing covered "property damage" (Allied Property & Casualty Insurance Co. and AMCO Insurance Co. v. Metro North Condominium Association, No. 15-3925, N.D. Ill.; 2016 U.S. Dist. LEXIS 43952).
PORTLAND, Ore. - Allegations of continuing damage arising from construction defects triggered an insurer's duty to defend, an Oregon federal judge ruled March 29, finding that a misrepresentation claim can give rise to a claim for negligent, rather than intentional, misrepresentation, (Colony Specialty Insurance Co. v. Mutual of Enumclaw Insurance Co., No. 15-00783, D. Ore.; 2016 U.S. Dist. LEXIS 41927).
PHILADELPHIA - A general contractor and a developer are not necessary parties to a reimbursement lawsuit between an insurer who paid the developer's water damage claims and the contractor's insurers allegedly responsible for the costs, a Pennsylvania federal judge ruled March 30, declining to dismiss the case (Philadelphia Indemnity Insurance Co. v. Admiral Insurance Co. and The Ohio Casualty Insurance Co., No. 15-3486, E.D. Pa.; 2016 U.S. Dist. LEXIS 42593).