LexisNexis® Legal Newsroom
    Mealey's Insurance - Pollution Exclusions Clearly Bar Coverage For Underlying Water Contamination Judgment

    ST. LOUIS - A Missouri federal judge did not err in granting three insurers' motions for judgment on the pleadings in a suit filed by a class representative seeking to satisfy an $82 million judgment entered against the insured for damages arising out of water contamination, the Eighth Circuit U.S. Court of Appeals said Jan. 12, noting that radium is clearly barred by the policies' pollution exclusion (Barbara Williams v. Employers Mutual Casualty Co., No. 15-3573, 8th Cir.).

    Mealey's Insurance - Rescission Of Product Contamination Policy Was Proper, 3rd Circuit Says

    PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Jan. 11 affirmed that an insurer was entitled to rescind a product contamination insurance policy because it is clear that the insured made an intentional misrepresentation on the policy application upon which the insurer relied before issuing the policy (H.J. Heinz Co. v. Starr Surplus Lines Insurance Co., No. 16-1447, 3rd Cir.).

    Mealey's Insurance - Insured's Insurance Bad Faith Claim Survives Motion To Dismiss

    SCRANTON, Pa. - A federal judge in Pennsylvania on Jan. 12 denied an insurer's motion to dismiss in an insurance breach of contract and bad faith lawsuit, ruling that insured has pleaded sufficient evidence to support the claim (Robert Hughes v. State Farm Mutual Automobile Insurance Co., No. 16-2240, M.D. Pa.; 2017 U.S. Dist. LEXIS 4852).

    Mealey's Insurance - Directors, Officers Policy Does Not Cover FDIC's Claims, Majority Says, Reverses

    PASADENA, Calif. - A majority of the Ninth Circuit U.S. Court of Appeals on Jan. 10 found that a directors and officers liability insurance policy unambiguously excludes from coverage the Federal Deposit Insurance Corp.'s negligence, gross negligence and breach of fiduciary duty claims against a failed bank's former directors and officers, reversing and remanding a lower court (Federal Deposit Insurance Corporation, as Receiver for Security Pacific Bank v. BancInsure, Inc., No. 14-56132, 9th Cir.; 2017 U.S. App. LEXIS 452).

    Mealey's Insurance - South Carolina High Court Affirms Time-On-The-Risk Allocation Of Insurer's Costs

    COLUMBIA, S.C. - The majority of the South Carolina Supreme Court on Jan. 11 affirmed a special referee's finding that coverage under commercial general liability insurance policies was triggered and calculation of an insurer's pro rata portion of the progressive damages based on its time on the risk (Harleysville Group Insurance v. Heritage Communities Inc., et al., No. 2013-001281 & 2013-001291, S.C. Sup.; 2017 S.C. LEXIS 8).

    Mealey's Insurance - Coverage Of Share Dispute Barred By 'Insured Vs. Insured' Exclusion, Panel Affirms

    ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on Jan. 11 affirmed a lower court's ruling that a directors and officers liability insurance policy's "insured vs. insured" exclusion bars coverage for an underlying share dispute brought against a closely held corporation and two members of its board of directors by a former board member and her two daughters (Jerry's Enterprises, Inc. v. U.S. Specialty Insurance Co., No. 15-3324, 8th Cir.; 2017 U.S. App. LEXIS 475).

    Mealey's Insurance - New York High Court Certifies Reinsurance Liability Cap Question

    ALBANY, N.Y. - The New York Court of Appeals on Jan. 10 certified a question from the Second Circuit U.S. Court of Appeals regarding reinsurance liability cap limits as they relate to per-occurrence loss and expense (Global Reinsurance of America v. Century Indemnity Company, No. 34, N.Y. App.).

    Mealey's Insurance - Panel: Insurer Entitled To Recoupment Of Costs Defending Trade Secret Dispute

    SAN FRANCISCO - A California appeals panel on Jan. 10 affirmed a lower court's grant of summary judgment in favor of an insurer seeking recoupment of the costs it incurred in defending its agents against claims it brought against the agents involving trade secrets (State Farm Fire And Casualty Co. v. Richard Pyorre, No. A147302, Calif. App., 1st Dist., Div. 1).

    Mealey's Insurance - DOJ: Neurosurgeon Sentenced To 235 Months In Prison For Fraud Scheme

    DETROIT - The U.S. Department of Justice announced that a federal judge in Michigan on Jan. 9 sentenced a neurosurgeon to 235 months in prison for his role in a $2.8 million Medicare fraud scheme that involved the doctor billing public and private insurers for spinal fusions that he never performed (United States of America v. Aria O. Sabit, No. 15cr20311, E.D. Mich.).

    Mealey's Insurance - 3rd Circuit Affirms Dismissal Of Unjust Enrichment Claim Against Insurer

    PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Jan. 9 affirmed a lower federal court's dismissal with prejudice of an unjust enrichment claim against an insurer, finding that the complaint fails to allege that the insurer requested a benefit from the plaintiff or misled it in any way (iRecycleNow.com v. Starr Indemnity & Liability Co., No. 16-1570, 3rd Cir.; 2017 U.S. App. LEXIS 333).

    Mealey's Insurance - Reinsurers Say They Do Not Oppose Petition To Confirm Arbitration Award

    NEW YORK - A group of London-based reinsurers told a federal court in New York on Jan. 9 that they do not oppose a reinsured's motion to confirm an asbestos related arbitration award (OneBeacon Insurance Company v. Certain Underwriters at Lloyd's London, No. 16-cv-09908, S.D. N.Y.).

    Mealey's Insurance - Federal Magistrate Judge Says Insurer Must Produce Information On Other Claims

    HATTIESBURG, Miss. - A Mississippi federal judge on Jan. 6 partially granted a motion to compel filed by insureds seeking coverage for a gasoline leak after determining that the insurer is required to produce information related to the insurer's claims handling of other gasoline leak claims (Grain Dealers Mutual Insurance Co. v. Tammy Cooley, et al., No. 16-39, S.D. Miss.; 2017 U.S. Dist. LEXIS 2157).

    Mealey's Insurance - Judge Dismisses Breach Of Contract Claim Due To Insurer's Lack Of Coverage Decision

    SEATTLE - A Washington federal judge dismissed on Jan. 5 an insured's breach of contract claim against its insurer because the insurer has not granted or denied coverage for a claim for water damage to a condominium complex (Mainhouse Homeowners Association v. Allstate Insurance Co., et al., No. 16-1457, W.D. Wash.; 2017 U.S. Dist. LEXIS 1663).

    Mealey's Insurance - Judge: No Indemnification Owed For Water Damage Caused By Insured

    CHICAGO - An insurer has no duty to indemnify an insured and no duty to reimburse an additional insured for alleged water damage to an apartment building because there was no covered "occurrence" for the insured's failure to properly cover the building's roof, an Illinois federal judge ruled Jan. 6 (Brit UW Ltd. v. Tripar Inc. and Davis Russell Real Estate and Management LLC, No. 15-5866, N.D. Ill.; 2017 U.S. Dist. LEXIS 2462).

    Mealey's Insurance - No Coverage Owed For Environmental Contamination, Federal Magistrate Judge Says

    HAMMOND, Ind. - Insureds seeking coverage for environmental contamination discovered on a property they purchased are not entitled to coverage because the policy bars coverage for known or unknown property damage and for property damage that began before the policy's inception, an Indiana federal judge said Jan. 5 in granting the insurer's motion for summary judgment (Atlantic Casualty Insurance Co. v. Juan and Maria Garcia, No. 15-66, N.D. Ind.; 2017 U.S. Dist. LEXIS 1861).

    Mealey's Insurance - Insureds' Lack Of Breach Of Contract Claim Leads To Dismissal Of Bad Faith Claim

    TAMPA, Fla. - Because insureds have failed to bring a claim for breach of contract, they have failed to state a claim for bad faith and have violated the particularity requirement pursuant to the Federal Rules of Civil Procedure, a federal judge in Florida ruled Jan. 9 (Fred Fox, et al. v. Starr Indemnity & Liability Co., No. 16-3254, M.D. Fla.; 2017 U.S. Dist. LEXIS 2678).

    Mealey's Insurance - 7th Circuit Panel Finds Benefits Termination Was Not Arbitrary And Capricious

    CHICAGO - A disability insurer's termination of benefits was not arbitrary and capricious because the evidence supported the termination and the insurer minimized any conflict of interest by employing a number of safeguards, the Seventh Circuit U.S. Court of Appeals said Jan. 6 (Donna Geiger v. Aetna Life Insurance Co., No. 16-2790, 7th Cir.; 2017 U.S. App. LEXIS 245).

    Mealey's Insurance - Judge Orders Health Care Fraud Defendant To Turn Over Retirement Funds

    CHICAGO - A cardiologist who pleaded guilty to one count of health care fraud for fraudulently billing Medicare and other insurance companies was ordered by a federal judge in Illinois to turn over three retirement funds valued at $300,738.60 after finding that forfeiture of the funds would not result in an overpayment of the $12 million he owes in restitution (United States of America v. Sushil Sheth, No. 09 CR 69-1, N.D. Ill.; 2017 U.S. Dist. LEXIS 2281).

    Mealey's Insurance - Majority: No Coverage For Legal Expenses Incurred Without Insurer's Approval

    ATLANTA - A majority of the 11th Circuit U.S. Court of Appeals ruled Jan. 9 that an insurer has no duty to pay an insured's $405,989 in pre-tender legal expenses incurred in defending a copyright infringement lawsuit, affirming a lower court's finding that Florida's claims administration statute (CAS) does not control because the insurer relied on an exclusion and not a coverage defense in its refusal to pay the expenses (EmbroidMe.com, Inc. v. Travelers Property Casualty Company of America, No. 14-10616, 11th Cir.; 2017 U.S. App. LEXIS 368).

    Mealey's Insurance - Insurer Says No Coverage For Roofing Subcontractor's $6.6M In Faulty Work Damage

    CHICAGO - A commercial general liability insurance policy does not cover a roofing subcontractor over faulty work claims that resulted in more than $6.6 million in damages to townhomes, an insurer says in its Jan. 4 complaint to an Illinois federal court (Nautilus Insurance Co. v. Classic Roofing Inc. and Custom Roofing Contracting Ltd., No. 17-45, N.D. Ill.).

    Mealey's Insurance - Insurer Says Court Should Decide If Dispute Can Be Arbitrated

    SAN FRANCISCO - An insurer told a federal court in New York on Jan. 6 that the issue of whether a workers' compensation claim dispute can be arbitrated and what parties should participate in the arbitration is up to the court and not up to a panel of arbitrators to decide (In the Matter of the Arbitration Between National Union Fire Insurance Company of Pittsburgh, PA v. Federal Insurance Company, No. 16-cv-08821, S.D. N.Y.).

    Mealey's Insurance - Federal Judge: Recovery Sought Does Not Fall Under Policy's 'Definition Of Damages'

    CHICAGO - An Illinois federal judge on Jan. 5 held that a professional liability insurer has no duty to defend or indemnify against an underlying complaint alleging that the insureds misrepresented important data that an insurer used to calculate premiums (Westport Insurance Corp. v. M.L. Sullivan Insurance Agency Inc., d/b/a Sullivan & Associates Insurance and Risk Management, et al., No. 15-7294, N.D. Ill., Eastern Div.; 2017 U.S. Dist. LEXIS 1527).

    Mealey's Insurance - 10th Circuit: Court Properly Vacated Order Confirming Appraisal Award, Judgment

    DENVER - A commercial property insurer's voluntary payment of an appraisal award and the insured's acceptance of the payment settled any dispute over the amount of storm loss to the insured's property, the 10th Circuit U.S. Court of Appeals ruled Jan. 4, affirming a lower court's decision to vacate an order confirming the appraisal award and a judgment in favor of the insured (In re: Appointment of Umpire for Hayes Family Trust, on behalf of itself and all others similarly situated, Clayton A. Hayes, cotrustee v. State Farm Fire & Casualty Co., No. 15-6164, 10th Cir.; 2017 U.S. App. LEXIS 81).

    Mealey's Insurance - Reinsurer Denies Allegations Made In Breach Of Contract Suit Filed By Reinsured

    MONTGOMERY, Ala. - A reinsurer told a federal court in Alabama on Jan. 2 that its reinsured submitted a reinsurance loss bill under a different agreement than the one listed in the reinsured's complaint (Alabama Municipal Insurance Corporation v. Munich Reinsurance America, Inc., No. 16-cv-00948, M.D. Ala.).

    Mealey's Insurance - Nebraska High Court: Post-Loss Assignment Of Claim Is Valid Despite Clause

    LINCOLN, Neb. - Finding that an insured's post-loss assignment of a property damage claim to a roofing company under a homeowners insurance policy is valid despite the policy's nonassignment clause, the Nebraska Supreme Court on Dec. 30 affirmed a lower court's $5,252.66 judgment against the insurer in a dispute over roof damage (Millard Gutter Co. v. Farm Bureau Property & Casualty Insurance Co., No. S-15-912, Neb. Sup.; 2016 Neb. LEXIS 187).