LexisNexis® Legal Newsroom
    Mealey's Insurance - Extracontractual Monetary Damages Are Recoverable Under ERISA, Panel Says, Reverses

    LOS ANGELES - A California appeals panel held Oct. 6 that monetary relief for extracontractual harm is legally recoverable under Section 502(a)(3) of the Employee Retirement Income Security Act, reversing a lower court's ruling that insurers have no duty to defend a managed care company against underlying lawsuits (Health Net, Inc. v. American International Specialty Lines Insurance Co., et al., No. B262716, Calif. App., 2nd Dist., Div. 3; 2016 Cal. App. Unpub. LEXIS 7296).

    Mealey's Insurance - Judge Orders Foo Fighters To Show Cause Why Suit Should Not Be Dismissed

    LOS ANGELES - A California federal judge on Oct. 5 ordered Foo Fighters LLC to show cause in writing why their breach of contract lawsuit seeking full policy benefits for 11 shows that were canceled in the wake of the terrorist attacks should not be dismissed for lack of prosecution (Foo Fighters LLC v. Certain Underwriters at Lloyd's London, et al., No. 16-cv-04208, C.D. Calif.).

    Mealey's Insurance - Insured's Defective Work Is Not An 'Occurrence,' Federal Judge Concludes

    PHILADELPHIA - Under Pennsylvania law, allegations of an insured's faulty workmanship do not constitute an "occurrence," a Pennsylvania federal judge ruled Oct. 5, finding that a comprehensive business liability insurer has no duty to defend or indemnify an underlying negligent construction lawsuit (State Farm Fire and Casualty Co. v. Kim's Asia Construction, No. 15-6619, E.D. Pa.; 2016 U.S. Dist. LEXIS 138915).

    Mealey's Insurance - Judge Denies Insured's Summary Judgment Motion In Insurance Bad Faith Suit

    NEW ORLEANS - Ruling that certain declarations sought in an insured's motion for partial summary judgment in an insurance breach of contract bad faith lawsuit "seemingly rest upon disputed factual determinations and assessments of witness credibility that remain reserved to the trier of fact - a jury," a federal judge in Louisiana on Oct. 4 denied the insured's motion (AMA Discount Inc., et al. v. Seneca Specialty Insurance Co., No. 15-2845, E.D. La.; 2016 U.S. Dist. LEXIS 137349).

    Mealey's Insurance - Federal Judge Dismisses Fraud Suit Against Insurer In Hurricane Charley Dispute

    ORLANDO, Fla. - A Florida federal judge on Oct. 4 granted an insurer's motion to dismiss insureds' fraud claims in a dispute arising from roof damage caused by Hurricane Charley (Ida L. Cruz, et al. v. American Security Insurance Co., No. 16-1317, M.D. Fla.; 2016 U.S. Dist. LEXIS 137548).

    Mealey's Insurance - Judge Confirms $2M Reinsurance Arbitration Awards

    NEW YORK - A federal judge in New York on Oct. 3 confirmed two reinsurance arbitration awards, noting that there was no opposition to the confirmation (Nutmeg Insurance Company, et al. v. Employers Insurance of Wausau A Mutual Company, No. 16-cv-00317, S.D. N.Y.).

    Mealey's Insurance - Plan Administrator Not Granted Discretionary Authority, Federal Judge Says

    SAN FRANCISCO - A de novo standard of review should be applied in a disability benefits suit because the plan at issue did not confer discretionary authority to the disability plan administrator, a California federal judge said Oct. 3 (Cathleen Murphy v. California Physicians Service, et al., No. 14-2581, N.D. Calif.; 2016 U.S. Dist. LEXIS 137159).

    Mealey's Insurance - Insureds Offer Sufficient Facts To Support Their Bad Faith Claim, Judge Rules

    TULSA, Okla. - Insureds have offered sufficient facts to support their claim for bad faith against their insurer in a homeowners insurance dispute, a federal judge in Oklahoma ruled Oct. 4 in denying the insurer's motion to dismiss (Larry W. Thomas, et al. v. Farmers Insurance Co., No. 16-17, N.D. Okla.; 2016 U.S. Dist. LEXIS 137564).

    Mealey's Insurance - Federal Judge Denies Insured's Motion To Remand In Bad Faith Suit

    DALLAS - Remand of an insurance breach of contract and bad faith lawsuit is not proper because an insured has failed to show that an adjuster is liable for any of the claims against him, a federal judge in Texas ruled Oct. 4 (Ministerio Internacional Lirios del Valle v. State Farm Lloyds, et al., No. 16-1212, N.D. Texas; 2016 U.S. Dist. LEXIS 137453).

    Mealey's Insurance - Claims Against Insurer In Water Damage Suit Cannot Stand, Federal Judge Says

    BOISE, Idaho - An insurer did not breach its contract or act in bad faith in its handling of an insured's claim for water damages, an Idaho federal judge said Sept. 30 after determining that the insured failed to provide any support that the insurer breached its contract (Kim Peck v. The Cincinnati Insurance Co., No. 14-500, D. Idaho; 2016 U.S. Dist. LEXIS 136465).

    Mealey's Insurance - Judge Rules On Summary Judgment Motions In Suit Over Loan Closing Programs

    MILWAUKEE - A Wisconsin federal judge on Sept. 30 held that there is a question of fact as to whether an insured could have reasonably foreseen that claims of wrongful acts brought against it by mortgage lenders would result in claims by a title insurer in a dispute arising from the insured's mortgage loan closing services (Fiserv Solutions Inc. v. Endurance American Specialty Insurance Co., et al., No. 11-0603, E.D. Wis.; 2016 U.S. Dist. LEXIS 136938).

    Mealey's Insurance - Federal Judge: Fact Issues As To Material Breach Preclude Summary Judgment Ruling

    PITTSBURGH - A Pennsylvania federal judge on Sept. 29 granted in part and denied in part dueling motions for summary judgment filed by a glass manufacturer insured, an insurer and a reinsurer in a coverage dispute over property damage and business interruption losses arising from the insured's equipment breakdown (The Hartford Steam Boiler Inspection and Insurance Co., et al. v. International Glass Products LLC, et al., No. 08-1564, W.D. Pa.; 2016 U.S. Dist. LEXIS 135045).

    Mealey's Insurance - Doctor's Wife Can Have New Trial On Knowledge Of Scheme, Judge Rules

    LONDON, Ky. - A federal judge in Kentucky on Sept. 30 ruled that the wife of a doctor who was found guilty of owning and operating a taxpayer-funded pill mill should have a new trial on charges that she knowingly billed insurance companies for drugs that were dispensed using a pre-signed prescription sheet (United States of America v. James Alvin Chaney, et al., No. 14-37, E.D. Ky.; 2016 U.S. Dist. LEXIS 135190).

    Mealey's Insurance - Insured Failed To Prove Existence Of Policies, New York Federal Judge Says

    ALBANY, N.Y. - A New York federal judge on Sept. 29 granted summary judgment motions filed by three insurers in an asbestos coverage dispute after determining that the insured failed to prove the terms of lost policies and failed to provide sufficient evidence regarding the dates of first exposure for the underlying claims (Pacific Employers Insurance Co. v. Troy Belting & Supply Co., et al., No. 11-912, N.D. N.Y.; 2016 U.S. Dist. LEXIS 134224).

    Mealey's Insurance - Judge Says Motion To Disqualify Counsel Was A Waste Of Time

    NEW YORK - A federal judge in New York on Oct. 3 denied two alleged judgment creditors' motion to disqualify opposing counsel in a case where the alleged judgment creditors are asking the court to order payment of the confirmation of a reinsurance arbitration award (AmTrust North America, Inc. and Technology Insurance Company, Inc., as judgment creditors of Pacific Re, Inc. on behalf of its protected cell Pac Re 5-AT v. Safebuilt Insurance Services Inc., No. 16-cv-06033, S.D. N.Y.).

    Mealey's Insurance - Judge: Potential Conflicts In Insurance Coverage Do Not Require Independent Counsel

    SAN DIEGO - Potential conflicts of interests between an insurer and an additional insured do not require the appointment of independent counsel in an underlying construction defects lawsuit, a California federal judge ruled Sept. 29, also granting summary judgment on breach of contract and bad faith claims (St. Paul Mercury Insurance Co. v. McMillin Homes Construction Inc., et al., No. 15-1548, S.D. Calif.; 2016 U.S. Dist. LEXIS 134972).

    Mealey's Insurance - Judge Dismisses Bad Faith Suit, Allows Insured To Replead ERISA Claims

    FRESNO, Calif. - Dismissal of claims in an insurance breach of contract and bad faith lawsuit are proper because the claims are preempted by the Employee Retirement Income Security Act (ERISA), a federal judge in California ruled Sept. 30 (April Powell v. Unum Life Insurance Company of America, et al., No. 16-1197, E.D. Calif.; 2016 U.S. Dist. LEXIS 136311).

    Mealey's Insurance - Texas Federal Judge Says Question Of Fact Remains On Insured's Refusal To Settle

    HOUSTON - Even though an insurer has shown that it was prejudiced as a matter of law by an insured's conduct in declining a settlement in an underlying lawsuit over a faulty flex connector, a question of fact exists as to whether the insured's refusal to settle was reasonable, a Texas federal judge said Sept. 29 in vacating a prior ruling on the issue (Mid-Continent Casualty Co. v. Petroleum Solutions, Inc., et al., No. 09-0422, S.D. Texas; 2016 U.S. Dist. LEXIS 133972).

    Mealey's Insurance - Florida Majority Quashes Ruling, Says Court Misapplied, Misinterpreted Statutes

    TALLAHASSEE, Fla. - A majority of the Florida Supreme Court held Sept. 29 that an appellate court misapplied a statutory presumption of correctness and incorrectly found that another statute requires a showing of bad faith for an insured to recover attorney fees, quashing and remanding the appellate court's ruling in a sinkhole coverage dispute (Kathy Johnson v. Omega Insurance Co., No. SC14-2124, Fla. Sup.; 2016 Fla. LEXIS 2148).

    Mealey's Insurance - Suit Seeking Coverage Under Crime Bond Was Untimely, Illinois Panel Affirms

    CHICAGO - An Illinois appeals panel on Sept. 30 affirmed a lower court's ruling that an insured's lawsuit seeking indemnification under a financial institution crime bond is time-barred, rejecting the insured's attempt to apply Section 143.1 of Illinois Insurance Code to toll the bond's 24-month filing requirement (Independent Trust Corp. v. Kansas Bankers Surety Company, No. 1-14-3161, Ill. App., 1st Dist., 5th Div.; 2016 Ill. App. LEXIS 670).

    Mealey's Insurance - Texas High Court Denies Petition For Review In Mold Coverage Dispute

    AUSTIN, Texas - The Texas Supreme Court on Sept. 30 refused to review a mold coverage suit in which a trial court granted an insurer's no-evidence motion for summary judgment because the insureds failed to file a timely and substantive response to the motion (Veronica L. Davis, et al. v. State Farm Lloyds Texas, No. 16-0531, Texas Sup.).

    Mealey's Insurance - Judge: Insured Failed To Provide Insurer Sufficient Notice Of Bad Faith Claim

    ALBANY, Ga. - A Georgia federal judge on Sept. 30 found that an insured did not satisfy a statutory prerequisite demand requirement by failing to provide sufficient notice of a bad faith claim or litigation to its insurer before filing its initial complaint, granting the insurer's motion for summary judgment as to the bad faith claim (Foliar Nutrients Inc., et al. v. Nationwide Agribusiness Insurance Co., No. 14-75, M.D. Ga.; 2016 U.S. Dist. LEXIS 135327).

    Mealey's Insurance - Judge Says ACA Insurer Is Insolvent, Orders Liquidation

    CHICAGO - An Illinois judge on Sept. 29 ordered the liquidation of an insolvent Patient Protection and Affordable Care Act (ACA) marketplace insurer and terminated a previously ordered rehabilitation (People of the State of Illinois, ex rel. Anne Melissa Dowling, Acting Director of Insurance of the State of Illinois v. Land of Lincoln Mutual Health Insurance Company, No. 2016CH09210, Ill. Cir., Cook Co., Chanc. Div.).

    Mealey's Insurance - 11th Circuit: Insured's Alleged Defective Roof Work Does Not Constitute 'Property Damage'

    ATLANTA - A commercial general liability insurer had no duty to defend or indemnify a contractor in an underlying lawsuit seeking to recover the costs of repairing and replacing roofing work installed incorrectly by an insured subcontractor because the costs did not constitute "property damage" under the policy, the 11th Circuit U.S. Court of Appeals affirmed Sept. 28 (Core Construction Services Southeast Inc., et al. v. Crum & Forster Specialty Insurance Co., No. 16-10030, 11th Cir.; 2016 U.S. App. LEXIS 17575).

    Mealey's Insurance - Judge Orders Contractor To Pay Insurer In Liquidation Under Indemnity Agreement

    HOUSTON - A federal judge in Texas on Sept. 28 found that a contractor and others that had agreed to indemnify an insurer in liquidation were liable to indemnify the insurer for more than $500,000 of losses the insurer paid when the contractor could not to meet its obligations on a brine storage pond project (Castlepoint National Insurance Company v. Addicks Services, Inc., et al., No. 15-cv-00462, S.D. Texas; 2016 U.S. Dist. LEXIS 134761).