HARRISBURG, Pa. - The Pennsylvania Supreme Court on July 20 affirmed a lower court decision that the rehabilitation of two insolvent insurers should not be converted to a liquidation process (In re: Penn Treaty Network America Insurance Company in Rehabilitation, No. 94 MAP 2012, Pa. Sup., Middle Dist.; In re: American Network Insurance Company In Rehabilitation, No. 95 MAP 2012, Pa. Sup., Middle Dist.).
TRENTON, N.J. - Consequential damages caused by subcontractors' defective work that were unintended and unexpected constitute "property damage" and an "occurrence" under commercial general liability insurance policies, a New Jersey appeals panel ruled July 21, applying the subcontractor exception to the "your work" exclusion (Bob Meyer Communities Inc. v. James R. Slim Plastering Inc., et al., No. A-5581-12T1, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1754).
NEW YORK - One of three insurance companies sued by Chapter 11 debtor Rapid-American Corp. and its asbestos creditors for $64 million in remaining policy limits for asbestos claims on July 20 withdrew its dismissal motion in New York federal bankruptcy court in favor of allowing the debtor to file its proposed amended complaint (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).
WILMINGTON, Del. - Asbestos personal injury claimants' negligence and bad faith claims against an insurance company are barred not only by an injunction in former Chapter 11 debtor W.R. Grace & Co.'s bankruptcy case but also by past litigation in which the same claims were twice found to be subject to the injunction, the insurer says in a July 17 brief filed in response to the claimants' summary judgment bid in Delaware federal bankruptcy court (In re: W.R. Grace & Co., et al., No. 01-01139 [Ralph Hutt and Carl Osborn v. Maryland Casualty Company, No. 14-50867], D. Del. Bkcy.).
NEW YORK - An insured is required to reimburse its insurers for defense costs that were paid in connection with an underlying suit arising out of an oil spill because no coverage is owed for the underlying suit, which seeks only economic losses incurred as the result of the seizure of its oil, a New York federal judge said July 16 (Petroterminal De Panama S.A. v. Houston Casualty Co., et al., No. 14-9554, S.D. N.Y.; 2015 U.S. Dist. LEXIS 92653).
TRENTON, N.J. - Unintended and unexpected consequential damages caused by faulty work of subcontractors constitute "property damage" and an "occurrence" under commercial general liability insurance policies, a New Jersey appeals panel ruled July 21 (Belmont Condominium Association Inc. v. Arrowpoint Capital Corp., et al., No. A-4187-12T4, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1749).
SAN ANTONIO - A federal judge in Texas on July 17 granted an insured's motion for leave to file an amended complaint in an insurance bad faith lawsuit, ruling that the primary purpose of the amended complaint is not to defeat federal jurisdiction (Eloy Flores v. Arch Insurance Co., No. 15-299, W.D. Texas; 2015 U.S. Dist. LEXIS 93645).
CAMDEN, N.J. - A federal judge in New Jersey on July 17 denied an insurer's motion for summary judgment in an insurance bad faith lawsuit, ruling that the insurer's letter partially denying coverage on a homeowners insurance policy was ambiguous (Joseph Liguori, et al. v. Certain Underwriters at Lloyds London Subscribing to Policy #AJD8955, No. 14-5898, D. N.J.; 2015 U.S. Dist. LEXIS 93090).
TRENTON, N.J. - A New Jersey appeals panel on July 20 reversed a lower court's ruling that a homeowners insurer has a duty to defend its insureds against a negligent supervision claim stemming from sexual molestation claims against their teenage son, vacating the court's award of $44,656.32 in attorney fees to the insureds (P.D and J.D., individually and on behalf of M.D. v. The Germantown Insurance Co., et al., No. A-3829-12T2, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1731).
LOS ANGELES - Because an insurer failed to comply with its policy's mediation provision, a California federal judge on July 17 granted a motion to dismiss the insurer's declaratory judgment suit related to coverage for a data breach, holding that nonjudicial remedies had not yet been exhausted (Columbia Casualty Co. v. Cottage Health System, No. 2:15-cv-03432, C.D. Calif.; 2015 U.S. Dist. LEXIS 93456).
NEW YORK - A group of London market reinsurers told a federal court in New York on July 17 that their demand for a second arbitration with their reinsured to recover more than $17 million is not an attempt to nullify the court's confirmation of an earlier arbitration award (Arrowood Indemnity Co. v. Equitas Insurance Limited, et al., No. 13-cv-07680, S.D. N.Y.).
ORLANDO, Fla. - A condominium association's claim of negligent supply of information was not the cause of insureds' faulty construction that resulted in water intrusion and other property damage, a Florida federal judge ruled July 20, granting summary judgment to an insurer with regard to the claim (St. Paul Fire & Marine Insurance Co. v. Cypress Fairway Condominium Association Inc., et al., No. 13-1088, M.D. Fla.; 2015 U.S. Dist. LEXIS 94012).
ATLANTA - A federal district court did not abuse its discretion by holding that a disability plan's claims administrator and plan administrator are not liable for penalties and attorney fees under the Employee Retirement Income Security Act for failure to provide plan documents to a plan participant, the 11th Circuit U.S. Court of Appeals ruled July 17 in an unpublished opinion (Allena Burge Smiley, D.M.D. v. Hartford Life and Accident Insurance Company, No. 15-10056, 11th Cir.; 2015 U.S. App. LEXIS 12334).
SAN JOSE, Calif. - A California federal magistrate judge on July 15 granted in part and denied in part an insurer's motion to compel an insured to respond further to its first set of requests for production in a coverage lawsuit over an underlying trade secret dispute (Silicon Storage Technology Inc. v. National Union Fire Insurance Co. of Pittsburgh, Pa., et al., No. 13-05658, N.D. Calif.; 2015 U.S. Dist. LEXIS 92775).
BOSTON - A Massachusetts federal judge on July 15 granted an insured's motion to transfer an insurer's suit to Illinois federal court because the State of Illinois has a greater interest in resolving the dispute as it involves the cleanup of contaminated property within Illinois (Federal Insurance Co. v. XTRA Intermodal Inc., et al., No. 14-14010, D. Mass.; 2015 U.S. Dist. LEXIS 91992).
NEW YORK - A New York justice on July 15 issued an order to show cause regarding the requested approval of an agreement between the liquidator of an insolvent insurer and certain states' insurance guaranty associations (In the Matter of the Liquidation of Centennial Insurance Company, No. 402424/10, N.Y. Super., New York Co.).
ATLANTA - The 11th Circuit U.S. Court of Appeals on July 17 held that a property owner's complaint against the property's former owners alleged only economic losses and failed to allege covered "property damage" under a "Masterpiece" insurance policy, affirming a lower court's ruling that the insurer has no duty to defend against the underlying dispute (Phillip O'Dell, as Assignee of Roland B. Mahoney and Sandra R. Mahoney v. Pacific Indemnity Co., No. 14-14457, 11th Cir.; 2015 U.S. App. LEXIS 12374).
BALTIMORE - Expert witnesses for the U.S. government in a case alleging that actions of the operator of a mobile X-ray business in committing Medicare fraud caused the deaths of four people can testify as to the "but-for" causation of death standard for two of the deceased patients but cannot testify about the but-for cause of bodily injury because the government relies on an incorrect definition of that standard, a Maryland federal judge held July 14 (United States of America v. Rafael Chikvashvili, No. 14-0423, D. Md.; 2015 U.S. Dist. LEXIS 91680).
FORT SMITH, Ark. - An insurer is to produce certain documents pertaining to a construction project at issue in a subrogation lawsuit over costs associated with payment to complete and repair a subcontractor's work, an Arkansas federal judge ruled July 16 (Hartford Fire Insurance Co. v. The Harris Company of Fort Smith Inc. v. Limestone Development LLC and ARK-CON Testing Service Inc., No. 14-02096, W.D. Ark.; 2015 U.S. Dist. LEXIS 92607).
ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on July 16 found that it was not unreasonable for a jury to determine that an insurer suffered no prejudice from its insured's delay in giving notice of a claim for a fire loss, which was caused by the spontaneous combustion of a country club's recently laundered kitchen rags that had been used to clean a fryer containing the insured's soybean oil (Michigan Millers Mutual Insurance Co. v. Asoyia Inc. et al., No. 14-2270, 8th Cir.; 2015 U.S. App. LEXIS 12321).
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on July 16 affirmed a lower federal court's ruling that a professional liability insurer has no duty to defend its insured against a bank's underlying claim that it discovered a $10.5 million shortfall in the depository accounts it was providing for the insured's customers (NetSpend Corp. v. Axis Insurance Co., et al., No. 14-50878, 5th Cir.).
TRENTON, N.J. - Defendants accused of being involved in an $8.1 million scheme to defraud an insurance company in violation of the Insurance Fraud Prevention Act (IFPA) have the right to a jury trial, the New Jersey Supreme Court ruled July 16, holding that the state's Legislature intended the statute to conform with the New Jersey Constitution (Allstate New Jersey Insurance Company, et al. v. Gregorio Lajara, et al., No. A-70 September Term 2013, 073511, N.J. Sup.; 2015 N.J. LEXIS 797).
SYRACUSE, N.Y. - A federal judge in New York on July 14 affirmed a magistrate judge's ruling denying a reinsurer's motion to compel discovery, holding that the magistrate judge's ruling was not clearly erroneous or contrary to the law (Utica Mutual Insurance Company v. Clearwater Insurance Company, No. 13-cv-01178, N.D. N.Y.).
BALTIMORE - A commercial general liability insurer has a duty to defend an insured in an underlying action because the alleged property damage, as the result of the insured's failed water treatment in a heating, venting and air conditioning (HVAC) system, constitutes an "occurrence," a Maryland federal judge ruled July 16 (State Automobile Mutual Insurance Co. v. Old Republic Insurance Co., et al., No. 14-2989, D. Md.; 2015 U.S. Dist. LEXIS 92707).
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on July 15 held that the estate of a man who was killed when an inflatable slide fell on top of him at a Kids Fun Day event at a Cleveland Indians baseball game failed to establish negligence and breach of contract claims against an insurance broker (Kimberly Johnson, as executrix of the estate of Douglas Johnson, deceased v. Doodson Insurance Brokerage of Texas LLC d/b/a CSI Special Insurance Group d/b/a CSI Insurance Group, No.14-1379, 6th Cir.; 2015 U.S. App. LEXIS 12150).