SYRACUSE, N.Y. - Genuine issues of material fact exist as to whether a collapse falls under a resulting loss exception to an insurance policy's faulty design and workmanship exclusion, a New York federal judge ruled May 13, denying summary judgment to insureds and an insurer (Binghamton-Johnson City Joint Sewage BD, et al. v. American Alternative Insurance Corp., No. 12-0553, N.D. N.Y.; 2015 U.S. Dist. LEXIS 62551).
ELGIN, Ill. - An Illinois appeals panel on May 13 found that an insurer has no duty to defend or indemnify its insured against an $8 million settlement stemming from claims that the insured transmitted unsolicited fax advertisements, once again reversing a lower court in part (G.M. Sign Inc. v. Pennswood Partners Inc., No. 2-12-1276, Ill. App., 2nd Dist.; 2015 Ill. App. LEXIS 356).
SAN FRANCISCO - A California federal judge on May 12 transferred an insurer's coverage action regarding its duty to defend insureds for their alleged defective construction of a runway for an airport to another California federal court (American Home Assurance Co. v. Tutor-Saliba Corp./O&G Industries Inc., et al., No. 15-00303, N.D. Calif.; 2015 U.S. Dist. LEXIS 62347).
SAN FRANCISCO - A California federal judge on May 11 stayed an insurer's coverage action against its insureds pending resolution of the underlying construction defects case arising out of the conversion of an apartment building because the case involves similar overlapping issues (Atain Specialty Insurance Co. v. 20 Parkridge LLC, et al., No. 15-00212, N.D. Calif.; 2015 U.S. Dist. LEXIS 62291).
DETROIT - A Sixth Circuit U.S. Court of Appeals panel on May 13 reversed a jury's finding that the owners of a non-emergency ambulance company committed identity theft when submitting false claims to Medicare, holding that the government did not present sufficient evidence to support the verdict (United States of America v. Kathy Medlock, et al., No. 14-5084/5100, 6th Cir.; 2015 U.S. App. LEXIS 7867).
NEWARK, N.J. - A federal judge in New Jersey on May 12 partially dismissed an insurance bad faith lawsuit, ruling that although insureds have properly shown that their insurer owed them a fiduciary duty and breached it, other claims are either duplicative or are not permissible due to the parties' involvement in a valid insurance contract (Adolf Senft, et al. v. Fireman's Fund Insurance Co., et al., No. 14-7805, D. N.J.; 2015 U.S. Dist. LEXIS 61870).
TRENTON, N.J. - A New Jersey appeals panel on May 12 affirmed a lower court's rulings in a coverage dispute over underlying legal malpractice claims but remanded to consider the attorney insured's application for counsel fees and costs (Law Offices of Anthony Carbone v. Chicago Insurance Co., et al., No. A-3384-13T2, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1080).
EUGENE, Ore. - An insurance company seeking rescission and declaratory relief from a policy issued to a woman cannot preclude coverage to her resident relative based on alleged misrepresentations she made to the company as to when her son moved back into her home, a federal judge in Oregon ruled May 12 in granting in part the son's motion for summary judgment (IDS Property Casualty Insurance Company v. Michelle Mullins, et al., No. 14-cv-01344-MC, D. Ore.; 2015 U.S. Dist. LEXIS 61927).
NEW HAVEN, Conn. - A reinsurer that entered into an errors and omissions reinsurance treaty with another reinsurer sued that reinsurer in a federal court in Connecticut on May 12, claiming that the reinsurer owes it more than $1 million (Select Insurance Company v. Excalibur Reinsurance Corporation, f/k/a PMA Capital Insurance Company, No. 15-cv-00715, D. Conn.).
NEWARK, N.J. - A New Jersey federal judge on May 12 denied an insurer's motion to dismiss a Superstorm Sandy coverage dispute, finding that the insurer presented no admissible evidence supporting its contention that the insureds' attorney violated discovery and scheduling orders (Peter Blaso & Demeglio Family v. Alterra Excess & Surplus Insurance Co., No. 14-2574 [WHW-CLW], D. N.J.; 2015 U.S. Dist. LEXIS 61869).
NEW YORK - A federal judge in New York on May 12 sentenced a man who pleaded guilty to two counts of health care fraud for his role in a scheme involving the sale of secondhand prescription drugs to 48 months in prison and ordered him to pay $2.9 million in restitution (United States of America v. Bladimir Rigo, No. 13 cr. 897, S.D. N.Y.; 2015 U.S. Dist. LEXIS 62239).
SYRACUSE, N.Y. - A federal judge in New York on May 11 upheld a magistrate judge's earlier ruling and held that when the magistrate judge allowed a reinsurer to amend its answer and add a counterclaim against its reinsured, the decision was not clearly erroneous (Utica Mutual Insurance Company v. Century Indemnity Company, No. 13-cv-00995, N.D. N.Y.).
ST. LOUIS - A contractor's equitable subrogation and unjust enrichment claims for $53 million paid to settle construction defects with regard to a luxury retirement community are unsupported against the project owner's insurers, the Eighth Circuit U.S. Court of Appeals affirmed May 12, finding the contractor already recovered the monies (The Weitz Co. LLC v. Lexington Insurance Co., et al., No. 13-3744, 8th Cir.; 2015 U.S. App. LEXIS 7804).
ST. LOUIS - An Eighth Circuit U.S. Court of Appeals panel on May 7 upheld a verdict and judgment in favor of an insurer in a dispute over claims over a house fire, with the panel also affirming the trial court's discovery and evidentiary rulings (Patricia Jackson v. Allstate Insurance Co., No. 14-1755, 8th Cir.; 2015 U.S. App. LEXIS 7529).
FORT LAUDERDALE, Fla. - A Florida federal judge on May 11 denied an insurer's motion for summary judgment after determining that a policy's endorsement for injuries arising from the aerial application of chemicals provides coverage for underlying claims stemming from the insured's use of an herbicide (National Union Fire Insurance Company of Pittsburgh, Pa. v. Florida Crystals Corp., et al., No. 14-81134, S.D. Fla.; 2015 U.S. Dist. LEXIS 61308).
OKLAHOMA CITY - An Oklahoma federal judge on May 8 granted insureds' motion to remand a tornado damage coverage dispute to state court, finding that a homeowners insurer has failed to demonstrate that an insurance agent was fraudulently joined (Victor Canizales, et al. v. State Farm Fire and Casualty Co., et al., No. 14-1023, W.D. Okla.; 2015 U.S. Dist. LEXIS 60518).
BOSTON - A Massachusetts appeals panel on May 12 affirmed a lower court's ruling that an insurer has no duty to defend its egg producer insured against an underlying suit alleging that it conspired to fix the price of eggs, rejecting the insured's argument that some of the claims are covered by the policy's "personal and advertising injury endorsement" (Rose Acre Farms Inc. v. Liberty Insurance Corp., No. 14-P-915, Mass. App.; 2015 Mass. App. Unpub. LEXIS 409).
MINNEAPOLIS - A payment agreement in an insurance policy requires arbitration between an insurer and its insured regarding reimbursement of $3 million in costs to defend an underlying defective product lawsuit, a Minnesota federal judge ruled May 11, staying the coverage action (The Valspar Corp. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 14-1620, D. Minn.; 2015 U.S. Dist. LEXIS 61229).
RICHMOND, Va. - A federal judge in Virginia erred when granting three pretrial motions to exclude evidence filed by a dermatologist accused of health care fraud, a Fourth Circuit U.S. Court of Appeals panel ruled May 11, holding that the rulings restricted the latitude needed by the government to carry its burden of proof (United States of America v. Amir A. Bajoghli, No. 14-4798, 4th Cir.; 2015 U.S. App. LEXIS 7737).
PHILADELPHIA - A reinsurer told a federal court in Pennsylvania on May 7 that because its reinsueds have allegedly breached an errors and omissions reinsurance treaty, the reinsurer is not obligated to pay the more than $1 million that the reinsureds have billed it for (Excalibur Reinsurance Corporation v. Select Insurance Company, et al., No. 15-cv-02522. E.D. Pa.).
HARRISBURG, Pa. - The Pennsylvania Superior Court on May 6 quashed an insurer's appeal after determining that it does not have jurisdiction to hear the interlocutory appeal because the alternative dispute resolution provision at issue is not an arbitration provision under Pennsylvania's Uniform Arbitration Act (Armstrong World Industries Inc. v. Travelers Indemnity Co. et al., No. 157 MDA 2014, Pa. Super.; 2015 Pa. Super. LEXIS 244).
BALTIMORE - A Maryland federal judge ruled May 7 that a professional liability insurer did not wrongfully deny coverage for a real estate developer's professional negligence claim against an architect insured (McDowell Building LLC v. Zurich American Insurance Co., No. 12-2876, D. Md.; 2015 U.S. Dist. LEXIS 60350).
BOSTON - A First Circuit U.S. Court of Appeals panel on May 7 vacated a federal judge in Massachusetts' ruling sentencing a man who pleaded guilty to insurance fraud to 12 months in prison and ordering him to pay a $60,000 fine and $178,568.41 in restitution, after finding that the judge erred in calculating an insurance company's intended loss and the amount of restitution the defendant should pay (United States of America v. John S. Alphas, No. 14-2228, 1st Cir.; 2015 U.S. App. LEXIS 7581).
FORT LAUDERDALE, Fla. - A Florida federal judge on May 5 granted a bank's motion to dismiss claims in a class action lawsuit alleging that the bank and insurers colluded to manipulate the force-placed insurance market and artificially inflated the amounts that mortgage borrowers were charged for policy premiums (Wilson, et al. v. EverBank, N.A., et al., No. 14-22264, S.D. Fla.).
SCRANTON, Pa. - Dismissal of an insurance bad faith lawsuit is not proper, a Pennsylvania judge ruled May 7, because an insured has properly pleaded his claims for bad faith and breach of the duty of good faith and fair dealing under state law (James T. Lane v. State Farm Mutual Automobile Insurance Co., No. 14-1045, M.D. Pa.; 2015 U.S. Dist. LEXIS 60064).