NEW ORLEANS - A district court did not err in finding that a disability insurer abused its discretion in offsetting a claimant's long-term disability benefits because the plan is ambiguous as to whether a direct rollover of pension funds to an individual retirement account entitles the insurer to offset the claimant's disability benefits, the Fifth Circuit U.S. Court of Appeals said July 18 (Joel Thomason v. Metropolitan Life Insurance Co., et al., No. 16- 10634, 5th Cir., 2017 U.S. App. LEXIS 12932).
DES MOINES, Iowa - A majority of the Iowa Court of Appeals on July 19 found that a lower court erred in finding that a $1.4 million appraisal award in a hailstorm coverage dispute was not binding on an insurer and its insured, reversing and remanding the lower court in part (Walnut Creek Townhome Association v. Depositors Insurance Co., No. 16-0121, Iowa App., 2017 Iowa App. LEXIS 722).
NEW YORK - A widow may add claims for declaratory judgment and tortious interference with contract to her case claiming that insurers and an administrator are intentionally delaying or denying payment on a more than $7 million asbestos verdict, a New York justice held in an opinion posted July 18 (Ruby Konstantin, et al. v. Aetna Casualty & Surety Co., et al., No. 652897/2013, N.Y. Sup., New York Co., 2017 N.Y. Misc. LEXIS 2697).
CINCINNATI - Three companies and their executives have agreed to pay $19.5 million for allegedly violating the False Claims Act (FCA) by billing Medicare for medically unnecessary rehabilitation therapy and hospice services, the U.S. Department of Justice announced July 18 (United States, ex rel. Trakhter v. Provider Services Inc., et al., No. 11-CV-217, United States, ex rel. Goodwin, et al. v. Brian Colleran, et al.., No. 11-CV-935, S.D. Ohio.).
BRIDGEPORT, Conn. - Refusing to reconsider the confirmation of a clarified arbitration award that requires a reinsurer to pay up to an additional $18 million in reinsurance proceeds to an insurer, a Connecticut federal judge on July 18 held that he lacked the authority to issue a judgment for a sum certain (General Re Life Corp. v. Lincoln National Life Insurance Co., No. 15-cv-01860, D. Conn.).
NEW ORLEANS - A Louisiana federal judge on July 19 refused to allow two insureds leave to amend their complaint to add Louisiana Insurance Guaranty Association (LIGA) as a defendant in substitute for an insolvent insurer in their personal injury lawsuit (Sherry Landry, et al. v. Circle K Stores Inc., et al., No. 16-15705, E.D. La., 2017 U.S. Dist. LEXIS 111906).
NEW YORK - The Second Circuit U.S. Court of Appeals on July 18 vacated and remanded a judgment entered against an insurer in an environmental contamination coverage dispute after determining that the damages must be allocated in accordance with the all sums, vertical exhaustion method outlined in a 2016 decision by the New York Court of Appeals (Olin Corp. v. OneBeacon America Insurance Co., et al., No. 15-2047, 2nd Cir., 2017 U.S. App. LEXIS 12939).
NEW YORK - A foreign specialty reinsurer must post a new $15 million bond as part of its attempt to arbitrate a coverage dispute in Bermuda, a New York federal bankruptcy judge ruled July 17, granting a defunct brokerage company's motion to strike the current bond as defective (In re: MF Global Holdings Ltd., et al., MF Global Holdings Ltd. as plan administrator, and MF Global Assigned Assets LLC v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy.).
HOUSTON - Dismissal of an insured's insurance breach of contract claim against his insurer is proper because the insurer made a full and timely payment of benefits following the issuance of an appraisal award in a homeowners insurance dispute, a federal judge in Texas ruled July 14 in granting the insurer's motion for summary judgment and denying a summary judgment motion filed by the insured (Lee Losciale v. State Farm Lloyds, No. 17-0016, S.D. Texas, 2017 U.S. Dist. LEXIS 109389).
TAMPA, Fla. - A Florida federal judge on July 17 declined to strike testimony from an insurer's biomechanical expert on the forces required to cause a woman's alleged injuries in a rear-end car accident, finding that the expert meets the admissibility standards established by 11th Circuit U.S. Court of Appeals precedent (Lisa N. Bostick v. State Farm Mutual Automobile Insurance Company, No. 8:16-cv-1400, M.D. Fla., 2017 U.S. Dist. LEXIS 110370).
NEW YORK - A Brazilian reinsurer told a New York federal court on July 14 that it will not oppose a steel maker's request to intervene in an insurer's lawsuit seeking to require the reinsurer to cover a $5 million settlement with the insured under an arbitration award (National Indemnity Co. v. IRB Brasil Resseguros S.A., No. 15-3975, S.D. N.Y.).
NEWARK, N.J. - A New Jersey federal magistrate judge on July 14 granted an insured's motion to consolidate a subrogation lawsuit filed by a property owner against an insured and an insurance coverage lawsuit filed against the insured after determining that the suits involve common questions of law regarding subrogation of costs and coverage for a property contaminated with mercury (BRG Harrison Lofts Urban Renewal LLC v. General Electric Company, et al., and Evanston Insurance Co. v. Accredited Environmental Technologies Inc., et al., Nos. 16-6577, 17-1584, D. N.J., 2017 U.S. Dist. LEXIS 109447).
SACRAMENTO, Calif. - The California Insurance Guarantee Association (CIGA) breached its statutory duty to reimburse a joint powers authority for excess workers' compensation coverage owed under an insolvent insurer's policy, a California appeals panel affirmed July 17 (CSAC Excess Insurance Authority v. California Insurance Guarantee Association, No. C081775, Calif. App., 3rd Dist., 2017 Cal. App. Unpub. LEXIS 4854).
NEW ORLEANS - The owners of two psychological services companies were sentenced by a federal judge in Louisiana for their roles in a $25.2 million Medicare fraud scheme, the U.S. Department of Justice announced July 14 (United States of America v. Rodney Hesson, et al., No. 15-cr-152, E.D. La.).
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on July 12 dismissed the Property & Casualty Insurance Guaranty Corp. (PCIGC) from an insured insulation company's appeal of a partial summary judgment order entered in favor of a number of solvent and insolvent insurers involved in an asbestos coverage case (General Insurance Company of America and The Walter E. Campbell Co. Inc. v. United States Fire Insurance Co., et al., No. 17-1585, 4th Cir.).
MINNEAPOLIS - A Minnesota federal judge July 14 granted a motion for judgment on the pleadings filed by an insurer after determining that a policy's pollution exclusion bars coverage for contaminated fat products supplied to a pork producer because the pollution exclusion applies to the contaminant that was dispersed within the supplied fat products fed to the pork producer's swine (Restaurant Recycling LLC, v. New Fashion Pork LLP, intervenor plaintiff, v. Employer Mutual Casualty Company, d/b/a EMC Insurance Companies and Hamilton Mutual Insurance Company, No. 17-7, D. Minn., 2017 U.S. Dist. LEXIS 109755).
DENVER - A federal judge in Utah did not err when awarding summary judgment to two insurance companies that were sued by a couple seeking to recover $2.2 million in judgments they are owed by two contractors over faulty framing, a 10th Circuit U.S. Court of Appeals panel ruled July 13, holding that the insurers are not required to provide coverage under policies issued to the contractors (Auto-Owners Insurance Company v. George Fleming, et al, No. 16-4118, 10th Cir., 2017 U.S. App. LEXIS 12533).
TULSA, Okla. - An Oklahoma federal judge on July 13 denied insureds' motion to dismiss a commercial general liability insurer's declaratory judgment lawsuit challenging coverage for an underlying fatal accident that occurred at a haunted house operated by the insureds, finding that it is appropriate to exercise jurisdiction (Mesa Underwriters Specialty Insurance Co. v. Victor R. Marquez, et al., No. 16-213, N.D. Okla., 2017 U.S. Dist. LEXIS 108638).
SAN FRANCISCO - The First District California Court of Appeal on July 11 affirmed a trial court's judgment in favor of an excess insurer after finding that its policy's professional services exclusion bars coverage for underlying claims arising from a deadly pipeline explosion (Energy Insurance Mutual Limited v. Ace American Insurance Co., No. A140656, Calif. App., 1st Dist., Div. 4).
CHICAGO - A condominium association's claim that a painting subcontractor acted negligently is sufficient under Illinois law to constitute an "occurrence" under a commercial general liability policy, the Seventh Circuit U.S. Court of Appeals affirmed July 13 (Westfield Insurance Co. v. National Decorating Service, Inc., et al., No. 16-1439, 7th Cir., 2017 U.S. App. LEXIS 12516).
BOSTON - An arbitrator did not disregard the law when deciding that arbitration is banned for a breach of contract dispute under a reinsurance participation agreement regardless of the parties' intent to arbitrate, the First Circuit U.S. Court of Appeals held July 13, affirming the denial of a motion to vacate the arbitrator's decision (Mountain Valley Property Inc. v. Applied Risk Services Inc., et al., No. 16-2189, 1st Cir., 2017 U.S. App. LEXIS 12575).
NEW YORK - A defunct brokerage company argues in its July 11 reply brief with a New York federal bankruptcy court that a foreign specialty reinsurer's $15 million bond as part of the reinsurer's effort to arbitrate a coverage dispute in Bermuda should be struck because the bond is defective (In re: MF Global Holdings Ltd., et al., MF Global Holdings Ltd. as plan administrator, and MF Global Assigned Assets LLC v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy.).
MISSOULA, Mont. - A Montana federal judge on July 10 held that an excess insurer has a right to rescind its insurance policy in a coverage dispute over a claim that the insureds' island property was maintained in a dangerous condition that resulted in a catastrophic fall off the edge of an infinity swimming pool (Mount Vernon Fire Insurance Co. v. Jack L. Gabelhausen, Jr., et al., No. 16-91, D. Mont., 2017 U.S. Dist. LEXIS 106125).
DETROIT - The Michigan Court of Appeals on July 11 determined that a municipal liability insurer has no duty to defend a police officer against an underlying federal civil rights lawsuit arising from the disappearance and death of the police officer's cousin, reversing a lower court (Timothy Matouk v Michigan Municipal League Liability & Property Pool, No. 332482, Mich. App., 2017 Mich. App. LEXIS 1106).
LINCOLN, Neb. - An insurer failed to comply with an order requiring complete answers to interrogatories in a dispute concerning sums allegedly owed under a promissory note executed in connection with a reinsurance participation agreement, a reinsurer argues to a Nebraska federal court in a July 12 brief (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15CV90, D. Neb.).