LexisNexis® Legal Newsroom
    Mealey's Insurance - Florida Panel Affirms Rulings In Sinkhole Coverage Dispute

    LAKELAND, Fla. - A Florida appeals panel on Oct. 30 affirmed a lower court's final judgment entered in favor of insureds in a sinkhole coverage dispute, further affirming its denial of the insureds request for $75,918.06 in prejudgment interest (Citizens Property Insurance Corp. v. German Alvarez, et al., No. 2D13-5125, Fla. App., 2nd Dist.; 2015 Fla. App. LEXIS 16136).

    Mealey's Insurance - Claims Adjuster Properly Joined In Bad Faith Suit, Federal Judge Rules

    SAN ANTONIO - Remand of an insurance bad faith lawsuit to state court is proper because an insured has shown that an insurer's claims adjuster was proper joined in the lawsuit, a federal judge in Texas ruled in an opinion made available Nov. 2 (Spar Enterprises LP, d/b/a Hampton Inn Hotel, v. The Cincinnati Insurance Co., et al., No. 15-0661, W.D. Texas; 2015 U.S. Dist. LEXIS 147814).

    Mealey's Insurance - Judge Orders Insurer Into Rehabilitation, Enjoins Other Actions

    MASON, Mich. - A Michigan judge on Oct. 29 ordered an insurer into rehabilitation, finding that the insurer's financial condition is hazardous to policyholders (Patrick McPharlin, Director of the Department of Insurance and Financial Services v. Affirmative Insurance Company of Michigan, No. 15-898-CR, Mich. Cir., Ingham Co.).

    Mealey's Insurance - Denial Of Punitive Damages In Carbon Monoxide Suit Was Not Unreasonable, Insurers Say

    CHEYENNE, Wyo. - Because punitive damage awards are excluded from coverage, the insurers' refusal to pay punitive damages in connection with an underlying carbon monoxide poisoning claim was not unreasonable, the insurers argue in their Oct. 30 opposition to an insured's motion for summary judgment filed in Wyoming federal court (Interstate Fire & Casualty Co. and Fireman's Fund Insurance Co. v. Apartment Management Consultants LLC, et al., No. 13-00278, D. Wyo.).

    Mealey's Insurance - Contingent Extra Expense Coverage Exists For Insured's Oil Spill, Federal Judge Finds

    EL DORADO, Ark. - An insured is entitled to contingent extra expense (CEE) coverage for damages suffered as a result of an oil pipeline rupture, an Arkansas federal judge ruled Nov. 2, finding that certain coverage grants are subject only to the policies' total $700 million limit (Lion Oil Co. v. National Union Fire Insurance Company of Pittsburgh, PA, et al., No. 13-1071, W.D. Ark.).

    Mealey's Insurance - Appellate Panel Affirms Trial Court Asbestos- Related Reinsurance Decision

    NEW YORK - A New York appeals panel on Oct. 29 affirmed a lower court, holding that evidence on the reasonableness of a group of reinsureds' allocation of a settlement amount to asbestos-insurance claims is contrary to an earlier appeals court decision (United States Fidelity & Guaranty Company, et al. v. American Re-Insurance Company, et al., No. 604517/02, N.Y. Sup., App. Div., 1st Dept.; 2015 N.Y. App. Div. LEXIS 7979).

    Mealey's Insurance - N.Y. Justice Again Dismisses Breach Of Contract Claim In Superstorm Sandy Dispute

    NEW YORK - A New York justice on Oct. 29 granted for the third time a building manager's motion to dismiss a breach of contract claim brought by the building's owner in a coverage dispute over Superstorm Sandy property damage (Orient Overseas Associates v. XL Insurance America, Inc., et al., No. 652292/2013, N.Y. Sup., New York Co.).

    Mealey's Insurance - Plaintiff Lacks Valid Claim In Insurance Bad Faith Suit, Federal Judge Rules

    SAN JOSE, Calif. - Judgment on the pleadings in an insurance bad faith lawsuit is proper because the plaintiff failed to show that she has a valid claim under California law, a federal judge in California ruled Oct. 29 (Celia Stauty Luis v. Metropolitan Life Insurance Co., No. 14-4436, N.D. Calif.; 2015 U.S. Dist. LEXIS 147747).

    Mealey's Insurance - Judge Denies Summary Judgment To Insurers In Window Defects Suit

    MADISON, Wis. - A Wisconsin federal judge on Nov. 2 denied summary judgment to insurers on their declaratory judgment claim seeking a declaration of no duty to defend or indemnify a proposed class action lawsuit against a window company for alleged defects in windows (Mary Haley, et al. v. Kolbe & Kolbe Millwork Co. Inc., Fireman's Fund Insurance Co. and United States Fire Insurance Co., No. 14-99, W.D. Wis.; 2015 U.S. Dist. LEXIS 148023).

    Mealey's Insurance - Insurer Has Duty To Pay Builder For $2M In Defect Damages, Federal Judge Says

    CHARLESTON, S.C. - A commercial general liability insurer owes $2 million in coverage for an underlying construction defects case, a South Carolina federal judge ruled Nov. 2, finding that a jury must decide a dispute between a builder and its insurer over who should pay a $55 million judgment for defective condo repairs (East Bridge Lofts Property Owners Association Inc., et al. v. Crum & Forster Specialty Insurance Co., No. 14-2567, D. S.C.).

    Mealey's Insurance - No Coverage For Losses Over Failed Production Of Bottled Beverage, Panel Affirms

    BOSTON - A Massachusetts appeals panel on Nov. 2 affirmed a lower court's ruling that an insurance policy's faulty workmanship exclusion bars coverage for an insured's losses arising from the failed production of 40 million bottles of a milk-based specialty drink (H.P. Hood LLC v. Allianz Global Risks US Insurance Co., No. 14-P-1605, Mass. App.; 2015 Mass. App. LEXIS 175).

    Mealey's Insurance - Judge Orders Excess Insurer To Pay $3.4M For Defect Damages

    PHOENIX - An excess insurer owes $3.4 million to the owner of an apartment complex for damages arising out of construction defects, an Arizona federal judge ruled Oct. 30, ordering that the amount of the judgment is subject to prejudgment interest (Lexington Insurance Co. v. Scott Homes Multifamily Inc. and Silverbell 290 Limited Partnership, No. 12-02119, D. Ariz.; 2015 U.S. Dist. LEXIS 147509).

    Mealey's Insurance - Claims Administrator Of Parties To Reinsurance Program Dismissed From Case

    NEW YORK - A federal judge in New York on Oct. 28 dismissed all claims against a third-party claims administrator in a case alleging that a pair of insurers were fraudulently induced to become parties to a reinsurance program (AmTrust North America, Inc., et al. v. Safebuilt Insurance Services, Inc., et al., No. 14-cv-9494, S.D. N.Y.; 2015 U.S. Dist. LEXIS 147628).

    Mealey's Insurance - Additional Insureds Failed To Allege Breach Of Contract, Bad Faith Claims, Judge Says

    SAN DIEGO - Additional insureds failed to assert counterclaims for declaratory relief, breach of contract and breach of the implied covenant of good faith and fair dealing against its commercial general liability insurer, a California federal judge ruled Oct. 28, dismissing the counterclaims (St. Paul Mercury Insurance Co. v. McMillin Homes Construction, Inc., et al., No. 15-1548, S.D. Calif.; 2015 U.S. Dist. LEXIS 147082).

    Mealey's Insurance - Judge Awards Insured $23M For Repairs To Defective Work On Condo Project

    MIAMI - A commercial general liability insurer owes $23 million in indemnification coverage to a general contractor for repairs it made to fix deficient subcontractor work in a condominium complex, a Florida federal judge ruled Oct. 29, finding that coverage is required since the repairs addressed ongoing damage to nondefective property (Pavarani Construction Co. and Steadfast Insurance Co. v. ACE American Insurance Co., No. 14-20524, S.D. Fla.).

    Mealey's Insurance - Judge Orders Insurer, Insured To Appraise Dispute Over Cause Of Loss For Leak

    MIAMI - A Florida federal judge on Oct. 28 ordered an insurer and its insured to proceed to appraisal to resolve a dispute on the amount of loss attributable to water damage, which is covered, and that attributable to "wear, tear, and/or deterioration," which is excluded (Arvat Corp. v. Scottsdale Insurance Co., No. 14-22774, S.D. Fla.; 2015 U.S. Dist. LEXIS 146092).

    Mealey's Insurance - Insurer: New Evidence In Federal Investigation Warrants Reconsideration Of Ruling

    SAN DIEGO - A health care organization's directors and officers liability insurer on Oct. 28 asked a California federal judge to reconsider a summary judgment ruling in favor of an insured, contending that new evidence proves "once and for all" that coverage for an underlying federal investigation is precluded by the policy's "prior or pending litigation" and "specific claims" exclusions (Millennium Laboratories, Inc. v. Allied World Insurance Company [U.S.], Inc., No. 12-2280, S.D. Calif.; 2015 U.S. Dist. LEXIS 133534).

    Mealey's Insurance - 10th Circuit Reverses No Coverage Ruling In Suit Arising From Easement Dispute

    DENVER - The 10th Circuit U.S. Court of Appeals on Oct. 29 held that counterclaims against a developer insured in an underlying easement dispute can be read to allege an occurrence under an insurance policy, reversing and remanding a lower federal court's finding that the insurer has no duty to defend its insured (KF 103-CV, LLC v. American Family Mutual Insurance Co., No. 14-1403, 10th Cir.; 2015 U.S. App. LEXIS 18827).

    Mealey's Insurance - Texas Federal Magistrate Judge Says Insured Failed To Show Additional Coverage Owed

    AUSTIN, Texas - A Texas federal magistrate judge on Oct. 27 recommended granting an insurer's motion for summary judgment after determining that the insured failed to present any case law or support for his argument that the insurer has an obligation to pay additional payments for mold remediation even though the policy's limits were reached (Charles Igwe v. Safeco Insurance Company of Indiana, No. 14-587, W.D. Texas; 2015 U.S. Dist. LEXIS 145237).

    Mealey's Insurance - Panel: Insureds' Damage Caused By Surface Water Barred From Coverage

    HOUSTON - A homeowners insurance policy's water damage exclusion precludes coverage for damage to insureds' home caused by surface water, a Texas appeals panel affirmed Oct. 29 (Peter Tsai and Barbara Tsai v. Liberty Mutual Insurance Co., No. 01-14-00677-CV, Texas App., 1st Dist.; 2015 Tex. App. LEXIS 11147).

    Mealey's Insurance - Water Damage From Defects Is An 'Occurrence' Under Insurance Policy, Panel Says

    DES MOINES, Iowa - Water damage and mold arising out of construction defects constitute an "occurrence" under an excess insurance policy, an Iowa appeals panel affirmed Oct. 28, also reversing an award of prejudgment interest (National Surety Corp. v. Westlake Investments, LLC, No. 14-1274, Iowa App.; 2015 Iowa App. LEXIS 982).

    Mealey's Insurance - Iowa Appeals Court Finds Evidence Supported Arson, Insurance Fraud Verdicts

    DES MOINES, Iowa - An Iowa Court of Appeals panel on Oct. 28 affirmed a jury's verdicts finding a man guilty of second-degree arson and insurance fraud, holding that there was sufficient evidence to support the convictions and that defense counsel's objection to the expert testimony of a fire department lieutenant failed to preserve the issue for appeal (State of Iowa v. Brian Earl Lebs, No. 14-0893, Iowa App.; 2015 Iowa App. LEXIS 974).

    Mealey's Insurance - Judge OKs $330,117 Settlement Between Liquidation Estate, Guaranty Associations

    HARRISBURG, Pa. - A Pennsylvania judge on Oct. 23 approved a settlement agreement between the estate of an insolvent insurer and a number of states' insurance guaranty associations (In re: Reliance Insurance Company in Liquidation, No. 1 REL 2001; California Insurance Guarantee Association, Objector v. Reliance Insurance Company in Liquidation, No. 3 REL 2014; California Insurance Guarantee Association, Objector v. Reliance Insurance Company in Liquidation, No. 4 REL 2014, Pa. Cmwlth.).

    Mealey's Insurance - Judge Awards $9.2M To Excess Insurer In Coverage Dispute Over Failed Real Estate

    CLEVELAND - An Ohio federal judge on Oct. 26 refused to reconsider an Aug. 28 ruling that held a primary insurer liable under the principles of equity to reimburse an excess insurer for the $7,996,655.57 in defense costs it was ordered to pay to their insured in connection with an underlying lawsuit arising from a failed real estate project, awarding the excess insurer $7,996,655.57 plus $1,160,629.09 in prejudgment interest (IMG Worldwide Inc., et al. v. Westchester Fire Insurance Co., No. 11-1594, N.D. Ohio, Eastern Div.; 2015 U.S. Dist. LEXIS 144868).

    Mealey's Insurance - Claims Adjuster Properly Joined In Bad Faith Action, Federal Judge Rules

    WACO, Texas - Remand of an insurance breach of contract and bad faith action to state court is proper, a federal judge in Texas ruled Oct. 27, because an insured has shown that an insurance adjuster was properly joined in the action (SAI Hotel Group Ltd., d/b/a Americas Best Value Inn, v. Steadfast Insurance Co., et al., No. 15-263, W.D. Texas; 2015 U.S. Dist. LEXIS 145637).