LexisNexis® Legal Newsroom
    Mealey's Insurance - Appellate Panel Says New York Is Correct Place For Reinsurance Arbitration

    NEW YORK - The Second Circuit U.S. Court of Appeals on Nov. 16 affirmed a lower court ruling that a reinsurance dispute should be arbitrated in New York and not London (Infrassure, Ltd. v. First Mutual Transportation Assurance Company, Inc., No. 16-306, 2nd Cir.; 2016 U.S. App. LEXIS 20529).

    Mealey's Insurance - Judge Rules In Insured's Favor On 2 Open Issues In Suit Arising From Fraud Scheme

    NEW YORK - Ruling on two remaining issues in a dispute over coverage for an insured's multimillion-dollar loss of marine gas oil (MGO), a New York federal judge on Nov. 11 held that the insured is entitled to damages measured by a "re-sale" invoice's value of $17,910,833.28 and to prejudgment interest at the New York statutory rate of 9 percent, starting from March 2, 2014 (AGCS Marine Insurance Co. v. World Fuel Services, Inc., et al., No. 14-5902, S.D. N.Y.; 2016 U.S. Dist. LEXIS 158022).

    Mealey's Insurance - Federal Judge: Insurer Has To Cover Losses Arising From $492,350 Embezzlement

    NEW BERN, N.C. - A North Carolina federal judge held Nov. 14 that an insurer has a duty to pay its automotive retailer insured for the damages it sustained from the unlawful taking of $492,350.53, granting the insured's motion for summary judgment in a crime coverage declaratory judgment dispute (Colony Tire Corp. v. Federal Insurance Co., No. 15-27, E.D. N.C.; 2016 U.S. Dist. LEXIS 156893).

    Mealey's Insurance - Maryland Federal Judge Defers Ruling On Claimant's Motion For Attorney Fees, Costs

    BALTIMORE - A Maryland federal judge on Nov. 15 entered an order deferring a ruling on a disability claimant's motion for attorney fees and costs until an appeal filed by the plan defendants in the Fourth Circuit U.S. Court of Appeals regarding the claimant's disability onset date is decided (Jesse Solomon v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al., No. 14-3570, D. Md.; 2016 U.S. Dist. LEXIS 157606).

    Mealey's Insurance - Judge Will Not Order Lift Of Stay Enjoining Litigation Against Insolvent Insurer

    AUSTIN, Texas - A Texas judge on Nov. 10 denied a creditor's motion to lift an automatic stay of litigation involving an insolvent insurer in liquidation (The State of Texas v. Millennium Closing Services LLC d/b/a Millennium Title, No. D-1-GN-16-000360, Texas, 53rd Dist., Travis Co.).

    Mealey's Insurance - Court Upholds Ruling Ordering Man To Pay Restitution For False Claims

    SAN DIEGO - A California appeals panel on Nov. 14 upheld a trial judge's decision to require a man convicted of making false statements to physicians in connection with a workers' compensation claim to pay $30,154.02 to a risk services company, after finding that the defendant was unable to show that the amount should be limited to expenses caused by the crime for which he was convicted (The People of the State of California v. Chany Lopez, No. D069140, Calif. App., 4th Dist., Div. 1; 2016 Calif. App. Unpub. LEXIS 8197).

    Mealey's Insurance - Reinsured Asks Court To Compel Reinsurer To Arbitrate Dispute

    NEW YORK - An insurer representing itself and its affiliates petitioned a federal court in New York on Nov. 14 for an order compelling a reinsurer to arbitrate a $3.8 million dispute that the insurer insists is between it and the reinsurer and does not involve a pool of other parties as the reinsurer allegedly claims (In the Matter of the Arbitration Between National Union Fire Insurance Company of Pittsburgh, PA v. Federal Insurance Company, No. 16-cv-08821, S.D. N.Y.).

    Mealey's Insurance - Plaintiffs Appeal Ruling That Claims Against W.R. Grace Insurers Are Barred

    WILMINGTON, Del. - Twenty-seven asbestos disease sufferers on Nov. 14 asked a Delaware federal court to decide if a bankruptcy judge erred in finding that their state law personal injury claims against insurers of Chapter 11 debtor W.R. Grace & Co. are barred by an injunction in W.R. Grace's plan of reorganization (Continental Casualty Company, et al. v. Jeremy B. Carr, et al., No. 16-1010, D. Del.).

    Mealey's Insurance - Georgia Panel Affirms Reformation Of Policy Due To Parties' Mutual Mistake

    ATLANTA - A Georgia appeals panel on Nov. 14 affirmed a trial court's decision to reform a commercial insurance policy to identify the proper insured in a wrongful death coverage dispute because of a mutual mistake made by the applicant and the insurer (Occidental Fire and Casualty of North Carolina v. Goodman, et al., Nos. A16A1372 and A16A1373, Ga. App., 3rd Div.; 2016 Ga. App. LEXIS 639).

    Mealey's Insurance - Home Health Agency Owner Convicted For Role In $13M Medicare Fraud Scheme

    HOUSTON - A federal jury in Texas on Nov. 10 convicted the co-owner of a home health agency for her role in a $13 million Medicare fraud scheme that operated from February 2006 to June 2015 (United States of America v. Ebong Tilong, et al., No. 15-cr-591, S.D. Texas).

    Mealey's Insurance - Judge Denies Petition To Vacate Arbitration Award, Grants Confirmation

    NEW YORK - A federal judge in New York on Nov. 10 denied an insurer's petition to vacate a reinsurance arbitration award and granted a reinsurer's cross-petition to confirm the award, holding that the court could review only whether the arbitrators had done their job and not whether their interpretation of a reinsurance agreement was correct (Yosemite Insurance Company v. Nationwide Insurance Company, No. 16-cv-05290, S.D. N.Y.; 2016 U.S. Dist. LEXIS 157061).

    Mealey's Insurance - Panel Affirms $29,799,781 Judgment Against Insurer In Malpractice Coverage Dispute

    NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Nov. 14 rejected a professional liability insurer's argument that its policy's prior-knowledge exclusion bars coverage for an underlying malpractice claim against its law firm insured, affirming a $29,799,781.79 judgment against the insurer (OneBeacon Insurance Co. v. T. Wade Welch & Associates, et al., No. 15-20402, 5th Cir.; 2016 U.S. App. LEXIS 20440).

    Mealey's Insurance - Judge: Insurer Liable For Default Judgment Up To $2M Multiple Claims Policy Limit

    CINCINNATI - Ruling on dueling summary judgment motions, an Ohio federal judge on Nov. 9 held that an insurer is not entitled to rescind its professional errors and omissions liability policy and breached its contract as a matter of law by both refusing to defend its insured in an underlying lawsuit and refusing to pay the damages award that was legally obtained against its insured in a default judgment (Maxum Indemnity Co. v. National Condo & Apartment Insurance Group, et al., No. 13-191, S.D. Ohio; 2016 U.S. Dist. LEXIS 155576).

    Mealey's Insurance - Federal Judge Finds Parties Properly Aligned, Reinstates Order In Favor Of Insurer

    LONDON, Ky. - Following remand from the Sixth Circuit U.S. Court of Appeals to evaluate subject matter jurisdiction, a Kentucky federal judge on Nov. 9 held that parties were properly aligned in a dispute over whether additional coverage is owed to satisfy an underlying $3,736,278 judgment against an insured for breaching its duty to exercise ordinary care to maintain its common areas (Evanston Insurance Co. v. Housing Authority Of Somerset, et al., No. 14-027, E.D. Ky.; 2016 U.S. Dist. LEXIS 155273).

    Mealey's Insurance - Insurer's Claims In Asbestos Coverage Suit Are Not Ripe, Arizona Federal Judge Says

    PHOENIX - An Arizona federal judge on Nov. 10 dismissed an insurer's claims seeking a coverage declaration for two underlying asbestos suits filed against its insured after determining that the insurer's claims are not ripe for adjudication because the policies' self-insured retentions have likely not been met by a settlement in one of the underlying suits and the other underlying suit is still pending in Arizona state court (Berkshire Hathaway Specialty Insurance Co. v. City of Phoenix, et al., No. 16-1083, D. Ariz.; 2016 U.S. Dist. LEXIS 156234).

    Mealey's Insurance - Judge: Insurer's Actions During Negotiations Do Not Support Bad Faith Claim

    PHILADELPHIA - A federal judge in Pennsylvania on Nov. 9 granted an insurer's motion for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that an insured failed to present any evidence to support her bad faith claim with regard to the insurer's handling of her homeowners insurance claim (Lillian Pecko v. Allstate Insurance Co., No. 16-1988, E.D. Pa.; 2016 U.S. Dist. LEXIS 155355).

    Mealey's Insurance - Judge: Insured Cannot Bring Fiduciary Duty Claim Without Asserting Bad Faith

    ALBUQUERQUE, N.M. - New Mexico does not recognize a claim for breach of fiduciary duty against an insurer independent of a bad faith claim in insurance disputes, a federal judge in New Mexico ruled Nov. 9, rejecting an insured's motion for partial summary judgment and denying her motion to certify three questions pertaining to her breach of fiduciary duty claim to the state Supreme Court (Grace C. Lucero v. Allstate Insurance Co., No. 15-1098, D. N.M.; 2016 U.S. Dist. LEXIS 155279).

    Mealey's Insurance - Judge: Insurer Has Duty To Defend Cosby Under Massachusetts, California Law

    SPRINGFIELD, Mass. - A Massachusetts federal judge on Nov. 8 found that under either Massachusetts or California law, William H. Cosby Jr.'s homeowners and excess insurer has a duty to defend him against underlying defamation lawsuits arising from sexual assault claims (AIG Property Casualty Co. v. Tamara Green, et al., No. 15-30111, D. Mass.; 2016 U.S. Dist. LEXIS 154881).

    Mealey's Insurance - Panel: No Coverage Owed To Securities Broker Dealer For $2.6M Employee Theft

    CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Nov. 9 affirmed a lower federal court's finding that there is no coverage under a financial institution bond or an errors and omissions insurance policy for claims arising from the alleged $2.6 million theft committed by an insured's employee (Hantz Financial Services Inc., et al v. American Int'l Specialty, et al., No. 15-2237, 6th Cir.).

    Mealey's Insurance - Judge Finds Appraisal Clause Binds Insured From Litigating Dispute Over Money

    CHICAGO - An appraisal clause's use of the word, "binding" made clear to an insured that by participating in the appraisal process, it foreclosed its opportunity to litigate the amount an insurer owed it for damage to a building covered by the insurance policy, an Illinois federal judge ruled Nov. 7, dismissing a breach of contract claim (70th Court Condo Association v. Ohio Security Insurance Co. and Donan Engineering Co. Inc., No. 16-07723, N.D. Ill.; 2016 U.S. Dist. LEXIS 153959).

    Mealey's Insurance - Insurer Owes Duty To Defend Environmental Contamination Suit, Federal Judge Says

    LOS ANGELES - An insurer has a duty to defend its insureds against underlying environmental contamination claims because the policy's chemical discharge exclusion does not apply to the underlying suit; however, the insureds are not entitled to independent counsel, a California federal judge said Nov. 7 (Hollyway Cleaners & Laundry Co., et al. v. Central National Insurance Company of Omaha Inc., No. 13-7497, C.D. Calif.; 2016 U.S. Dist. LEXIS 155003).

    Mealey's Insurance - Claimant's Insurance Bad Faith Claim Not Redundant, Federal Judge Rules

    BROOKLYN, N.Y. - A claimant has properly stated a claim for breach of the implied covenant of good faith and fair dealing in a disability benefits dispute because the claim is not redundant and "cannot be questioned that such a claim generally exists under New York law," a federal judge in New York ruled Nov. 7 in granting in part and denying in part an insurer's motion to dismiss (Barry Pastor v. Woodmere Fire District, et al., No. 16-892, E.D. N.Y.; 2016 U.S. Dist. LEXIS 154859).

    Mealey's Insurance - Insurer Must Produce Attorney Billing Records In Auto Accident Contractual Suit

    LAS VEGAS - An insurer's attorney billing records in an underlying lawsuit over auto accident liability claims may be material to contractual and bad faith claims in the related coverage dispute, a Nevada federal magistrate judge ruled Nov. 4, granting in part the claimants' motion to compel (Melinda Booth Dogra, et al. v. Liberty Mutual Fire Insurance Co., No. 2:14-cv-01841, D. Nev.; 2016 U.S. Dist. LEXIS 154121).

    Mealey's Insurance - DOJ: Co-Owner Of Home Health Care Agency Sentenced To 96 Months In Prison

    ANN ARBOR, Mich. - The U.S. Department of Justice (DOJ) announced Nov. 7 that the co-owner of a Detroit-area home health care agency has been sentenced by a federal judge in Michigan to 96 months in prison and ordered to pay $38 million in restitution after being found guilty for his role in a $33 million Medicare fraud scheme (United States of America v. Zafar Mehmood, et al., No. 12-cr-20042, E.D. Mich.).

    Mealey's Insurance - Texas High Court Postpones Oral Argument In Discovery Dispute Over Attorney Fees

    AUSTIN, Texas - Two days before oral argument was scheduled to begin in a dispute over discovery requests concerning relators' attorney fees in a multidistrict litigation hailstorm property damage coverage dispute, the Texas Supreme Court reset oral argument for Feb. 7, according to a Nov. 8 pronouncement (In Re National Lloyds Insurance Co., Wardlaw Claims Service Inc. and Ideal Adjusting Inc., No. 15-0591, Texas Sup.).