LexisNexis® Legal Newsroom
    Mealey's Insurance - Judge Denies Motion For Acquittal, New Trial Over Health Care Fraud Claims

    PHILADELPHIA - A federal judge in Pennsylvania on May 13 denied a woman's motion for acquittal following her conviction on four counts of health care fraud, ruling that the government sufficiently showed that Medicare is a health care benefit program that affects commerce (United States of America v. Patricia McGill, No. 12-112-01, E.D. Pa.; 2016 U.S. Dist. LEXIS 63950).

    Mealey's Insurance - 7th Circuit: No Coverage For Suit Alleging Law Firms Breached Employment Agreement

    CHICAGO - The Seventh Circuit U.S. Court of Appeals on May 16 affirmed a lower federal court's ruling that there is no coverage under the "employee benefits liability provision" of a business owners insurance policy for underlying claims that two law firms and their principals breached an employment agreement (Hartford Casualty Insurance Co. v. Karlin, Fleisher & Falkenberg, LLC, et al., No. 15-3417, 7th Cir.; 2016 U.S. App. LEXIS 8921).

    Mealey's Insurance - 2nd Eagle Insurer Seeks Discovery On Debtor's Corporate Ownership

    NEW ORLEANS - An insurance company on May 12 asked a Louisiana federal bankruptcy judge to order Chapter 11 debtor Eagle Inc. to share discovery documents produced in the case to other insurers and asbestos claimants; the request followed an order by the bankruptcy judge a week earlier granting in part another insurer's motion to compel discovery related to the debtor's corporate ownership (In re: Eagle, Inc., No. 15-12437, E.D. La. Bkcy.).

    Mealey's Insurance - Judge Bars Insured's Expert From Testifying On Regulatory Experience In Coverage Suit

    ORLANDO, Fla. - An insured's expert may not testify on his regulatory or legislative experience regarding procurement of insurance, a Florida federal judge ruled May 11 (American K-9 Detection Services, Inc. and American K-9 Detection Services LLC v. Rutherford International, Inc. and Sara Payne, No. 14-1988, M.D. Fla.; 2016 U.S. Dist. LEXIS 62279).

    Mealey's Insurance - Policy Unambiguously Did Not Provide Defense For Wrongful Death Suit, Panel Affirms

    CHICAGO - An Illinois appeals panel on May 13 affirmed a lower court's ruling that a commercial general liability insurer has no duty to defend against underlying wrongful death and negligence claims arising from a fatal highway accident, rejecting the plaintiff's argument that the insurer is estopped from denying coverage (FHP Tectonics Corporation v. American Home Assurance Co., et al., No. 1-13-0291, Ill. App., 1st Dist., 5th Div.; 2016 Ill. App. Unpub. LEXIS 936).

    Mealey's Insurance - 4th Circuit: Insurer Has Duty To Defend Insureds' Faulty Construction Work

    RICHMOND, Va. - An insurer has a duty to defend insureds in an underlying negligence action filed by homeowners related to construction work performed on a duplex, the Fourth Circuit U.S. Court of Appeals affirmed May 11 (Builders Mutual Insurance Co. v. Ali Ergul, et al., No. 15-1867, 4th Cir.; 2016 U.S. App. LEXIS 8647).

    Mealey's Insurance - Insurer Was Not Obligated To Pay For Independent Counsel, Panel Says In Reversal

    CHICAGO - An Illinois appeals panel on May 11 determined that a lower court erred in ruling that a conflict of interest required an insurer to hire an insured's counsel of choice to defend against an underlying discrimination lawsuit, further finding that the insurer's decision not to pay for independent counsel was neither vexatious nor unreasonable (Maceo Rainey v. Indiana Insurance Co., No. 1-15-0862, Ill. App., 1st Dist., 3rd Div.; 2016 Ill. App. Unpub. LEXIS 916).

    Mealey's Insurance - California Appeals Court Affirms Man's Conviction For Workers' Compensation Fraud

    SAN DIEGO - A California appellate panel on May 12 ruled that a trial court judge did not err when denying a man's request to reduce his convictions for making false statements in connection with a workers' compensation claim from felonies to misdemeanors, holding that the defendant had a prior history of criminal activity and that he did not show remorse for what he did (People v. Chany Lopez, No. D068570, Calif. App., 4th Dist., Div. 1; 2016 Calif. App. Unpub. LEXIS 3510).

    Mealey's Insurance - Ohio High Court: No Coverage For Damages Based On Vicarious Liability In Abuse Suit

    COLUMBUS, Ohio - The Ohio Supreme Court on May 12 found that a commercial liability insurance policy's abuse or molestation exclusion precludes coverage for an award of damages based on an insured's vicarious liability for intentional infliction of emotional distress (IIED) arising from its employee's physical abuse of a minor while in the insured's care and custody, further finding that the policy does not provide coverage for an attorney fees award and post-judgment interest (World Harvest Church v. Grange Mutual Casualty Co., No. 2014-1161, Ohio Sup.; 2016 Ohio LEXIS 1306).

    Mealey's Insurance - Forum-Selection Clause In Contract Must Be Enforced, Indiana Federal Judge Says

    FORT WAYNE, Ind. - An Indiana federal judge on May 12 dismissed an insured's third-party claims filed in the Northern District of Indiana against a remediation company because the contract between the remediation company and the insurer included a forum-selection clause providing that any litigation related to the contract must be filed in the U.S. District Court for the Southern District of Indiana or in the Marion County, Ind., Superior Court (Valley Forge Insurance Co. v. Hartford Iron & Metal Inc., et al., No. 14-006, N.D. Ind.; 2016 U.S. Dist. LEXIS 62658).

    Mealey's Insurance - Maryland Federal Judge Enters Declarations On Allocation And Indemnity Costs

    BALTIMORE - A Maryland federal judge on May 12 granted a motion for partial summary judgment filed by insurers who have not settled any claims with the insured in an asbestos coverage dispute and entered declarations regarding the proper allocation period and the insured's portion of the defense and indemnity obligations (General Insurance Company of America v. The Walter E. Campbell Co. Inc., et al., No. 12-3307, D. Md.; 2016 U.S. Dist. LEXIS 62842).

    Mealey's Insurance - Judge Denies Companion Insurance's Summary Judgment Motion Over Misrepresentation

    BATON ROUGE, La. - A federal judge in Louisiana on May 13 denied Companion Life Insurance Co.'s motion for summary judgment in a breach of contract suit, ruling that the insurer failed to show that the plaintiff intentionally misrepresented in his policy application that he had been previously diagnosed with degenerative disc disease (James McLin v. Companion Life Insurance Company, No. 14cv745, M.D. La.; 2016 U.S. Dist. LEXIS 63400).

    Mealey's Insurance - 9th Circuit Panel Affirms Judgment Against Umbrella Insurer In Environmental Suit

    SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on May 13 affirmed that an umbrella insurer must reimburse two other insurers for an insured's defense costs of approximately $2.1 million in addition to paying prejudgment interest on the defense costs incurred by the insured as a result of environmental contamination claims filed against the insured (Northwest Pipe Co. f/k/a Northwest Pipe and Casing Co. v. RLI Insurance Company of Wausau, No. 14-35542, 9th Cir.; 2016 U.S. App. LEXIS 8837).

    Mealey's Insurance - Insurer Urges Reinsurer To Cooperate In Arbitration Umpire Selection

    MADISON, Wis. - An insurer argues in a May 12 brief in a federal court in Wisconsin that its reinsurer should be ordered to follow a reinsurance agreement's process for choosing an arbitration 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 - Oregon Appeals Court Affirms Conviction, Sentencing For False Health Care Claims

    SALEM, Ore. - An Oregon Court of Appeals panel on May 11 found no error in a woman's conviction for seven counts of making false health care claims and a trial court judge's decision to enhance her sentencing on the basis that the theft convictions did not arise out of the same conduct or criminal episode (State of Oregon v. Vera Andreyevna Spynu, No. A156548, Ore. App.; 2016 Ore. App. LEXIS 574).

    Mealey's Insurance - New York Justice Orders Health Insurer Into Liquidation

    NEW YORK - A New York justice on May 10 granted the state's superintendent of financial services' request to place a health insurer into liquidation and appoint the superintendent as liquidator (In the Matter of the Application of Maria T. Vullo, Acting Superintendent of Financial Services of the State of New York, for an order to take possession of the property of and liquidate the business and affairs of Health Republic Insurance of New York, Corp., No. 450500/2016, N.Y. Sup., New York Co.).

    Mealey's Insurance - Florida Panel Reverses Ruling After Insurer Concedes Error In Sinkhole Dispute

    LAKELAND, Fla. - A Florida appeals panel on May 11 reversed and remanded a lower court's ruling in favor of a homeowners insurer in a sinkhole coverage dispute, noting that the lower court did not have the benefit of three key rulings when it granted the insurer's motion for summary judgment (James Case and Rhonda Case v. Tower Hill Prime Insurance Co., No. 2D15-2225, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 7113).

    Mealey's Insurance - Claims Implicated TCPA Exclusion, Panel Says, Affirms No Coverage Ruling

    CHICAGO - An Illinois appeals panel on May 9 affirmed a lower court's ruling that an insurer has no duty to defend or indemnify its pizzeria insured for an underlying $1,818,000 settlement over claims that it violated the Telephone Consumer Protection Act (TCPA) by sending unsolicited fax ads to 3,636 recipients (Mortesa "Marty" Fayezi, et al. v. Illinois Casualty Co., No. 1-15-0873, Ill. App., 1st Dist., 1st Div.; 2016 Ill. App. Unpub. LEXIS 898).

    Mealey's Insurance - California Federal Judge: Insurers Must Post $1.5M Bond In Asbestos Suit

    SAN FRANCISCO - A California federal judge on May 9 determined that insurers must post a bond of $1.5 million, plus prejudgment interest, in a coverage dispute with Chapter 11 debtor The Flintkote Co. (The Flintkote Company v. Aviva PLC, No. 15-cv-01638, N.D. Calif.; 2016 U.S. Dist. LEXIS 61366).

    Mealey's Insurance - Judge Denies Dismissal Motions Of Suit Brought By Insolvent Insurer's Trustee

    TAMPA, Fla. - A federal bankruptcy judge in Florida on May 6 denied a group of investors' motions to dismiss a suit brought by the bankruptcy trustee of an insolvent insurer alleging a fraudulent $33.4 million stock transfer (Soneet R. Kapila, as Chapter 11 Trustee of Universal Health Care Group, Inc. v. Warburg Pincus, LLC, et al., No. 8:15-ap-132-KRM, M.D. Fla. Bkcy.; 2016 Bankr. LEXIS 1957).

    Mealey's Insurance - Judge Retains Seal On Asbestos-Related Reinsurance Arbitration Award

    NEW YORK - A federal judge in New York on May 9 granted a reinsurer's and its reinsured's joint motion to keep an asbestos-related arbitration award under seal (Continental Insurance Company v. Fairmont Premier Insurance Company f/k/a Transamerica Premier Insurance Company, No. 16-cv-00655, S.D. N.Y.).

    Mealey's Insurance - Oregon Federal Magistrate Allocates Defense Costs Owed To Insureds

    PORTLAND, Ore. - An Oregon federal magistrate judge on May 6 determined that the proper allocation method for calculating insureds' defense costs is a pro rata by time on the risk method and said that the insurers are required to pay their portion of the defense costs owed to the insureds for underlying environmental contamination claims within 30 days (Century Indemnity Co. v. The Marine Group LLC, et al., No. 08-1375, D. Ore.; 2016 U.S. Dist. LEXIS 60339).

    Mealey's Insurance - Insured's Expert Fails To Show Appraisal Award Was Fraudulent, Judge Concludes

    JACKSON, Miss. - An insured's expert fails to present supporting documentation that an appraisal award for destroyed contents in a warehouse fire was "grossly inadequate or excessive as to amount to a fraud in effect," a Mississippi federal judge ruled May 6, excluding the testimony and granting summary judgment to an insurer (Michael McElroy Sr., et al. v. Evanston Insurance Co., No. 14-180, S.D. Miss.; 2016 U.S. Dist. LEXIS 60501).

    Mealey's Insurance - Evidence Supports Insurer's Coverage Denial For Water Damages, Federal Judge Says

    PHILADELPHIA - A Pennsylvania federal judge on May 5 granted judgment in favor of an insurer in a water damage suit after determining that the insurer's denial of coverage was reasonable based on the clear language of the policy's maintenance exclusion (David Dougherty v. Allstate Property and Casualty Insurance Co., No. 14-7270, E.D. Pa.; 2016 U.S. Dist. LEXIS 59667).

    Mealey's Insurance - 1 Sublimit Applies For All Injured Crew Members, Texas Federal Judge Says

    HOUSTON - A Texas federal judge on May 5 said an insurer is required only to pay the full amount of a sublimit for all of the crew members injured when an insured ship exploded and caused an oil spill in the Gulf of Mexico rather than separate sublimits for each of the four crew members injured in the explosion (United Specialty Insurance Co. v. Porto Castelo Inc. et al., No. 15-1036, S.D. Texas; 2016 U.S. Dist. LEXIS 59715).