ALBANY, N.Y. - An insurer is obligated to provide directors and officers liability coverage for the defense expenses incurred in two underlying lawsuits by former trustees of an insolvent workers' compensation self-insurance trust, a New York federal judge ruled June 23 (Judy Balaban-Krauss et al. v. Executive Risk Indemnity Inc., No. 13-282, N.D. N.Y.; 2015 U.S. Dist. LEXIS 80817).
ST. LOUIS - There are issues of material fact regarding whether an insurer could comply with its contractual obligation to provide the replacement cost "for equivalent construction and use on the same premises," a Missouri appeals panel ruled June 23, finding that a trial court erred in granting summary judgment to the insurer (Deborah J. Alessi v. Mid-Century Insurance Company Inc., No. ED102261, Mo. App., Eastern Dist., Div. 3; 2015 Mo. App. LEXIS 679).
SAN FRANCISCO - A pollution liability insurer has no duty to reimburse $241,392.87 to a commercial general liability insurer for costs incurred in defending underlying lawsuits arising out of damages from construction work, the Ninth Circuit U.S. Court of Appeals ruled June 23, finding that the pollution liability policy was excess and did not apply until the primary coverage was exhausted (Gemini Insurance Co. v. Indian Harbor Insurance Co., No. 13-16643, 9th Cir.; 2015 U.S. App. LEXIS 10616).
ST. LOUIS - A federal judge did not err in granting summary judgment in an insurance bad faith lawsuit because an insured failed to show that his insurer acted in bad faith by failing to reach a settlement with certain claimants for the full policy limit, an Eighth Circuit U.S. Court of Appeals panel ruled June 22 (Ben Purscell v. Tico Insurance Co., et al., No. 13-2362, 8th Cir.; 2015 U.S. App. LEXIS 10438).
BOSTON - After being granted leave to file an amended answer, a reinsurer asked a federal court in Massachusetts on June 18 to award it more than $7 million from its reinsured (OneBeacon America Insurance Company v. Transatlantic Reinsurance Company, No. 14-cv-14067, D. Mass.).
BOSTON - A federal judge in Massachusetts on June 19 lifted a stay on a reinsurance dispute in an electronic order after learning that a panel had made its final ruling in the underlying arbitration (OneBeacon America Insurance Company, et al. v. Allstate Insurance Company, No. 14-cv-12562, D. Mass.).
HARRISBURG, Pa. - An insurance policy's wear-and-tear provision excludes coverage for an insured's claimed loss from water damage during Superstorm Sandy, a Pennsylvania federal judge ruled June 22 (Steven J. Inc. v. Landmark American Insurance Co., No. 14-0474, M.D. Pa.; 2015 U.S. Dist. LEXIS 80278).
CINCINNATI - Exclusions for cracking and defective design do not apply under a business owners insurance policy to a collapse extension, and there are genuine issues of material fact as to whether decay occurred, the Sixth Circuit U.S. Court of Appeals held June 22, reversing the grant of summary judgment to an insurer and remanding the case for further proceedings (Joy Tabernacle-The New Testament Church v. State Farm Fire and Casualty Co., No. 14-2160, 6th Cir.).
AUSTIN, Texas - A Texas appeals panel held June 18 that an insurer did not waive any geographic limitation to its commercial personal property policy coverage because the covered locations were described in the renewal certificate and supplemental declarations of the policy, affirming a lower court's ruling in favor of an insurer in a coverage dispute over a filmmaker's archive of materials destroyed in a wildfire (3109 Props, L.L.C., et al. v. Truck Insurance Exchange, No. 03-13-00350-CV, Texas App., 3rd Dist.; 2015 Tex. App. LEXIS 6146).
NEW YORK - A Second Circuit U.S. Court of Appeals panel on June 22 affirmed the conviction and sentencing of three defendants accused of submitting false disability claims to the Long Island Railroad's (LIRR) Railroad Retirement Board (RRB), finding that the defendants were unable to show that the U.S. District Court for the Southern District of New Hampshire was an improper forum (United States of America v. Joseph Rutigliano, et al., Nos. 14-152, 14-759, 14-1339, 2nd Cir.; 2015 U.S. App. LEXIS 10443).
RENO, Nev. - A Nevada federal judge on June 18 approved a settlement between a commercial general liability insurer and its insured and vacated orders finding that the insurer has a duty to defend an underlying construction defects case because a designated work exclusion and a pre-existing damage exclusion do not apply (Gemini Insurance Co. v. North American Capacity Insurance Co., No. 14-00121, D. Nev.; 2015 U.S. Dist. LEXIS 80239).
SAN DIEGO - A federal judge in California on June 19 granted an insurer's motion to dismiss in an insurance bad faith lawsuit, ruling that an insured failed to state a claim for relief on any of his claims filed (Edmond Petrus, et al. v. New York Life Insurance Co., et al., No. 14-2268, S.D. Calif.; 2015 U.S. Dist. LEXIS 79306).
NEW ORLEANS - A Louisiana federal judge on June 18 rejected an insurer's argument that a now-deceased plaintiff's deposition testimony should be excluded after determining that the insurer, which was not present when the depositions were held, was represented by the presence of its predecessor in interest at the depositions (Sally Gros Vedros, et al. v. Northrop Grumman Shipbuilding Inc., et al., No. 11-1198, E.D. La.; 2015 U.S. Dist. LEXIS 79219).
WASHINGTON, D.C. - The U.S. Department of Justice (DOJ) announced June 18 that Covenant Hospice Inc., a nonprofit hospice care provider, agreed to pay $10.1 million for overcharging Medicare, Medicaid and Tricare for hospice services.
NEW YORK - A New York appeals panel on June 18 held that a financial institution bond's requirement that a loss be attributable to a defrauder acting solely in his or her capacity as an investment adviser was not satisfied, reversing and remanding a lower court's finding that an insurer has a duty to insure a loss arising from Bernard Madoff fictitious reporting of the value of an investment management company's assets (Jacobson Family Investments Inc., et al. v National Union Fire Insurance Company of Pittsburgh, PA, et al., No. 14802, 601325/10, N.Y. Sup., App. Div., 1st Dept.; 2015 N.Y. App. Div. LEXIS 5175).
ATLANTA - The 11th Circuit U.S. Court of Appeals on June 22 affirmed a lower federal court's finding that there is no directors and officers liability insurance coverage for beneficiaries' claims against their family-owned corporation and two family members who served as directors or officers of the corporation and as trustees of the family trust (The Langdale Co. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 14-12723, 11th Cir.; 2015 U.S. App. LEXIS 10419).
SAN FRANCISCO - An insured's alleged negligence is barred by a subsidence exclusion because the negligence arises from its "operations," which include maintenance of its landscape, construction activities on its property and its irrigation and drainage systems, a California federal judge ruled June 18 (Philadelphia Indemnity Insurance Co. v. Lakeside Heights Homeowners Association, No. 14-04450, N.D. Calif.; 2015 U.S. Dist. LEXIS 80033).
ST. LOUIS - A federal judge in Missouri on June 18 ruled that State Auto Property & Casualty Co. was entitled to an award of attorney fees and $40,000 in advances it paid to a couple who allegedly submitted a fraudulent fire loss claim, ruling that the defendants' misrepresentations constituted a special circumstance that warranted an award of attorney fees (State Auto Property and Casualty Company v. Genny Larkin, et al., No. 12CV1853, E.D. Mo.; 2015 U.S. Dist. LEXIS 79540).
SAN FRANCISCO - All property damage arising from an insured's alleged failure to disclose discoloration in its roofing tiles claimed in a class action resulted from misrepresentations, which are not accidental occurrences, a California appeals panel affirmed June 18 (Monier Inc. v. American Home Assurance Co. and Travelers Indemnity Co., No. A138976, Calif. App., 1st Dist., Div. 3; 2015 Cal. App. Unpub. LEXIS 4361).
CAMDEN, N.J. - An insured failed to establish its breach of contract and bad faith claims against its insurer for denying property damage sustained during Superstorm Sandy based upon a policy's water exclusion, a New Jersey federal magistrate judge found June 18, granting summary judgment to the insurer (151 East Leaming Avenue Condo Association v. QBE Specialty Insurance Co., No. 14-175, D. N.J.; 2015 U.S. Dist. LEXIS 79002).
SAN FRANCISCO - A general contractor was not an additional insured to a subcontractor's insurance policy, a California federal judge ruled June 17, finding that the contractor's insurer has no right to seek reimbursement of defense fees and costs arising from underlying construction defect cases against the contractor and subcontractor (Navigators Specialty Insurance Co. v. St. Paul Surplus Lines Insurance Co., et al., No. 13-03499, N.D. Calif.; 2015 U.S. Dist. LEXIS 79338).
PORTLAND, Ore. - An insurer must pay a homeowner $84,379.23 for costs arising from an underlying arbitration award issued against an insured contractor in a construction defects case that are not excluded by the "your work" exclusion, an Oregon federal judge ruled June 16 (American Hallmark Insurance Company of Texas v. Journey Built Homes LLC and Jennifer Werner, No. 12-01020, D. Ore.; 2015 U.S. Dist. LEXIS 78882).
OLYMPIA, Wash. - "Collapse" in an insurance policy means the substantial impairment of structural integrity of a building or part of a building that renders such building or part of a building unfit for its function or unsafe in a manner that is more than mere settling, cracking, shrinkage, bulging or expansion, the Washington Supreme Court ruled June 18 (Queen Anne Park Homeowners Association v. State Farm Fire and Casualty Co., No. 90651-3, Wash Sup.; 2015 Wash. LEXIS 695).
NEW ORLEANS - A federal district court did not err in granting summary judgment in an insurance bad faith lawsuit because an insured failed to show that his insurer lacked a reasonable basis to deny his claim or pay the policy limits, a Fifth Circuit U.S. Court of Appeals panel ruled on June 17 (Daniel F. Dey v. State Farm Mutual Automobile Insurance Co., No. 14-60300, 5th Cir.; 2015 U.S. App. LEXIS 10188).
WEST PALM BEACH, Fla. - A Florida appeals panel on June 17 reversed and remanded a lower court's ruling as to taxable court costs in a coverage dispute over damages sustained to the insured's condominium by leaking fluids from a decomposing body (Judy Rodrigo v. State Farm Florida Ins. Co., No. 4D13-3393, Fla. App., 4th Dist.; 2015 Fla. App. LEXIS 9263).