LexisNexis® Legal Newsroom
    Mealey's Insurance - Maryland Law Doesn't Recognize Insured's Bad Faith Claim, Judge Rules

    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).

    Mealey's Insurance - Judge: Insurer Did Not Act In Bad Faith In Denying Defense In Insurance Dispute

    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).

    Mealey's Insurance - Emotional Distress Claim Is Not Preempted, California Federal Judge Determines

    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).

    Mealey's Insurance - Premium Investigator Says It Does Not Need Leave To File Amended Complaint

    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.).

    Mealey's Insurance - Federal Judge: Fact Issues Exist As To Whether Unfair Business Practices Occurred

    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).

    Mealey's Insurance - Collapse Of Retaining Wall Is Not A Covered Loss, New York Panel Affirms

    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).

    Mealey's Insurance - Reinsurer Asks Court To Appoint Arbitration Umpire From Reinsurer's List

    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.).

    Mealey's Insurance - Judge: Insured Lacks Viable Bad Faith Counterclaim In Insurance Coverage Dispute

    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).

    Mealey's Insurance - Reinsurer Says Reinsured's Prejudgment Interest Calculations Are Flawed

    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.).

    Mealey's Insurance - Magistrate Judge Says Costs Related To EPA Settlement Are Indemnity Costs

    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).

    Mealey's Insurance - Panel: 'Insured Vs. Insured' Exclusions Bars Coverage For Claim Over Stock Buyback

    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.).

    Mealey's Insurance - Judge Transfers Asbestos-Related Reinsurance Dispute

    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).

    Mealey's Insurance - Insurer Has No Duty To Pay $4M 'Blast Fax' Ads Settlement, Illinois Panel Affirms

    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).

    Mealey's Insurance - Issues Preclude Summary Judgment In Insurance Bad Faith Suit, Judge Rules

    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).

    Mealey's Insurance - Judge: Plaintiff Not Named Insured To Insurance Contract, Can't Sue For Bad Faith

    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).

    Mealey's Insurance - Judge: Insurer In Better Shoes To Bear Risk Of Co-Insured's Potential Default

    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).

    Mealey's Insurance - Insured's Faulty Work Is Not A Covered 'Occurrence,' Illinois Federal Judge Says

    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).

    Mealey's Insurance - Judge: Claims Of Continuing Damage From Defects Trigger Insurer's Duty To Defend

    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).

    Mealey's Insurance - Judge Refuses To Dismiss Reimbursement Suit Between Insurers Over Water Damage

    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).

    Mealey's Insurance - Florida Panel Partly Reverses $1.4M Award In Sinkhole Coverage Dispute

    LAKELAND, Fla. - A Florida appeals panel March 30 reversed in part a lower court's order awarding more than $1.4 million in fees, costs and prejudgment interest to an insured in a sinkhole coverage dispute (Citizens Property Insurance Corp. v. River Oaks Condominium II Association Inc., a/k/a River Oaks II Condo Association Inc., No. 2D13-4331, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 4810).

    Mealey's Insurance - Federal Judge Substantially Grants Summary Judgment On Bad Faith Claims

    DENVER - A federal judge in Colorado on March 29 substantially granted an insurer's motion for partial summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that although an insured failed to properly state her claim for common-law bad faith, certain issues preclude complete dismissal of her statutory bad faith claim (Joyce Wahlert v. American Standard Insurance Company of Wisconsin, No. 14-2744, D. Colo.; 2016 U.S. Dist. LEXIS 41295).

    Mealey's Insurance - Plan Administrator Ignored Reliable Evidence, 6th Circuit Panel Determines

    CINCINNATI - A plan administrator acted arbitrarily and capriciously in terminating a claimant's long-term disability (LTD) benefits because the plan administrator ignored reliable and objective evidence from the claimant's treating physicians, the Sixth Circuit U.S. Court of Appeals said March 31 (Mar-Ya J. Zuke v. American Airlines Inc. Long-Term Disability Plan, et al., No. 15-3465, 6th Cir.).

    Mealey's Insurance - Justice Asks For Input Regarding Liquidator's Report On Insolvent Insurer

    NEW YORK - A New York justice on March 28 issued an order to show cause why a liquidator's report on the status of an insolvent insurer's liquidation proceeding should not be approved (In the Matter of the Eveready Insurance Company, No. 160307/2014, N.Y. Sup., New York Co.).

    Mealey's Insurance - Federal Judge: 2 Exclusions Bar Coverage For Dispute Over 'Got Milk?' Campaign

    DULUTH, Minn. - A Minnesota federal judge on March 29 entered judgment in favor of a commercial general liability insurer one day after ruling that the insurer has no duty to defend or indemnify its insured against underlying counterclaims filed in a lawsuit over the ownership and use of the "got milk?" service marks and trademarks (Food Market Merchandising, Inc., Plaintiff, v. West Bend Mutual Insurance Co., No. 15-3347, D. Minn.; 2016 U.S. Dist. LEXIS 40770).

    Mealey's Insurance - Judge: Insurer Has No Duty To Defend, Indemnify Insured Against TCPA Claims

    DENVER - A Colorado federal judge on March 28 held that an insurer has no duty to defend and indemnify against underlying claims that its insured made unpermitted telemarketing calls to consumers and potential consumers of its broadcasting products and services (ACE American Insurance Co. v. DISH Network LLC, No. 13-00560, D. Colo.; 2016 U.S. Dist. LEXIS 40274).