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    Mealey's Insurance - Insured Not Entitled To Consequential Damages In Bad Faith Suit, Judge Rules

    LAS VEGAS - A federal judge in Nevada on July 14 granted an insurer's motion to amend judgment in an insurance bad faith and breach of contract suit, ruling that an insured failed to show that he was entitled to consequential damages (Andrew Cordova v. American Family Mutual Insurance Co., No. 13-1111, D. Nev.; 2015 U.S. Dist. LEXIS 143728).

    Mealey's Insurance - California Federal Judge Partially Grants Insurers' Motion To Reconsider

    SAN FRANCISCO - A California federal judge on July 15 partially granted a motion for reconsideration on the issue of whether a deductible applies to defense costs in an environmental contamination dispute and said the insurers are free to file a motion to amend their complaint after the underlying suit is adjudicated to allege a claim pertaining to the care, custody or control exclusion in the business auto policies at issue (American Guarantee and Liability Insurance Co., et al. v. Technichem Inc., et al., No. 15-03611, N.D. Calif.).

    Mealey's Insurance - Coverage Afforded Under Insured's Umbrella Policy, Oklahoma Federal Judge Says

    OKLAHOMA CITY - Even though a primary pollution liability policy is not listed as underlying insurance to an umbrella policy, coverage for an underlying environmental contamination suit is still afforded under the umbrella policy, an Oklahoma federal judge said July 15 (BITCO General Insurance Corp. v. Marjo Operating Co. Inc., et al., No. 14-1220, W.D. Okla.; 2016 U.S. Dist. LEXIS 92083).

    Mealey's Insurance - Judge: Insurer's Declaratory Judgment Action In Lead Paint Case May Proceed

    BALTIMORE - A federal judge in Maryland on July 15 refused to dismiss an insurer's lawsuit against a landlord and the couple that sued the landlord in an underlying lawsuit regarding lead-based paint exposure, ruling that the insurer's declaratory judgment action must continue because the couple had not met the burden of having the case dismissed (Allstate Insurance Co. v. Stanley Rochkind, et al., No. 15-1546, D. Md.; 2016 U.S. Dist. LEXIS 91087).

    Mealey's Insurance - Special Deputy Receiver Wants Hearing On Disputed Claim

    AUSTIN, Texas - The special deputy receiver (SDR) of an insolvent insurer asked a Texas court on July 13 to hold a hearing on a contested claim regarding compensation for certain losses of an insured due to a house fire (The State of Texas and the Texas Department of Insurance v. Vesta Fire Insurance Corporation, et al., No. D-1-GN-002366, Texas Dist., Travis Co.).

    Mealey's Insurance - Florida Panel Affirms Court's Denial Of Insured's Motion For Attorney Fees

    LAKELAND, Fla. - A Florida appeals panel on July 15 held that although a lower court denial of insured's motion for attorney fees in a sinkhole coverage dispute was based on two statutory misinterpretations, there is ample basis in the record to affirm (Christopher Shane Miller v. Florida Insurance Guaranty Association Inc., et al., No. 2D15-1350, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 10868).

    Mealey's Insurance - Insured Filed Superstorm Sandy Claim 11 Days Too Late, Federal Judge Rules

    CAMDEN, N.J. - A New Jersey federal judge on July 14 held that the one-year statute of limitations under the National Flood Insurance Act (NFIA) was triggered on the date an insurer mailed its denial letter and not on the date the insured received the denial letter, finding that the insured filed his claim for Superstorm Sandy damage to his beach house 11 day too late (John Cholankeril Jr. v. Selective Insurance Company of America, No. 15-3269, D. N.J.; 2016 U.S. Dist. LEXIS 91457).

    Mealey's Insurance - Judge: Additional Insured Dismissed Delay Claim Against 3 Insurers

    NEW ORLEANS - Because an additional insured amended its complaint, there is no longer a "Delay Claim" under three insurance policies, a Louisiana federal judge ruled July 13, denying the insurers' motion for judgment on the pleadings (Landis Construction, LLC v. Torus Specialty Insurance Co., et al., No. 16-1619, E.D. La.; 2016 U.S. Dist. LEXIS 91024).

    Mealey's Insurance - Insurer Paid Full Amount Of Mold Sublimit, Federal Judge Says; No Breach Of Contract

    CAMDEN, N.J. - A New Jersey federal judge on July 12 determined that an insurer did not breach its contract or act in bad faith when handling its insureds' claims for water and mold damages because the insurer paid for some of the damages and paid the full amount of the mold sublimit under the policy (Warren and Maryann Andrews v. Merchants Mutual Insurance Co., No. 14-5147, D. N.J.; 2016 U.S. Dist. LEXIS 89997).

    Mealey's Insurance - Judge Places ACA Health Care Marketplace Co-Op Into Rehabilitation

    CHICAGO - An Illinois judge on July 14 placed a Patient Protection and Affordable Care Act (ACA) health care marketplace co-op into rehabilitation because, according to the state's acting director of insurance, the insurer will suffer a $68 million loss due to the actions of Congress and the Centers for Medicare & Medicaid Services, which would place the insurer in a hazardous position (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 - Judge: No Reasonable Diligence Was Exercised In Discovering Insurer's Identity

    BIRMINGHAM, Ala. - An Alabama federal judge on July 12 held that a plaintiff did not exercise reasonable diligence in attempting to discover the identity of a defendant's errors and omissions insurer and, as a result, the notice of a claim was untimely and coverage was not triggered (Henry Nelson v. Northland Insurance Co., No.14-00112, N.D. Ala., Southern Div.; 2016 U.S. Dist. LEXIS 89996).

    Mealey's Insurance - 11th Circuit Panel Says Long-Term Benefits Were Not Wrongfully Terminated

    ATLANTA - A district court did not err in determining that a disability plan did not wrongfully terminate a claimant's long-term disability benefits, the 11th Circuit U.S. Court of Appeals said July 11 (Elizabeth Jenkins v. Grant Thornton LLP, et al., No. 14-15695, 11th Cir.; 2016 U.S. App. LEXIS 12729).

    Mealey's Insurance - Ohio Federal Judge Says Insured's Knowledge Of Pollution Is Unclear

    COLUMBUS, Ohio - Because it is not clear if an insured knew about a pollution condition prior to a policy's inception period and failed to report that condition to the insurer when the policy incepted, an Ohio federal judge on July 12 denied the insurer's motion for judgment on the pleadings (Tunnell Hill Reclamation LLC v. Endurance American Specialty Insurance Co., No. 15-2720, S.D. Ohio; 2016 U.S. Dist. LEXIS 90207).

    Mealey's Insurance - Judge: Facebook IPO Class Action Claims Fall Under Professional Services Exclusion

    NEW YORK - A New York federal judge on July 12 held that a directors and officers liability insurance policy's professional services exclusion unambiguously bars coverage for claims in an underlying Facebook IPO class action lawsuit but refused to grant summary judgment to the primary D&O insurer on a breach of contract claim involving the advancement of underlying defense costs (Beazley Insurance Co. Inc. v. ACE American Insurance Co., et al., No. 15-5119, S.D. N.Y.; 2016 U.S. Dist. LEXIS 90332).

    Mealey's Insurance - Reinsurer Says It Wants Access To Sealed Documents In Asbestos-Related Case

    SYRACUSE, N.Y. - A nonparty reinsurer involved in a similar asbestos-related case as the instant action told a federal court in New York on July 10 that the method of an insurer's attempts to restrict the reinsurer's access to certain sealed documents is contrary to controlling case law (Utica Mutual Insurance Company v. Munich Reinsurance America, Inc., No. 12-cv-00196, N.D. N.Y.).

    Mealey's Insurance - Couple, Companies Ordered To Pay $7.7M For Submitting False Claims

    NEWARK, N.J. - A federal judge in New Jersey on July 8 granted the federal government's motion for summary judgment in a False Claims Act (FCA) lawsuit and ordered a New Jersey couple and their companies to pay $7.7 million after finding them to be liable for knowingly submitting false claims to Medicare (United States of America, ex rel. Jane Doe v. Heart Solutions, et al., No. 14-cv-3644, D. N.J.; 2016 U.S. Dist. LEXIS 88614).

    Mealey's Insurance - Judge: Asbestos-Related Reinsurance Case Shall Stay In Illinois Federal Court

    CHICAGO - A federal judge in Illinois on July 11 denied an insurer's motion to transfer an asbestos-related late notice reinsurance dispute to a federal court in California (R&Q Reinsurance Company v. The American Insurance Company, No. 16-cv-04199, N.D. Ill.).

    Mealey's Insurance - Insurer Has Duty To Defend Paramedic Services Company, 7th Circuit Affirms

    CHICAGO - The Seventh Circuit U.S. Court of Appeals on July 12 affirmed a lower federal court's finding that an insurer has a duty to defend a paramedic services company against underlying claims for sexual harassment, assault and battery and retaliation for whistle-blowing, rejecting the insurer's argument that the company does not qualify as a "named insured" under the policy (American Alternative Insurance Corp. v. Metro Paramedic Services, Inc., 7th Cir., No. 15-2310; 2016 U.S. App. LEXIS 12794).

    Mealey's Insurance - 2nd Circuit Affirms Woman's Conviction For Role In Insurance Fraud Scheme

    NEW YORK - A Second Circuit U.S. Court of Appeals panel on July 12 affirmed a woman's convictions for conspiracy to commit health care fraud, health care fraud and mail fraud, holding that the evidence presented at trial sufficiently showed that she was an owner of medical practices that routinely submitted false claims for reimbursement under New York's No-Fault Comprehensive Motor Vehicle Insurance Reparation Act (United States of America v. Tatyana Gabinskaya, et al., No. 15-776-cr, 2nd Cir.; 2016 U.S. App. LEXIS 12776).

    Mealey's Insurance - 5th Circuit: District Court Did Not Err When Denying Review Request

    NEW ORLEANS - The federal judge in Louisiana overseeing litigation stemming from the oil spill in the Gulf of Mexico following the explosion of the Deepwater Horizon oil rig in April 2010 did not err when refusing to consider a car dealership's request to review whether the claims administrator presiding over the Court Supervised Settlement Program (CSSP) abused his discretion when finding that it was not a start-up business, a Fifth Circuit U.S. Court of Appeals panel ruled July 11 (Holmes Motors Inc. v. BP Exploration & Production Inc., et al., No. 15-30860, 5th Cir.).

    Mealey's Insurance - Judge: Further Evidence Is Needed In Coverage Suit Arising From Molestation Claims

    SAN FRANCISCO - A California federal judge on July 8 denied an insurer's motion for judgment on the pleadings in its lawsuit seeking equitable contribution from another insurer for $15.8 million in underlying settlements over students' claims that a school district and its administrators were negligent in their supervision of a teacher accused of sexual molestation (Westport Insurance Corp. v. California Casualty Management Co., No. 16-01246, N.D. Calif.; 2016 U.S. Dist. LEXIS 88924).

    Mealey's Insurance - Insured Opposes Motion To Reconsider, Says Motion Was Filed In Bad Faith

    SAN FRANCISCO - Reconsideration of a California federal judge's finding that a policy deductible does not apply to defense costs incurred as a result of an environmental contamination dispute is not warranted, an insured argues in its July 7 response to the insurers' motion for reconsideration (American Guarantee and Liability Insurance Co., et al. v. Technichem Inc., et al., No. 15-03611, N.D. Calif.).

    Mealey's Insurance - Insured Petitions For Rehearing; Says Panel Erred In Ruling No Defense Owed

    NEW YORK - An insured filed a motion for rehearing on July 7 in the Second Circuit U.S. Court of Appeals, arguing that the panel failed to consider applicable Massachusetts law when it ruled that an insurer does not have a duty to defend the against an underlying environmental contamination suit (The Narragansett Electric Co. v. Century Indemnity Co., et al., Nos. 15-1137, 15-1397, 2nd Cir.).

    Mealey's Insurance - Question Of Fact Exists As To Whether Home Was Unoccupied, Judge Says

    PHILADELPHIA - Although insureds did not exercise reasonable care in maintaining heat to prevent pipes from freezing in their home while they were away, a question of fact exists as to whether the insureds' home was unoccupied when the loss occurred, a Pennsylvania federal judge said July 7 (Joseph Jugan, et al. v. Economy Premier Assurance Co., No. 15-4272, E.D. Pa.; 2016 U.S. Dist. LEXIS 87876).

    Mealey's Insurance - Judge: Insurer Unable To Show Lawyers Engaged In Conspiracy To Submit Claims

    PHILADELPHIA - A federal judge in Pennsylvania on July 11 awarded summary judgment to two lawyers accused of civil conspiracy, finding that Church Mutual Insurance Co. failed to present sufficient evidence that the attorneys agreed with other defendants to pursue fraudulent claims and that they acted with malice (Church Mutual Insurance Company v. Alliance Adjustment Group, et al., No. 15-461, E.D. Pa.; 2016 U.S. Dist. LEXIS 89194).