LOS ANGELES - An insurer has no duty to defend its insureds against underlying environmental contamination claims arising out of their operation of a dry cleaning business because the policy's chemical discharge exclusion clearly bars coverage, a California federal judge said April 23 (Hollyway Cleaners & Laundry Co., et al. v. Central National Insurance Company of Omaha Inc., No. 13-7497, C.D. Calif.; 2015 U.S. Dist. LEXIS 54080).
INDIANAPOLIS - Indiana's high court on April 22 reversed a lower court and found that certain alleged wrongful acts by a self-insured managed health organization are covered under a number of reinsurance agreements (WellPoint, Inc. [f/k/a Anthem, Inc.], et al. v. National Union Fire Insurance Company of Pittsburgh PA, et al., No. 49S05-1404-PL-244, Ind. Sup.; 2015 Ind. LEXIS 316).
SELMA, Ala. - An Alabama federal judge on April 23 refused to dismiss or stay an insurer's coverage action pending resolution of an underlying action involving the same insureds and parties regarding damages allegedly from construction defects in a home (Employers Mutual Casualty Co. v. Kenny Hayes Custom Homes LLC, et al., No. 15-00054, S.D. Ala.; 2015 U.S. Dist. LEXIS 53191).
NEW ORLEANS - There is sufficient factual overlap to make joinder proper because an insured's claim against a roofing company and its owner implicates preaccident repairs that were a factor in an insurer's adjustment of a Hurricane Isaac claim, a Louisiana federal judge ruled April 21, granting the insured's motion to remand for lack of subject matter jurisdiction (David R. Fine v. State Farm Fire and Casualty Co., et al., No. 15-80, E.D. La.; 2015 U.S. Dist. LEXIS 52205).
KANSAS CITY, Kan. - A Kansas federal judge on April 21 found that a tire retailer insured has failed to establish that there is a genuine issue of material fact as to whether an insurer breached a duty to acknowledge the insured's right to its own counsel of choice, granting the insurer's motion for partial summary judgment in a dispute over coverage for a trademark infringement lawsuit (AKH Company Inc. v. Universal Underwriters Insurance Co., No. 13-2003, D. Kan.; 2015 U.S. Dist. LEXIS 52056).
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on April 21 granted a joint stipulation to remand a coverage dispute involving damages from a well blowout to Texas federal court to allow the parties to finalize a settlement agreement (Eagle Oil & Gas Co. v. Travelers Property Casualty Company of America, No. 15-10012, 5th Cir.).
WASHINGTON, D.C. - The U.S. Department of Justice (DOJ) announced April 21 that Citizens Medical Center, a county-owned hospital in Texas, agreed to pay $21.7 million to resolve allegations that it violated the False Claims Act (FCA) by overcompensating cardiologists for their services and paid bonuses to emergency room employees who improperly took into account the value of their cardiology referrals.
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on April 22 determined that a district court correctly applied an abuse of discretion standard of review in a disability benefits suit and correctly determined that the claimant is owed benefits under the policy (R. Jeffrey Evans v. Sun Life & Health Insurance Co., No. 13-55601; 9th Cir.; 2015 U.S. App. LEXIS 6688).
AUSTIN, Texas - BP Exploration & Production and its affiliates on April 22 filed a motion for rehearing in the Texas Supreme Court, arguing that the court incorrectly limited the additional insured status of BP by incorporating restrictions included in BP's drilling contract with the owner of the Deepwater Horizon rig (In re: Deepwater Horizon, No. 13-0670, Texas Sup.).
PORTLAND, Maine - A Maine federal judge on April 22 denied an insured's motion for summary judgment after determining that no coverage exists for an oil spill because a tanker trailer used to store the oil on the insured's property is not an auto covered for pollution expenses but rather a piece of mobile equipment pursuant to the policy's terms (J & S Oil Co. Inc. v. HDI-Gerling America Insurance Co., 14-00016, D. Maine; 2015 U.S. Dist. LEXIS 52705).
OKLAHOMA CITY - A federal judge in Oklahoma on April 20 granted in part and denied in part an insurer's motion for summary judgment in an insurance bad faith lawsuit, ruling that an insured failed to show that the insurer acted in bad faith in partially denying coverage to the insured under a homeowners insurance policy (Heather Yost v. Shelter Mutual Insurance Co., No. 14-725, W.D. Okla.; 2015 U.S. Dist. LEXIS 51433).
BIRMINGHAM, Ala. - After finding that all mold-related claims asserted against a contractor and others in an underlying state court case were excluded under an insurance policy, an Alabama federal judge on April 21 found that an insurer has no duty to defend the parties in the case (Pennsylvania National Mutual Casualty Insurance Co. v. The Retirement Systems of Alabama, et al., No. 14-248, N.D. Ala.; 2015 U.S. Dist. LEXIS 52055).
SAN FRANCISCO - A District Court erred in applying an abuse-of-discretion standard of review to a benefits denial suit because the summary plan description (SPD) does not constitute the plan document as the insurer argued, the Ninth Circuit U.S. Court of Appeals said April 21 in vacating and remanding the lower court's decision (Matthew Prichard v. Metropolitan Life Insurance Co. et al., No. 12-17355, 9th Cir.; 2015 U.S. App. LEXIS 6553).
ANNAPOLIS, Md. - A majority of the Maryland Court of Appeals held April 21 that underlying claims against a light designer and manufacturer insured did not trigger the "advertising injury" coverage under two commercial general liability insurance policies because there was no causation between the injury suffered and the insured's advertisement activities (Maryland Casualty Co., et al. v. Blackstone International Ltd, et al., No. 51, September Term, 2014, Md. App.; 2015 Md. LEXIS 286).
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on April 21 affirmed the conviction of a man found guilty of obtaining stranger-obtained life insurance (STOLI) policies for unqualified applicants, but ordered a federal judge in Texas to recalculate the man's sentence and restitution amount because he erred in relying on the intended loss the insurance companies (United States of America v. Vincent Bazemore, No. 14-10381, 5th Cir.; 2015 U.S. App. LEXIS 6610).
WASHINGTON, D.C. - The District of Columbia Circuit U.S. Court of Appeals on April 21 affirmed a lower federal court's ruling that a professional liability insurer has no duty to cover the costs of a $1.75 million legal malpractice action filed against a law firm insured and two of its attorneys (Chicago Insurance Co. v. Paulson & Nace, et al., No. 14-7063, D.C. Cir.; 2015 U.S. App. LEXIS 6529).
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on April 21 ruled that a federal judge in Texas did not err when ordering a physician couple to pay $37 million in restitution as part of their guilty plea to a 10-year-long insurance fraud scheme, holding that the judge correctly applied the appeals court's remand instructions after he initially ordered the defendants to pay $43 million (United States of America v. Arun Sharma, et al., No. 13-20325, 5th Cir.; 2015 U.S. App. LEXIS 6611).
BOSTON - The manufacturer of pharmaceutical cleanrooms and its insurer will pay $1 million to settle allegations that defective cleanrooms contributed to a nationwide outbreak of fungal meningitis, according to a settlement agreement proposed April 20 by a bankruptcy trustee (In Re: New England Compounding Pharmacy, Inc., No. 12-19882, D. Mass. Bkcy., Eastern Div.).
WASHINGTON, D.C. - The U.S. Supreme Court on April 20 declined to review a Second Circuit U.S. Court of Appeals ruling that a multiemployer welfare fund was not entitled to reimbursement from another insurer for benefits paid on behalf of a plan beneficiary who was covered by both insurers because the claims were not "appropriate equitable relief" under the Employee Retirement Income Security Act (Central States, Southeast and Southwest Areas Health and Welfare Fund, et al. v. Gerber Life Insurance Company, et al., No. 14-987, U.S. Sup.).
ATLANTA - The Georgia Supreme Court on April 20 found that a real estate investment trust insured cannot pursue a bad faith action against an excess insurer because the excess insurer did not consent to a $4.9 million securities class action settlement and the insured failed to satisfy the contractually agreed upon condition precedent to coverage (Piedmont Office Realty Trust, Inc., f/k/a Wells Real Estate Investment Trust, Inc. v. XL Specialty Insurance Company, No. S15Q0418, Ga. Sup.; 2015 Ga. LEXIS 247).
ST. PAUL, Minn. - A Minnesota appellate panel on April 20 affirmed a lower court, holding that the state's insurance guaranty association is not obligated to pay a workers' compensation claim (Terminal Transport, Inc. v. Minnesota Insurance Guaranty Association, No. A14-1284, Minn. App.; 2015 Minn. App. LEXIS 17).
NEW ORLEANS - A Louisiana federal judge on April 16 dismissed two interpleader actions in the Deepwater Horizon oil spill multidistrict litigation after determining that the excess insurers satisfied their coverage obligations pursuant to a settlement agreement (In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010 applies to: 11-01439, 11-01440, MDL No. 2179, E.D. La.).
PHILADELPHIA - A federal judge in Pennsylvania on April 17 dismissed a number of claims in an insurance bad faith lawsuit, ruling that insureds have failed to state a claim for relief (Joan Groth, et al. v. State Farm Fire & Casualty Co., et al., No. 14-7033, E.D. Pa.; 2015 U.S. Dist. LEXIS 51031).
CHICAGO - A psychiatrist whose long-term disability benefits were discontinued by his insurer failed to properly raise any objections to the opinions of his insurer's expert witnesses, an Illinois federal judge found April 17, denying the insured's motions to exclude (Naseem M. Chaudhry, M.D. v. Provident Life and Accident Insurance Co., et al., No. 1:12-cv-05838, N.D. Ill.; 2015 U.S. Dist. LEXIS 49350).
ST. LOUIS - The U.S. Attorney's Office for the Eastern District of Missouri on April 17 announced that a federal judge in Missouri sentenced a podiatrist to 12 months and one day in prison for his role in submitting false documents and reimbursement claims to Medicare.