PHOENIX - Coverage was unavailable to a general contractor as an additional insured for the cost of replacing a subcontractor's faulty work under an insurance policy's "your work" exclusion, and the "subcontractor exception" to that exclusion does not apply, an Arizona appeals panel held Dec. 30, reversing and remanding for entry of summary judgment in favor of the insurer (Double AA Builders Ltd. v. Preferred Contractors Insurance Company LLC, No. 1 CA-CV 15-0375, Ariz. App., Div. 1; 2016 Ariz. App. LEXIS 294).
COLUMBIA, S.C. - An insurer's policy excludes coverage for flood damage to the insureds' home, a South Carolina federal judge ruled Dec. 29, granting the insurer's motion for judgment on the pleadings as to claims for breach of contract, breach of contract with fraudulent intent and bad faith refusal to pay (Stephen F. Morris and Martha Morris v. Auto-Owners Insurance Co., No. 16-00880, D. S.C.; 2016 U.S. Dist. LEXIS 179715).
ATLANTA - The 11th Circuit U.S. Court of Appeals on Dec. 29 vacated a lower federal court's ruling that an insured is not owed coverage for claims that it sent unsolicited fax ads because it failed to comply with its general liability insurance policies' notice requirements, remanding the issues of coverage and bad faith (G.M. Sign Inc., as judgment creditor; and assignee of MFG.com v. St. Paul Fire And Marine Insurance Co., No. 16-14905, 11th Cir.; 2016 U.S. App. LEXIS 23376).
SAN FRANCISCO - An insurer argued in a federal court in California on Dec. 20 that its reinsurer's "first-to-file" argument is invalid because the reinsurer did not raise that defense in a previous motion to dismiss the insurer's breach of contract suit (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.).
SAN FRANCISCO - A California federal judge on Dec. 19 determined that a disability claimant's brief return to part-time work does not extend the end of the plan's elimination period for benefits because the claimant's attempt to work in a part-time capacity only bolsters the conclusion that the claimant was still disabled when he returned to part-time work (Marlon Montoya v. Reliance Standard Life Insurance Co., No. 14-2740, N.D. Calif.; 2016 U.S. Dist. LEXIS 175208).
BATON ROUGE, La. - There is no additional coverage, beyond the $10,000 that has already been paid to an insured, for alleged damage following a rainstorm, a Louisiana federal judge held Dec. 20, also finding that an insurance agent was not an agent of the insurer and therefore had no power to bind the insurer to pay for the repairs (Bible World Christian Center v. Colony Insurance Co., No. 15-397, M.D. La.; 2016 U.S. Dist. LEXIS 175766).
MIAMI - An insured cannot bring claims against its insurer for bad faith until it has first shown that the insurer breached the terms of its insurance policy with the insured, a federal magistrate judge in Florida ruled Dec. 19 in granting the insurer's motion to abate the insurer's bad faith claims (Katchmore Luhrs LLC v. Allianz Global & Corporate Specialty, No. 15-23420, S.D. Fla.; 2016 U.S. Dist. LEXIS 175004).
HARRISBURG, Pa. - Over the objections of an insurer, a federal judge in Pennsylvania on Dec. 20 granted a third party's motion to amend her counterclaim against another third party in an interpleader action, ruling that amendment will be allowed because the amendment will be used only to clarify claims already made and not to add new material (MONY Life Insurance Co. v. Carol Snyder, f/k/a Carol Eckert, and Pamela Eckert, No. 15-2109, M.D. Pa.; 2016 U.S. Dist. LEXIS 175414).
BALTIMORE - An insurance policy's faulty workmanship exclusion applies to preclude coverage for an insured's claim for replacing scratched windows, a Maryland federal judge ruled Dec. 20, finding that the ensuing loss provision does not reach the claimed damage (James McHugh Construction Co. v. Travelers Property Casualty Company of America, No. 16-1099, D. Md.; 2016 U.S. Dist. LEXIS 176112).
TOPEKA, Kan. - A Kansas trial court did not err in granting summary judgment in an insurance bad faith lawsuit because the insured failed to provide sufficient evidence showing that material facts were in dispute, a Kansas Court of Appeals panel ruled Dec. 16 in a per curiam opinion (Classico LLC v. United Fire and Casualty Co., et al., No. 114,833, Kan. App.; 2016 Kan. App. Unpub. LEXIS 1014).
TRENTON, N.J. - New Jersey's banking and insurance commissioner on Dec. 15 asked a state court to order an insolvent Patient Protection and Affordable Care Act (ACA) consumer-operated and oriented plan insurer's liquidation (Richard J. Badolato, Commissioner of the Department of Banking and Insurance of New Jersey v. Freelancers Consumer Operated and Oriented Program of New Jersey d/b/a Health Republic Insurance of New Jersey, No. MCR-C-000063-16, N.J. Super., Mercer Co., Chancery Div.).
HONOLULU - Claims based in contract do not constitute an "occurrence" under a commercial general liability insurance policy, a Hawaii federal judge ruled Dec. 16, dismissing counterclaims for breach of contract and reformation against two insurers in a coverage dispute over defects in a construction project (American Automobile Insurance Co. and National Surety Corp. v. Hawaii Nut & Bolt Inc. and Safeway Inc., No. 15-00245, D. Hawaii; 2016 U.S. Dist. LEXIS 174243).
CINCINNATI - An insurer did not act in bad faith in declining to settle a wrongful death lawsuit for policy limits without a release of all claims against its insured because under Kentucky law, the insurer was required to protect its insured from an excess judgment while attempting to settle the claim with the third-party in good faith, a Sixth Circuit U.S. Court of Appeals panel ruled Dec. 15 (Joseph Shaheen, ancillary administrator of the Estate of Nadia Shaheen, deceased, v. Progressive Casualty Insurance Co., No. 15-5863, 6th Cir.; 2016 U.S. App. LEXIS 22422).
CINCINNATI - The Sixth Circuit U.S. Court of Appeal on Dec. 16 affirmed that an insured must reimburse its insurer for more than $2.4 million paid by the insurer for the defense and indemnity of underlying asbestos bodily injury suits but remanded the suit for consideration of the insurer's liabilities that began before the start of the insurance policy and continued during the policy period (Continental Casualty Co., et al. v. Indian Head Industries Inc., No. 15-2217, 6th Cir.; 2016 U.S. App. LEXIS 22431).
DENVER - An insured was entitled to a covered benefit of $350,000 under the terms of an underinsured motorist (UIM) provision of an automobile insurance policy, and payment of those benefits to her were unreasonably delayed by her insurer, a federal judge in Colorado ruled Dec. 14 (Wendy L. Peden v. State Farm Mutual Automobile Insurance Co., No. 14-0982, D. Colo.; 2015 U.S. Dist. LEXIS 119978).
INDIANAPOLIS - An Indiana federal judge on Dec. 14 granted a motion to dismiss filed by insurers involved in an environmental contamination coverage dispute because the insurer, which seeks subrogation from the other insurers, failed to allege in a second amended complaint that all of the insurers covered the same insured (Northern Insurance Company of New York v. Travelers Insurance Co. et al., No. 15-1810, S.D. Ind.; 2016 U.S. Dist. LEXIS 172671).
HARRISBURG, Pa. - The liquidator of an insolvent insurer asked a Pennsylvania court on Dec. 14 to approve the allowance of nearly $140 million in claims from various state insurance guaranty associations (In re: Reliance Insurance Company in Liquidation, No. 1 REL 2001, Pa. Cmwlth.).
TRENTON, N.J. - The New Jersey Supreme Court on Dec. 12 agreed to hear an appeal concerning whether New Jersey law applies to insurance allocation determinations in an asbestos coverage dispute and whether the insured has to share in those coverage allocations after excess coverage for the asbestos bodily injury claims was no longer available (Continental Insurance Co., et al. v. Honeywell International Inc., et al., No. A-21-16, N.J. Sup.).
NEW YORK - An alleged reinsurer told a federal court in New York on Dec. 13 that an arbitration panel, and not the court, should decide the proper parties to a workers' compensation reinsurance coverage dispute (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.).
CHICAGO - An Illinois federal magistrate judge on Dec. 13 denied an insurer's motion to compel the production of unredacted documents and emails after determining that the documents and emails are protected under the work product doctrine because they were prepared in anticipation of litigation regarding coverage for the contamination of the insured's blood products (Baxter International Inc., v. AXA Versicherung, No. 11-cv-09131, N.D. Ill.; 2016 U.S. Dist. LEXIS 172234).
CAMDEN, N.J. - The owner of a labor staffing firm and the manager committed workers' compensation fraud when misrepresenting the job descriptions of its employees in an attempt to obtain avoid paying for workers' compensation insurance, a federal judge in New Jersey ruled Dec. 14 in granting in part Travelers Property Casualty Insurance Co.'s motion for summary judgment (Travelers Property Casualty Insurance Company v. Quickstuff LLC, et al., No. 14-6105, D. N.J.; 2016 U.S. Dist. LEXIS 172522).
PORTLAND, Ore. - Because a contractor is an insured under a builder's risk policy, the anti-subrogation rule applies, which prohibits an insurer from seeking subrogation from its own insured, an Oregon federal judge ruled Dec. 12, granting summary judgment to the contractor on third-party claims in an insurance dispute over reimbursement for construction defects in a project (Factory Mutual Insurance Co. v. PERI Formworks Systems Inc. v. McClone Construction Co., No. 16-264, D. Ore.; 2016 U.S. Dist. LEXIS 171357).
LAS VEGAS - An insured's failure to respond to an insurer's timely requests for information caused a delay in payment of underinsured motorist benefits and not the actions of the insurer, a federal judge in Nevada ruled Dec. 12 in granting the insurer's motion for summary judgment (Loreli Nolan v. American Family Insurance Co., No. 15-2051, D. Nev.; 2016 U.S. Dist. LEXIS 171423).
CINCINNATI - The First District Ohio Court of Appeals on Dec. 14 affirmed a trial court's ruling that an insured's liability for underlying asbestos claims arose from multiple occurrences because each individual's exposure to asbestos constitutes an occurrence (The William Powell Co. v. OneBeacon Insurance Co., et al., No. C-160291, Ohio App., 1st Dist.; 2016 Ohio App. LEXIS 4982).
WILMINGTON, Del. - An appeal by 27 asbestos disease sufferers of a bankruptcy court's finding that their personal injury claims against insurers of Chapter 11 debtor W.R. Grace & Co. are barred will not be resolved through mediation, a Delaware federal judge ruled Dec. 13, agreeing with a magistrate judge that the issues involved "are not amenable to mediation" (Jeremy B. Carr, et al. v. Continental Casualty Company, et al., No. 16-1010, D. Del.).