LexisNexis® Legal Newsroom
    Mealey's Insurance - No Joint Venture Between Insurer, Claims Administrator Exists, Judge Rules

    PHOENIX - Plaintiffs in an insurance bad faith lawsuit have failed to show that any joint venture existed between an insurer and a third-party claims administrator, and, as a result, no bad faith claim exists, a federal judge in Arizona ruled Sept. 22 (Kenneth Ingram, et al. v. Great American Insurance Co., et al., No. 13-2265, D. Ariz.; 2016 U.S. Dist. LEXIS 130632).

    Mealey's Insurance - California Panel Affirms Employment-Related Practices Exclusion Bars Coverage

    SAN DIEGO - A California appeals panel on Sept. 23 affirmed a lower court's ruling that a commercial general liability insurance policy's employment-related practices (ERP) bars coverage for all claims alleged against an insured and its employee (Golden Eagle Insurance Corp. v. Alana Munoz, No. G052223, Calif. App., 4th Dist., Div. 3; 2016 Cal. App. Unpub. LEXIS 6998).

    Mealey's Insurance - 9th Circuit Reverses Order Denying Insurer Reimbursement Of Defense Fees

    ANCHORAGE, Alaska - The Ninth Circuit U.S. Court of Appeals on Sept. 23 reversed and remanded a lower federal court's order that denied a professional liability insurer reimbursement of the defense fees it incurred in an underlying lawsuit against its law firm insured (Attorneys Liability Protection Society Inc. v. Ingaldson Fitzgerald, P.C., f/k/a Ingaldson, Maassen & Fitzgerald, Nos. 13-35115, 13-35172, 9th Cir.; 2016 U.S. App. LEXIS 17396).

    Mealey's Insurance - Oregon High Court Affirms Judgment Against Insurer In Water Damage Dispute

    PORTLAND, Ore. - Coverage was triggered under a commercial general liability insurance policy for a negligence award against a siding contractor for water damage to a housing complex, the Oregon Supreme Court ruled Sept. 22, upholding a garnish judgment against the insurer in the amount of $433,958.16 (FountainCourt Homeowners' Association v. American Family Mutual Insurance Co., No. 61, Ore. Sup.; 2016 Ore. LEXIS 613).

    Mealey's Insurance - Reinsurer Counters Motion To Vacate Arbitration Award

    NEW YORK - A reinsurer told a federal court in New York on Sept. 22 that an arbitration award should be confirmed because a reinsured has not shown that an arbitration umpire was biased (Yosemite Insurance Company v. Nationwide Insurance Company, No. 16-cv-05290, S.D. N.Y.).

    Mealey's Insurance - Remodelers' Lawsuit Against Federal Flood Insurer Cannot Survive, Judge Rules

    NASHVILLE, Tenn. - A Tennessee federal judge on Sept. 20 granted a federal flood insurer's motion to dismiss a breach of contract, unjust enrichment, fraudulent inducement and intentional and negligent misrepresentation lawsuit against it, finding that the claims are preempted by federal law (D&S Remodelers Inc. v. Wright National Flood Insurance Services LLC, et al., No. 15-59, M.D. Tenn., Nashville Div.; 2016 U.S. Dist. LEXIS 128135).

    Mealey's Insurance - Judge: Insureds Conceded They Are Not Entitled To Defense In Insurance Dispute

    TULSA, Okla. - An insurer is entitled to judgment on the pleadings on claims that it failed to properly provide a defense for insureds under the terms of a homeowners insurance policy because the insureds conceded that they were not entitled to a defense for the claims made against them, a federal judge in Oklahoma ruled Sept. 20 (Delilah M. Paul, et al. v. CSAA Fire & Casualty Insurance Co., et al., No. 15-712, N.D. Okla.; 2016 U.S. Dist. LEXIS 127165).

    Mealey's Insurance - Insured Did Not Comply With Terms Of Insurance Policy, Federal Judge Rules

    HOUSTON - An insured is not entitled to coverage under a one-year casualty insurance policy for losses as the result of a burglary because the insured failed to pay the premium by the required deadline, failed to disclose that he has filed similar claims under the terms of a previous policy and failed to properly maintain his business's security system, a federal judge in Texas ruled Sept. 22 (Perfit Vision, et al. v. Mount Vernon Fire Insurance Co., No. 15-408, S.D. Texas; 2016 U.S. Dist. LEXIS 129865).

    Mealey's Insurance - Reinsurer Says Magistrate Judge's Discovery Orders Are Fundamentally Unfair

    SYRACUSE, N.Y. - A reinsurer in a Sept. 19 brief asks a federal court in New York to reconsider its discovery rulings that the reinsurer says require it to produce reserve information while not requiring its reinsured to produce the same category of documentation (Utica Mutual Insurance Company v. Century Indemnity Company, No. 13-cv-00995, N.D. N.Y.).

    Mealey's Insurance - Man Says Reinsurance Dispute Does Not Involve Him

    ATLANTA - A man purportedly associated with a reinsurer sued for allegedly avoiding payment obligations tells a federal court in Georgia in a Sept. 21 brief that claims against him should be dismissed because the court does not hold personal jurisdiction over him (Canal Insurance Company, et al. v. Golden Isles Reinsurance Company, Ltd, et al., No. 15-cv-3331, N.D. Ga.).

    Mealey's Insurance - Coverage For Qui Tam Action Limited To $25,000, Federal Judge Rules

    LAS VEGAS - A Nevada federal judge on Sept. 19 held that coverage for an underlying qui tam action is available under a professional liability insurance policy's billing errors endorsement up to the $25,000 sublimit of liability, rejecting the insureds' argument that they are owed $2 million under another endorsement (My Left Foot Children's Therapy, et al. v. Certain Underwriter's at Lloyd's London subscribing to policy No. HAH15-0632, No. 15-01746, D. Nev.; 2016 U.S. Dist. LEXIS 128062).

    Mealey's Insurance - Judge: Reinsurers Failed To State A Claim For Relief In Breach Of Contract Suit

    WASHINGTON, D.C. - Dismissal of claims in an insurance breach of contract and bad faith lawsuit is proper because reinsurers have failed to state a claim for relief against the Federal Crop Insurance Corp. (FCIC) regarding its modification of the methodology that sets crop premiums, a federal judge in Washington ruled Sept. 20 (ACE American Insurance Co., et al. v. Federal Crop Insurance Corp., et al., No. 14-1992, D. D.C.; 2016 U.S. Dist. LEXIS 128123).

    Mealey's Insurance - Washington Federal Judge: Additional Briefing Needed On Discretionary Clause

    SEATTLE - A Washington federal judge on Sept. 19 ordered parties involved in a disability benefits dispute to submit additional briefing on whether a discretionary clause, included in a disability plan that was issued in the State of Texas, is valid in the State of Washington where the claimant resides (Anthony Flaaen v. McLane Co. Inc., et al., No. 15-5899, W.D. Wash.; 2016 U.S. Dist. LEXIS 127448).

    Mealey's Insurance - DOJ: Skilled Nursing Company, Board Members To Pay $30M Over False Billing

    WASHINGTON, D.C. - The U.S. Department of Justice announced Sept. 19 that North America Health Care Inc. (NAHC), its chairman of the board and a senior vice president have agreed to pay a total of $30 million to resolve allegations that they violated the False Claims Act (FCA) by submitting false claims to government health care programs for medically unnecessary rehabilitation therapy services provided to residents at NAHC's skilled nursing facilities (SNFs).

    Mealey's Insurance - Special Deputy Receiver Reports Quarterly Status Of Liquidation Estate

    AUSTIN, Texas - The special deputy receiver (SDR) of an insolvent insurer reported to a Texas court on Sept. 15 the financial status of the liquidation estate and outlined details of reinsurance recoverables and recoveries (The State of Texas v. San Antonio Indemnity Company, No. D-1-GV-13-001153, Texas, 201st Dist., Travis Co.).

    Mealey's Insurance - Insurance Servicer Says Court Lacks Say Over Reinsurance Arbitration Award Case

    NEW YORK - An insurance services company sued for allegedly not honoring a reinsurance arbitration award told a federal court in New York on Sept. 19 that the court does not hold jurisdiction over the dispute (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 Resentences Doctor For Insurance Fraud Following Appeal

    TYLER, Texas - A federal judge in Texas on Sept. 15 resentenced a doctor to 135 months in prison and ordered him to pay $145,358.23 in restitution to Medicare, Medicaid and Blue Cross Blue Shield of Texas after the Fifth Circuit U.S. Court of Appeals affirmed his conviction (United States of America v. Tariq Mahmood, No. 13-cr-00032, E.D. Texas).

    Mealey's Insurance - Judge: No Valid Lack Of Reasonable Basis Argument Made In Bad Faith Suit

    PHILADELPHIA - A federal judge in Pennsylvania granted an insurer's motion to dismiss claims in an insurance bad faith lawsuit on Sept. 15, ruling that an insured failed to show that the insurer lacked a reasonable basis for denying her claim for underinsured motorists (UIM) benefits (Linda Murphy v. State Farm Mutual Automobile Insurance Co., No. 16-2922, E.D. Pa.; 2016 U.S. Dist. LEXIS 125841).

    Mealey's Insurance - Judge Declines Insurer's Dismissal Motion, Rules That Argument Is Vague

    DALLAS - A federal judge in Texas on Sept. 15 denied an insurer's motions to dismiss and for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that the insurer failed to plead, in detail, each of an insured's claims it seeks to dismiss (David Giboney v. Allstate Vehicle and Property Insurance Co., No. 15-3073, N.D. Texas; 2016 U.S. Dist. LEXIS 125440).

    Mealey's Insurance - Insurer Entitled To Rescind Professional Liability Policies, Federal Judge Rules

    ROCKFORD, Ill. - An Illinois federal judge on Sept. 19 granted a professional liability insurer's request to rescind three policies because of material misrepresentations that a patent and trademark attorney insured made on his application (Minnesota Lawyers Mutual Insurance Co. v. Jerry A. Schulman, et al., No. 14-50142, N.D. Ill., Eastern Div.; 2016 U.S. Dist. LEXIS 127261).

    Mealey's Insurance - No Coverage Due To Underlying Plaintiff For Lead Paint Injuries, Federal Judge Says

    BALTIMORE - An underlying plaintiff is not entitled to coverage under policies issued to the owner of a rental property where she allegedly sustained damages as a result of lead paint because the underlying plaintiff is not an insured or a beneficiary under the policies at issue and because the policies at issue were rescinded pursuant to an agreement between the insurer and insureds, a Maryland federal judge said Sept. 15 (CX Reinsurance Co. Ltd. v. Stewart J. Levitas, et al., No. 15-2174, D. Md.; 2016 U.S. Dist. LEXIS 125390).

    Mealey's Insurance - Policy Clearly Precludes Loss For Roof Damaged By Wet Rot, Michigan Panel Says

    TROY, Mich. - No coverage is owed to an insured seeking coverage for a damaged roof because the cause of the damage was wet rot, which is clearly an excluded cause of loss under the applicable policy, the Michigan Court of Appeals said Sept. 15 (Michigan Battery Equipment Inc. v. EMCASCO Insurance Co., No. 326945, Mich. App.; 2016 Mich. App. LEXIS 1720).

    Mealey's Insurance - 5th Circuit Says Pollution Endorsement Does Not Exclude All Underlying Claims

    NEW ORLEANS - A district court erred in granting summary judgment in favor of an insurer based on its policy's pollution endorsement because it is not clear that the endorsement excludes coverage for all of the underlying claims alleged against an insured, the Fifth Circuit U.S. Court of Appeals said Sept. 16 (Federal Insurance Co. v. Northfield Insurance Co., No. 14-20633, 5th Cir.; 2016 U.S. App. LEXIS 17008).

    Mealey's Insurance - Judge: Misrepresentations On Ownership, Prior Claims Warrant Voiding Policy

    ABERDEEN, Miss. - A federal judge in Mississippi on Sept. 16 awarded summary judgment to Allstate Indemnity Co., ruling that a man's misrepresentations on his policy application regarding the ownership of a property that sustained fire damage and his failure to inform the company of prior insurance claims warrant voiding the policy (Allstate Indemnity Company v. Terry W. Richey III, et al., No. 15CV00073-NBB-DAS, N.D. Miss.; 2016 U.S. Dist. LEXIS 126385).

    Mealey's Insurance - Judge: Rockfall Damage Excluded From Coverage Under Insurance Policy

    SALT LAKE CITY - An insurer did not act in bad faith in denying a claim for coverage under a homeowners insurance policy pursuant to the policy's earth movement exclusion for damage caused by a rockfall, a federal judge in Utah ruled Sept. 15, because the policy was not ambiguous and did not provide coverage for such an event (Western United Insurance Co., d/b/a AAA Insurance Co., v. Janelle Heighton, et al., No. 14-435, D. Utah; 2016 U.S. Dist. LEXIS 125598).