LexisNexis® Legal Newsroom
    Mealey's Insurance - Reinsurer Challenges Reinsured's Settlement Of Environmental Claims

    NEW HAVEN, Conn. - A reinsurer told a federal court in Connecticut on July 10 that its reinsured failed to take good faith and businesslike steps in settling certain environmental loss and damage claims against its underlying insured (Travelers Casualty and Surety Company v. ACE Property & Casualty Insurance Company, et al., No. 15-cv-00275, D. Conn.).

    Mealey's Insurance - Panel Rejects Appeal Of Order Confirming Arbitration Award For 1 Of 482 Claims

    ST. PAUL, Minn. - The Eighth Circuit U.S. Court of Appeals on July 10 refused to entertain an automotive glass repair company insured's appeal of an order that confirmed an arbitration award for one of 482 partially paid auto glass claims, finding that it lacks jurisdiction to decide whether a lower federal court improperly found that a two-year statute of limitations applied to consolidated auto glass invoice claims (Alpine Glass Inc. v. Country Mutual Insurance Company, et al., No. 14-2578, 8th Cir.; 2015 U.S. App. LEXIS 11904).

    Mealey's Insurance - Judge: Pennsylvania Law Must Be Applied When Determining Duty To Indemnify

    HARRISBURG, Pa. - Because the Commonwealth of Pennsylvania has a more significant relationship than the State of New York with the parties involved in an asbestos coverage dispute, Pennsylvania law must be applied when determining whether a duty to indemnify exists, a Pennsylvania federal judge said July 9 (York International Corp. v. Liberty Mutual Insurance Co., No. 1:10-CV-0692, M.D. Pa.; 2015 U.S. Dist. LEXIS 88847).

    Mealey's Insurance - Insurer Waived Right To Remove Breach Of Contract, Bad Faith Suit, Judge Finds

    DENVER - An insurer waived its right to remove an insured's breach of contract and bad faith lawsuit regarding coverage for water intrusion at a construction project based upon the policy's service-of-suit endorsement, a Colorado federal judge ruled July 8 (Elevation Builders Inc. v. Companion Specialty Insurance Co., No. 15-00490, D. Colo.; 2015 U.S. Dist. LEXIS 89885).

    Mealey's Insurance - Federal Judge: Excess Insurer Can Recover $5M It Paid To Settle Securities Action

    SAN JOSE, Calif. - An insured's former first-layer excess directors and officers liability insurer is entitled to recover the $5 million it paid to settle an underlying securities action plus prejudgment interest from the insured's latter first-layer excess directors and officers liability insurer, a California federal judge ruled July 8 (Genesis Insurance Co. v. Magma Design Automation, Inc., et al., No. 06-05526, N.D. Calif.; 2015 U.S. Dist. LEXIS 88769).

    Mealey's Insurance - Panel: Insurer Owes No Defense Of Kidnapping, Racketeering Claims Against University

    RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals found July 10 that an insurer has no duty to defend its university insured against underlying claims that it conspired to kidnap a minor because the underlying complaint fails to allege an "occurrence" and triggers the policy's intentional and criminal acts exclusions, reversing and remanding a lower court's ruling against the insurer (Liberty University, Inc. v. Citizens Insurance Company of America, et al., No. 14-2254, 4th Cir.; 2015 U.S. App. LEXIS 11888).

    Mealey's Insurance - Judge: Additional Insured Endorsement Is Not Binding; Insurer Owes No Defense

    SAN FRANCISCO - A contractor was not an additional insured to a subcontractor's insurance policy for coverage purposes in a construction defects case, a California federal judge ruled July 9, finding that the insurer's underwriter did not have authority to grant an insurance broker the ability to bind an additional insured endorsement (Navigators Specialty Insurance Co. v. St. Paul Surplus Lines Insurance Co., et al., No. 13-03499, N.D. Calif.; 2015 U.S. Dist. LEXIS 89449).

    Mealey's Insurance - Insurer Owes Defense As Faulty Work Claims Are An 'Accident,' Judge Says

    OKLAHOMA CITY - A commercial general liability insurer has a duty to defend an insured contractor against claims arising from damage to a dental facility because alleged faulty workmanship is an accident that may give rise to coverage, an Oklahoma federal judge ruled July 9, also finding that questions remain as to the application of a "damage to property" exclusion (Essex Insurance Co. v. Sheppard & Sons Construction Inc., et al., No. 12-1022, W.D. Okla.; 2015 U.S. Dist. LEXIS 89096).

    Mealey's Insurance - Consequential Damages Are 'Property Damage' Under Insurance Policies, Panel Says

    TRENTON, N.J. - The unintended and unexpected consequential damages caused by subcontractors' defective work constitute "property damage" and an "occurrence" under commercial general liability insurance policies, a New Jersey appeals panel ruled July 9 (Cypress Point Condominium Association Inc. v. Adria Towers LLC, et al., No. A-2767-13T1, N.J. Super. App. Div.; 2015 N.J. Super. LEXIS 114).

    Mealey's Insurance - Reinsurer Says Information Reinsured Seeks Is Overly Broad, Not Relevant To Case

    SYRACUSE, N.Y. - A reinsurer told a federal court in New York on July 8 that its reinsured's discovery requests are overly broad and ambiguous (Utica Mutual Insurance Company v. R&Q Reinsurance Company, No. 13-cv-01332, N.D. N.Y.).

    Mealey's Insurance - Texas Judge Approves End Of Insolvent Insurer's Liquidation Proceeding

    AUSTIN, Texas - A Texas judge on July 7 dissolved an insurer in liquidation and ordered the closing of the liquidation proceeding (State of Texas v. Western Indemnity Insurance Company, No. D-1-GV-03-002024, Texas, 261st Dist., Travis Co.).

    Mealey's Insurance - Federal Judge: Insurer Has No Duty To Defend Against Suit Alleging 'Group Boycott'

    HOUSTON - A Texas federal judge on July 8 held that an insurer has no duty to defend its insured against an underlying lawsuit alleging that it conspired to arrange a "group boycott" to drive a competitor out of business, finding, however, that a decision on the insurer's duty to indemnify the insured is premature (Chartis Specialty Insurance Co. v. JSW Steel [USA], Inc., No. 14-1527, S.D. Texas; 2015 U.S. Dist. LEXIS 88351).

    Mealey's Insurance - Judge: Insufficient Evidence To Trigger Excess Insurers' Duties To Defend, Indemnify

    SAN FRANCISCO - An insured failed to alleged that there are property damage claims against it arising from a construction project at a school sufficient enough to trigger excess insurers' duties to defend and indemnify, a California federal judge ruled July 8, dismissing the case with leave to amend (Thompson Pacific Construction Inc. v. American International Group Inc., et al., No. 15-01091, N.D. Calif.; 2015 U.S. Dist. LEXIS 88821).

    Mealey's Insurance - Illinois Panel: Trial Court Had Jurisdiction Over Workers' Compensation Issue

    SPRINGFIELD, Ill. - An Illinois appeals court panel on July 7 upheld a trial court's dismissal of a man's petition seeking reversal of a default judgment awarded to the insurance company that issued his workers' compensation policy, holding that the lower court, rather than the Illinois Workers' Compensation Commission, had jurisdiction over whether the man misrepresented the number of employees who worked for his company (Pekin Insurance Company v. Tyree Campbell, d/b/a Campbell Construction & Improvement, No. 4-14-0955, Ill. App., 4th Dist.; 2015 Ill. App. LEXIS 523).

    Mealey's Insurance - Texas Majority Finds Endorsement Ambiguous, Reverses Ruling In Favor Of Insurer

    AMARILLO, Texas - A majority of a Texas appeals court on July 6 found that the language of a commercial general liability insurance policy's "clergy counseling professional liability coverage" endorsement is ambiguous and, therefore a lower court erred in granting summary judgment in favor of an insurer in a coverage dispute arising from claims for sexual abuse of minors (Doe #1, Doe #2 And Doe #3 v. National Union Fire Insurance Company of Pittsburgh, PA., No. 07-14-00109-CV, Texas App., 7th Dist.; 2015 Tex. App. LEXIS 6893).

    Mealey's Insurance - Judge: Insurer Failed To Show That Amendment Would Be Futile In Bad Faith Suit

    LOS ANGELES - A federal judge in California on July 7 granted an insured's motion to amend its complaint in an insurance bad faith lawsuit, ruling that the insurer failed to show that amendment should be denied (Film Allman LLC v. New York Marine and General Insurance Co. Inc., No. 14-7069, C.D. Calif.; 2015 U.S. Dist. LEXIS 88108).

    Mealey's Insurance - Pennsylvania Panel Affirms Conviction Of Pain Clinic Owner For Fraudulent Billing

    PHILADELPHIA - A Pennsylvania Superior Court panel on July 7 affirmed the conviction of a pain clinic owner for conspiracy, theft and insurance fraud after finding that the evidence presented during his trial supported the verdict and that the trial court judge did not err when allowing the Commonwealth of Pennsylvania's insurance billing expert to offer lay testimony (Commonwealth of Pennsylvania v. Owen Rogal, No. 5 EDA 2014, Pa. Super.; 2015 Pa. Super. LEXIS 397).

    Mealey's Insurance - Flood Deductible Applies To $5M Delay In Completion Losses, N.Y. Panel Affirms

    NEW YORK - A New York appeals panel on July 7 affirmed a lower court's ruling that a builders risk insurance policy limits the amount an insurer must pay for an insured's delay in completion losses to $5 million and that the policy's flood deductible applies to the payment (El-Ad 250 West LLC v. Zurich American Insurance Co., No. 15637, 652964/13, N.Y. App., 1st Dept.; 2015 N.Y. App. Div. LEXIS 5753).

    Mealey's Insurance - Panel: Property Damage Exclusions Do Not Bar Claims For Negligent Installation

    ATLANTA - A commercial general labiality insurance policy's "damage to property" exclusions do not preclude coverage for claims of an insured's alleged negligent installation, a Georgia appeals panel ruled July 8; however, the panel affirmed that a fungi exclusion bars coverage for the ensuing mold damage (Michael Dolan, et al. v. Auto Owners Insurance Co., No. A15A0384, Ga. App., 3rd Div.; 2015 Ga. App. LEXIS 421).

    Mealey's Insurance - Judge Transfers Declaratory Judgment Reinsurance Dispute To Different Forum

    PHILADELPHIA - A federal judge in Pennsylvania on July 7 granted two insurers' motion to dismiss a reinsurance dispute and transfer the suit to a federal court in Connecticut (Excalibur Reinsurance Corporation v. Select Insurance Company, et al., No. 15-cv-02522, E.D. Pa.).

    Mealey's Insurance - Methodology Fatal To Expert Opinions In Infringement Case, Magistrate Judge Says

    SAN JOSE, Calif. - A California federal magistrate judge on July 5 excluded most royalty and damages opinions of two experts in a patent dispute, saying that the experts' "methodologically unsound opinion testimony" should not be presented to a jury (Good Technology Corporation, et al., v. MobileIron, Inc., No. 5:12-cv-05826, N.D. Calif.; 2015 U.S. Dist. LEXIS 87347).

    Mealey's Insurance - Warner Chilcott Sales Director Pleads Guilty To Health Care Fraud For Fake Scripts

    BOSTON - A former district sales manager for drug maker Warner Chilcott Sales U.S. LLC on July 7 pleaded guilty to one count of conspiracy to commit health care fraud for directing a scheme to have other sales representatives submit falsified authorizations for the osteoporosis drugs Actonel and Atelvia (United States of America v. Jeffrey Podolsky, No. 15-cr-10132, D. Mass.).

    Mealey's Insurance - Judge Dismisses Insurers In Amtrak's Superstorm Sandy Coverage Dispute

    NEW YORK - A New York federal judge on July 2 entered a final order and judgment that dismissed insurers in Amtrak's breach of contract and declaratory judgment lawsuit over an alleged hundreds of millions of dollars worth of Superstorm Sandy damage (National Railroad Passenger Corp. v. Arch Specialty Insurance Co., et al., No 14-7510, S.D. N.Y.).

    Mealey's Insurance - Exception To Policy's Water Intrusion Limitation Does Not Apply, Judge Says

    JACKSONVILLE, Fla. - A Florida federal judge held on July 7 that an insured has failed to demonstrate that a "covered cause of loss" damaged the walls or roof of its motel property permitting the wind-driven rain of Tropical Storm Debby to intrude, concluding that the exception to the policy's water intrusion limitation does not apply (Divine Motel Group LLL d/b/a Royal Inn v. Rockhill Insurance Co., No. 14-31, M.D. Fla.; 2015 U.S. Dist. LEXIS 87789).

    Mealey's Insurance - Judge Grants Majority Of State Farm's Motion To Compel Billing Records

    FLINT, Mich. - A federal judge in Michigan on July 7 ordered a defendant chiropractic firm accused of using a predetermined protocol to submit false claims for individuals allegedly injured as a result of automobile accidents to State Farm Mutual Automobile Insurance Co. to produce billing records and other documents associated with the claims submitted to the insurer to the company, finding that the information was relevant to the plaintiff company's allegations (State Farm Mutual Automobile Insurance Company v. Warren Chiropractic & Rehab Clinic P.C., et al., No. 14-11521, E.D. Mich.; 2015 U.S. Dist. LEXIS 87661).