LexisNexis® Legal Newsroom
    Mealey's Insurance - New York Federal Judge Denies Motion To Review, Says No New Evidence Presented

    NEW YORK - A New York federal judge on April 15 denied an insurer's motion for reconsideration on the basis that the insurer failed to offer any new evidence or point to any changes in controlling law that would support reviewing the federal court's earlier decision in favor of a reinsurer (Global Reinsurance Corporation of America v. Century Indemnity Company, No. 13-cv-06577, S.D. N.Y.; 2015 U.S. Dist. LEXIS 50236).

    Mealey's Insurance - 8th Circuit Upholds Daubert Rulings In Suit Over Lightning Strike Fire

    ST. LOUIS - A trial court properly applied the standards of Daubert v. Merrell Dow Pharmaceuticals Inc. (509 U.S. 579, 592-93 [1993]) in partly excluding an insurer's expert report and in admitting a tubing firm's expert's testimony, an Eighth Circuit U.S. Court of Appeals panel ruled April 15, finding no error in the lower court's ruling (American Automobile Insurance Co. v. Omega Flex Inc., No. 14-1783, 8th Cir.; 2015 U.S. App. LEXIS 6091).

    Mealey's Insurance - Judge: No Coverage For Alleged Scheme Involving Medical Records Processing Fees

    CHARLESTON, W.Va. - A West Virginia federal judge on April 16 found that the "common theme" of an underlying complaint against a hospital and a records-imaging and storage company is deliberate, intentional conduct that led to an expected, desired or foreseeable result and not a chance occurrence that arose from unknown causes, finding that an insurer has no duty to defend or indemnify the defendants against claims that they violated public policy by engaging in a scheme that misrepresented the availability of a more reasonable cost of receiving medical records (Westfield Insurance Co. v. Records Imaging & Storage Inc., et al., No. 14-18854, S.D. W.Va.; 2015 U.S. Dist. LEXIS 49986).

    Mealey's Insurance - Coverage For Insured Is Clearly Limited To $100,000, New York Appellate Panel Says

    BROOKLYN, N.Y. - Because a policy clearly provides for a maximum of $100,000 in coverage for cleanup and removal of the discharge of a pollutant caused by a "peril" that occurs during a policy period, the maximum amount of coverage available to an insured seeking coverage for the release of gasoline from an underground storage tank at its service station is $100,000, the Second Department Appellate Division of the New York Supreme Court said April 15 (L & D Service Station, Inc., v. Utica First Insurance Co., et al., No. 2013-05805, N.Y. Sup., App. Div., 2nd Dept.; 2015 N.Y. App. Div. LEXIS 3084).

    Mealey's Insurance - 'Your Work' Exclusion Bars Coverage For Insured's Faulty Work, Panel Affirms

    CORPUS CHRISTI, Texas - Allegations of an insured's defective work are precluded under a commercial general liability insurance policy's "your work" and subsidence exclusions, a Texas appeals panel affirmed April 16, finding no duty to defend or indemnify (Adolfo Vela d/b/a Adelco Enterprises v. Catlin Specialty Insurance Co., et al., No. 13-13-00475, Texas App., 13th Dist.; 2015 Tex. App. LEXIS 3743).

    Mealey's Insurance - Judge: Fact Issues Exist On Insurer's Defense For Faulty Work, Failure-To-Warn Claims

    PHILADELPHIA - Factual questions remain as to whether an insurer had a duty to defend an additional insured against allegations of negligent construction and failure to warn, a Pennsylvania federal judge ruled April 14 (Citizens Insurance Company of America v. Selective Way Insurance Co., No. 14-6232, E.D. Pa.; 2015 U.S. Dist. LEXIS 49840).

    Mealey's Insurance - Judge: Claims In Bad Faith Suit Governed By State's Division Of Insurance

    LAS VEGAS - Dismissal of an insurance bad faith lawsuit is proper, a federal judge in Nevada ruled April 13, because an insured's claims are governed by the state's Division of Insurance, which has exclusive jurisdiction over the claims (Desiree DeCastro v. Progressive Northern Insurance Co., et al., No. 14-0983, D. Nev.; 2015 U.S. Dist. LEXIS 48273).

    Mealey's Insurance - Judge: Coverage For University Building's Damage To Be Determined On Pro-Rata Basis

    HATTIESBURG, Miss. - A Mississippi federal judge on April 13 found that coverage for tornado damage to a building owned by the University of Southern Mississippi and leased to a nonprofit corporation is to be determined on a pro-rata basis according to the coverage limits of the university's policy and the nonprofit's policy and that the $500 million total limit of the university's policy is to be used in the pro-rata calculation (Southern Insurance Co. v. Affiliated FM Insurance Co., et al., No. 13-263, S.D. Miss., Eastern Div.; 2015 U.S. Dist. LEXIS 48217).

    Mealey's Insurance - Magistrate Judge Denies Protective Orders For Insurers In Defects Coverage Dispute

    DENVER - A Colorado magistrate federal judge on April 14 denied motions for protective orders filed by insurers regarding underwriting files, reserves and reinsurance in a dispute arising from coverage in an underlying construction defect case (The Phoenix Insurance Co., et al. v. Cantex Inc., et al. and Cantex Inc. v. Scottsdale Insurance Co. and Continental Casualty Co., No. 13-00507, D. Colo.; 2015 U.S. Dist. LEXIS 49502).

    Mealey's Insurance - Doctor Sentenced To 135 Months In Prison Over Health Care Fraud Scheme

    TYLER, Texas - A federal judge in Texas on April 14 sentenced a doctor found guilty of conspiracy to commit health care fraud, seven counts of health care fraud and seven counts of aggravated identity theft to 135 months in prison and ordered him to pay $599,128.02 in restitution (United States of America v. Tariq Mahmood, No. 13-cr-00032, E.D. Texas).

    Mealey's Insurance - Judge: Insurance Agent Not Fraudulently Joined In Insurance Bad Faith Suit

    OKLAHOMA CITY - A federal judge in Oklahoma on April 14 remanded an insurance bad faith lawsuit to state court, ruling that an insurance agent was not fraudulently joined in the action (Eileen Caballero v. Safeco Insurance Company of America Inc., et al., No. 14-1336, W.D. Okla.; 2015 U.S. Dist. LEXIS 48735).

    Mealey's Insurance - Judgment Does Not Trigger Excess Insurer's Duty To Defend, Judge Concludes

    SAN JOSE, Calif. - A contractor cannot allege that its judgment against a subcontractor for faulty work exceeds $2 million, thereby triggering an excess insurer's duty to defend, a California federal judge ruled April 14, granting dismissal of breach of contract and bad faith claims against the excess insurer (Nordby Construction Inc. v. American Safety Indemnity Co., et al., No. 14-04074, N.D. Calif.; 2015 U.S. Dist. LEXIS 49048).

    Mealey's Insurance - Judge Denies Summary Judgment In Dispute Between Developer, Architect's Insurer

    BALTIMORE - A Maryland federal judge on April 13 denied dueling summary judgment motions in a coverage dispute between a real estate developer and its architect's professional liability insurer, finding that fact issues preclude summary judgment rulings (McDowell Building LLC v. Zurich American Insurance Co., No. 12-2876, D. Md.; 2015 U.S. Dist. LEXIS 47904).

    Mealey's Insurance - New York Federal Judge Orders Insurer To Pay Almost $9M In Attorney Fees

    NEW YORK - A New York federal judge on April 14 adopted a federal magistrate's recommendation that an insurer pay its insureds almost $9 million for attorney fees incurred as a result of the insurer's breach of its duty to defend the insureds against underlying asbestos and silica claims (Danaher Corp. v. Travelers Indemnity Co., et al., No. 10-0121, S.D. N.Y.; 2015 U.S. Dist. LEXIS 48769).

    Mealey's Insurance - Magistrate Judge: Service Via P.O. Box Is Acceptable In Insurance Fraud Suit

    TRENTON, N.J. - A federal magistrate judge in New Jersey on April 14 granted an insurance company's motion for substituted service on a defendant in an insurance fraud suit, finding that the company has actively attempted to locate the defendant's address (Government Employees Insurance Company v. Scott Greenberg, et al., No. 14-2904, D. N.J.; 2015 U.S. Dist. LEXIS 48573).

    Mealey's Insurance - Judge: Date Of Accrual Will Determine If Defendants Can Seek Punitive Damages

    KNOXVILLE, Tenn. - A federal judge in Tennessee on April 14 ruled that a jury will be instructed that a couple defending against claims from their insurance company that they intentionally set a fire in September 2010 to destroy their home can obtain common-law punitive damages only on their counterclaims for breach of contract, treble damages for their counterclaim under the Tennessee Consumer Protection Act (TCPA) and a bad faith penalty under Tennessee insurance law if their claim accrued before April 2011 (American National Property & Casualty Company v. Carol Ann Stutte, et al., No. 11-CV-219, E.D. Tenn.; 2015 U.S. Dist. LEXIS 48726).

    Mealey's Insurance - 10th Circuit Affirms Ruling In Insurer's Favor In Dispute Over Notice-Prejudice Rule

    DENVER - The 10th Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court's ruling in favor of a directors and officers liability insurer after the Colorado Supreme Court, in answering two certified questions, held that the notice-prejudice rule does not apply to the date-certain notice requirement of claims-made insurance policies (Dean Craft v. Philadelphia Indemnity Insurance Co., No. 13-1209, 10th Cir.; 2015 U.S. App. LEXIS 6032).

    Mealey's Insurance - Federal Judge Remands Insurance Bad Faith Case To State Court

    OKLAHOMA CITY - A federal judge in Oklahoma on April 13 remanded an insurance bad faith lawsuit to state court, ruling that no evidence exists to show that insureds cannot prove any facts that would entitle them to relief (Philip Mayer, et al. v. Horace Mann Insurance Co., et al., No. 14-1381, W.D. Okla.; 2015 U.S. Dist. LEXIS 47850).

    Mealey's Insurance - Florida Panel Quashes Trial Court's Order In Sinkhole Coverage Dispute

    LAKELAND, Fla. - A Florida appeals panel on April 10 granted a petition for writ of certiorari by Florida Insurance Guaranty Association (FIGA) and quashed a lower court's order granting insureds' motion for partial summary judgment regarding liability and damages associated with subsurface repair costs in a sinkhole damage coverage dispute (Florida Insurance Guaranty Association v. Chad Murphy & Lorraine Murphy, No. 2D13-5609, Fla. App., 2nd Dist.; 2015 Fla. App. LEXIS 5256).

    Mealey's Insurance - Federal Jury Enters Verdict In Favor Of Mattress Maker For Underlying Mold Suits

    MINNEAPOLIS - A Minnesota federal jury on April 10 entered a verdict in favor of a mattress maker for more than $400,000 after determining that coverage is owed for an underlying action filed against the insured in which consumers alleged that mattresses developed mold (Select Comfort Corp. v. Arrowood Indemnity Co., et al., No. 13-2975, D. Minn.).

    Mealey's Insurance - Insurer Had No Duty To Defend Misrepresentation, Trespass Claims, Judge Says

    RENO, Nev. - A commercial general liability insurer had no duty to defend insureds against negligence, negligent misrepresentation, intentional misrepresentation and trespass claims regarding improper construction work and dumping, a Nevada federal judge ruled April 13, also dismissing the insureds' bad faith counterclaim (Benchmark Insurance Co. v. G.L. Construction Co., et al., No. 14-00326, D. Nev.; 2015 U.S. Dist. LEXIS 48322).

    Mealey's Insurance - Nebraska High Court: Arbitration Stay Is Not An Appealable Final Order

    OMAHA, Neb. - The Nebraska Supreme Court on April 10 affirmed a lower court decision to stay a reinsurance arbitration proceeding while the lower court decides on who is the proper arbitrator of the dispute, holding that the lower court's decision is not a final decision and therefore not appealable (Shasta Linen Supply, Inc. v. Applied Underwriters, Inc., et al., No. S-14-270, Neb. Sup.; 2015 Neb. LEXIS 72).

    Mealey's Insurance - Virginia Federal Judge Dismisses Contaminated Oil Suit; Parties Reach Settlement

    ALEXANDRIA, Va. - A Virginia federal judge on April 9 dismissed a lawsuit seeking coverage for damages arising out of contaminated oil because the parties reached a settlement and the insured did not object to the dismissal of the suit (FCC Environmental LLC v. AIG Specialty Insurance Co., No. 14-1316, E.D. Va.).

    Mealey's Insurance - Federal Judge: Coverage Turns On Discovery Of Loss, Not When Loss Was Reported

    PHOENIX - An Arizona federal judge on April 9 found that coverage turns on discovery within the policy period of a loss to real property for which an insured negligently failed to obtain insurance, not on when the loss was reported to the insurer, denying the insurer's motion to dismiss a breach of contract, bad faith and negligence lawsuit (11333 Inc. v. Certain Underwriters at Lloyd's, London, et al., No. 14-02001, D. Ariz.; 2015 U.S. Dist. LEXIS 46498).

    Mealey's Insurance - Application Exclusion Bars Professional Liability Coverage, California Panel Says

    LOS ANGELES - A California appeals panel on April 10 affirmed a lower court's ruling that a professional liability insurance policy's application exclusion precludes coverage for claims made against a securities broker-dealer insured involving an alleged real estate investment Ponzi scheme, finding that three undisclosed claims should have been disclosed to the insurer during the application process because they arose out of the same events as the one disclosed claim (Crown Capital Securities L.P. v. Endurance American Specialty Insurance, No. B256241, Calif. App., 2nd Dist., Div. 5.; 2015 Cal. App. LEXIS 305).