LexisNexis® Legal Newsroom
    Mealey's Insurance - Judge Remands Insurance Bad Faith Lawsuit To State Court

    EL DORADO, Ark. - Remand of an insurance bad faith lawsuit to state court is proper because an insured has shown that the amount in controversy is less than $75,000, a federal judge in Arkansas ruled Aug. 21 (Tina L. Boone v. State Farm Mutual Automobile Insurance Co., No. 15-1047, W.D. Ark.; 2015 U.S. Dist. LEXIS 110887).

    Mealey's Insurance - Judge To Hear Argument For 2 Suits On W.R. Grace Insurer Liability At Same Time

    WILMINGTON, Del. - A Delaware federal bankruptcy judge on Aug. 19 consolidated for oral argument motions to dismiss and for summary judgment in two adversary cases that ask the same question: whether the protective injunction in W.R. Grace & Co.'s Chapter 11 case bars asbestos personal injury claimants in Libby, Mont., from pursuing negligence and bad faith claims against the former debtors' insurers (In re: W.R. Grace & Co., et al., No. 01-01139 [Continental Casualty Company, et al. v. Jeremy B. Carr, et al., No. 15-50766], [Ralph Hutt and Carl Osborn v. Maryland Casualty Company, No. 14-50867], D. Del. Bkcy.).

    Mealey's Insurance - Illinois Judge Orders Liquidation Of Insolvent Insurer

    CHICAGO - An Illinois judge on Aug. 19 ordered an insolvent insurer out of rehabilitation and into liquidation and named the state's acting director of insurance as liquidator (People of the State of Illinois, ex rel. Andrew Boron, Director of Insurance of the State of Illinois v. Interstate Bankers Casualty Co., No. 14 CH 6395, Ill. Cir., Cook Co.).

    Mealey's Insurance - Judge Dismisses Copyright Infringement Coverage Dispute Because Of Improper Venue

    SAN FRANCISCO - A California federal judge on Aug. 17 dismissed an insurer's declaratory judgment lawsuit disputing coverage for underlying counterclaims against its enterprise software services provider insured, finding that venue is not proper (Charter Oak Fire Insurance Co., et al. v. Rimini Street Inc., et al., No. 15-02378, N.D. Calif.; 2015 U.S. Dist. LEXIS 109075).

    Mealey's Insurance - Federal Judge Allows Breach Of Contract, Bad Faith Claims To Proceed

    LOS ANGELES - A California federal judge on Aug. 18 denied in part an insurer's motion for summary judgment in coverage dispute arising from claims that an insured participated in an alleged scheme to acquire the trade secrets and a confidential marketing "system" developed by a home health franchisor, allowing breach of contract and bad faith claims to proceed (Anthony Nieves, et al. v. Travelers Casualty Insurance Company of America, et al., No. 14-05536, C.D. Calif.; 2015 U.S. Dist. LEXIS 110386).

    Mealey's Insurance - Judge Dismisses Coverage Suit In Light Of Parallel One Over Negligent Work Claims

    PHILADELPHIA - A Pennsylvania federal judge on Aug. 19 dismissed an insurer's coverage lawsuit because there is an underlying parallel lawsuit involving the same parties and issues with regard to an insured's alleged negligent construction work that caused water damage in an apartment complex (American Home Assurance Co. v. Global Construction Company LLC, et al., No. 14-07319, E.D. Pa.; 2015 U.S. Dist. LEXIS 110378).

    Mealey's Insurance - Panel: Insurer Had Duty To Defend General Contractor Against Defects Claims

    PORTLAND, Ore. - Allegations of an insured subcontractor's construction defects triggered an insurer's duty to defend a general contractor as an additional insured, an Oregon appeals panel affirmed Aug. 19, finding that the insurer breached its duty to defend (West Hills Development Co. v. Chartis Claims, Inc., et al., No. 381, Ore. App.; 2015 Ore. App. LEXIS 993).

    Mealey's Insurance - Federal Judge Awards $1,029,814 In Attorney Fees Against Insurer

    MEDFORD, Ore. - An Oregon federal judge on Aug. 20 awarded $1,029,814 in attorney fees against an insurer in an executive and organization liability insurance coverage dispute (Daryl J. Kollman, et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 04-3106, D. Ore.; 2015 U.S. Dist. LEXIS 109966).

    Mealey's Insurance - Judge Says Arbitration Panel Should Decide How To Deal With Reinsurance Dispute

    NEW HAVEN, Conn. - A federal judge in Connecticut on Aug. 18 held that it is up to an arbitration panel to determine which of two arbitration clauses in a reinsurance contract applies to a dispute over, among other things, a commutation value (American United Life Insurance Company v. Travelers Indemnity Company, et al., No. 14-cv-01339, D. Conn.).

    Mealey's Insurance - 11th Circuit: No Coverage For Data-Theft Suit Under Employment Practices Policy

    ATLANTA - Because no employment relationship existed between a health insurance provider and a security firm, an 11th Circuit U.S. Court of Appeals panel on Aug. 17 found that the security firm's employment practices liability (EPL) policy did not provide coverage for the settlement of an underlying data-theft class action lawsuit (Carolina Casualty Insurance Co., et al. v. Red Coats Inc., d/b/a Admiral Security Services Inc., No. 14-12002, 11th Cir.; 2015 U.S. App. LEXIS 14421).

    Mealey's Insurance - Mold Exclusion Does Not Preclude Coverage, Tennessee Federal Judge Determines

    JACKSON, Tenn. - An insurer has a duty to defend its insured in an underlying suit alleging bodily injuries as a result of mold in a rented home because an exception to the mold exclusion provides that the exclusion does not apply to fungi contained in a good or product intended for human consumption, a Tennessee federal judge said Aug. 19 (Acuity, a mutual insurance company v. Reed & Associates of Tennessee LLC et al., No. 15-2140, W.D. Tenn.; 2015 U.S. Dist. LEXIS 109412).

    Mealey's Insurance - Judge: Insurers Not Liable For $5M Settlement Arising From Wrongful Conviction

    SOUTH BEND, Ind. - An Indiana federal judge on Aug. 17 held that insurers do not have to contribute to a law enforcement liability insurer's $5 million settlement of an underlying civil rights lawsuit against the City of Elkhart, Ind., stemming from a wrongful arrest and prosecution, granting their motions for judgment on the pleadings (TIG Insurance Co. v. City of Elkhart, et al., No. 13-902 c/w No. 13-992, N.D. Ind.; 2015 U.S. Dist. LEXIS 107807).

    Mealey's Insurance - Judge Refuses To Compel Discovery On Allegedly Defective Styling Irons

    FRESNO, Calif. - Since a proposed class action in which purchasers asserting violations of California's unfair competition law in relation to allegedly defective styling irons is still in the pre-class stage, a California federal judge on Aug. 17 denied the plaintiffs' motion to compel additional discovery on the irons (Delia Wilson, on behalf of herself and others similarly situated, v. Conair Corp., No. 1:14-cv-00894, E.D. Calif.; 2015 U.S. Dist. LEXIS 109030).

    Mealey's Insurance - Liquidator Asks Court To OK $15.9 Million Reinsurance Commutation Agreement

    HARRISBURG, Pa. - The liquidator of an insolvent insurer on Aug. 18 asked a Pennsylvania court to approve a nearly $16 million commutation payment from a reinsurer of certain workers' compensation, general liability and automobile liability policies (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).

    Mealey's Insurance - California Federal Judge Says Insurer Is Permitted To Add Claims In Contamination Suit

    SACRAMENTO, Calif. - A California federal judge on Aug. 17 granted an insurer's motion to amend its counterclaim to add an additional nine claims in an environmental remediation dispute after determining that one of the plaintiffs withheld documents on the basis of privilege without producing a privilege log (Lennar Mare Island LLC v. Steadfast Insurance Co., et al., No. 12-2182, E.D. Calif.; 2015 U.S. Dist. LEXIS 108381).

    Mealey's Insurance - 5th Circuit Panel Reverses Dismissal Of Insurer's Suit, Insured's Counterclaims

    NEW ORLEANS - A district court judge erred in dismissing an insurer's declaratory judgment suit and an insured's counterclaims because he did not consider whether the insured properly alleged a bad faith claim under Louisiana law and did not provide the parties with notice of his intent to dismiss the remainder of the insured's claims, the Fifth Circuit U.S. Court of Appeal said Aug. 18 (Century Surety v. Cylie Blevins, et al., No. 14-31131, 5th Cir.; 2015 U.S. App. LEXIS 14497).

    Mealey's Insurance - Debt Claims Fail To Refer To 'Lending Services' Activities, 11th Circuit Affirms

    ATLANTA - The 11th Circuit U.S. Court of Appeals on Aug. 18 affirmed a lower federal court's ruling that debt allegations in an underlying bankruptcy proceeding fail to refer to the kind of conduct that constitutes "lending services" pursuant to a bankers professional liability insurance policy (Greater Community Bancshares Inc., f.k.a. Greater Rome Bancshares, Inc., et al. v. Federal Insurance Co., No. 15-11806, 11th Cir.; 2015 U.S. App. LEXIS 14437).

    Mealey's Insurance - Professional Services Exclusion Bars Coverage For Tax Fraud Claims, Panel Affirms

    SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Aug. 18 affirmed a lower federal court's finding that an insurer has no duty to defend former directors of a now-defunct company because their business and management indemnity insurance policy's professional services exclusion bars coverage for claims that the insureds engaged in a payroll tax scheme (Darryn Begun, et al. v. Scottsdale Insurance Co., No. 13-16211, 9th Cir.; 2015 U.S. App. LEXIS 14495).

    Mealey's Insurance - Judge Orders Petition To Confirm Arbitration Award Sealed

    NEW YORK - A federal judge in New York on Aug. 14 granted an insurer's motion to seal a petition for confirmation of an arbitration award brought against a reinsurer (Century Indemnity Company v. Global Reinsurance Corporation of America, et al., No. 15-cv-06426, S.D. N.Y.).

    Mealey's Insurance - Insurer Says It Is Due Prejudgment Remedy From Reinsurer Exceeding $1.6M

    NEW HAVEN, Conn. - An insurer told a federal court in Connecticut on Aug. 14 that it has met the requirements under Connecticut's prejudgment remedy statute by showing that it will most likely succeed in its $1,664,664.74 case against its reinsurer (Travelers Casualty & Surety Company v. R&Q Reinsurance Company, No. 14-cv-01651, D. Conn.).

    Mealey's Insurance - Magistrate Judge Denies Remand For Insured's Lawsuit Over Lead Loss

    ST. LOUIS - A Missouri federal magistrate judge on Aug. 17 declined to remand an insured's lawsuit regarding coverage for a loss caused by lead and lead dust released at a construction project for a school (Rice Painting Company Inc. v. Depositors Insurance Co., No. 15-1064, E.D. Mo.; 2015 U.S. Dist. LEXIS 107838).

    Mealey's Insurance - Coverage Barred For Contamination Claims, Nevada Federal Judge Says

    LAS VEGAS - No coverage is owed for underlying environmental contamination claims alleged against an insured because the policies at issue clearly preclude coverage for releases of pollutants that occur on the insured's premises and for releases of pollutants that are caused by third parties, a Nevada federal judge said Aug. 13 in granting an insurer's motion to dismiss the insured's complaint (Southern Nevada TBA Supply Co. d/b/a Ted Wiens Tire and Auto Centers v. Universal Underwriters Insurance Co., No. 15-46; D. Nev.; 2015 U.S. Dist. LEXIS 107284).

    Mealey's Insurance - Judge Denies Insurers' Bid For Relief From Pittsburgh Corning's Plan Approval

    PITTSBURGH - A Pennsylvania federal judge on Aug. 12 denied a request by two insurance companies for relief from the judgment approving Pittsburgh Corning Corp.'s Chapter 11 plan of reorganization, finding that she lacks authority to grant the request and that new evidence relied on by the insurers of alleged fraud in the asbestos trust system does not show that the plan approval was procured by fraud. The next day, the insurers appealed the ruling (In re: Pittsburgh Corning Corporation, No. 00-22876, W.D. Pa. Bkcy. [Mt. McKinley Insurance Company, et al. v. Pittsburgh Corning Corporation, Nos. 13-01639, 14-0144, 14-0182, W.D. Pa.]; 2015 U.S. Dist. LEXIS 105890).

    Mealey's Insurance - Experts Permitted To Testify In Carbon Monoxide Coverage Suit, Federal Judge Says

    RENO, Nev. - A Nevada federal judge on Aug. 14 denied an insurer's motion to preclude expert testimony from two witnesses because the witnesses may help the jury to decide whether the insurer reasonably interpreted the policy's total pollution exclusion and the indoor air quality exclusion as not covering a carbon monoxide leak (Century Surety Company v. Casino West, Inc., No. 07-636, D. Nev.; 2015 U.S. Dist. LEXIS 107283).

    Mealey's Insurance - Panel: $1.2M Settlement Was Intended To Cover Claims Against Diocese Only

    NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals held Aug. 14 that there is a complete lack of evidence demonstrating any intent to allocate a portion of a $1.2 million settlement in an underlying sexual abuse case to claims against defendants other than the Catholic Diocese of El Paso, affirming a lower federal court (Interstate Fire & Casualty Co. v. Catholic Diocese Of El Paso, No. 14-51113, 5th Cir.; 2015 U.S. App. LEXIS 14390).