LexisNexis® Legal Newsroom
    Mealey's Insurance - Judge Stays Reinsurance Dispute, Waits For Decision In Other Court

    PHILADELPHIA - A federal judge in Pennsylvania on March 3 granted a motion to stay a reinsurance dispute pending a jurisdictional decision in a parallel case in another federal court (St. Paul Fire and Marine Insurance Company v. R&Q Reinsurance Company, No. 15-cv-5528, E.D. Pa.).

    Mealey's Insurance - Delaware Judge Denies Insured's Motion For Reargument In Asbestos Suit

    WILMINGTON, Del. - A Delaware judge on March 2 denied an insured's motion for reargument, rejecting the insured's argument that the excess policies' trigger clauses were not properly interpreted by the court (Motors Liquidation Co. DIP Lenders Trust v. Allianz Insurance Co., No. N11C-12-022 PRW, Del. Super., New Castle Co.; 2016 Del. Super. LEXIS 110).

    Mealey's Insurance - Insureds Permitted To File Amended Complaint, New Jersey Appellate Panel Says

    TRENTON, N.J. - A trial court did not err in granting a motion to dismiss a complaint; however, the plaintiffs are permitted to file a second amended complaint against their insurers because the dismissal was without prejudice, the New Jersey Superior Court Appellate Division said March 3 (Marolda Farms Inc. et al. v. Maryland Casualty Insurance Co. et al., No. A-5897-13T4, N.J. Super., App. Div.; 2016 N.J. Super. Unpub. LEXIS 459).

    Mealey's Insurance - 5th Circuit Affirms Dismissal Of Claims Arising From Municipal Bonds Dispute

    NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on March 2 affirmed a lower federal court's dismissal of breach of contract, bad faith and detrimental reliance claims in a dispute over whether an agreement between The City of New Orleans and a municipal bonds insurer obligated the insurer to retain its credit worthiness (New Orleans City v. Ambac Assurance Corp., et al., No. 15-30532, 5th Cir.; 2016 U.S. App. LEXIS 3960).

    Mealey's Insurance - Arizona Panel: Claim Similar To 'Wrongful Acts' Alleged In Securities Fraud Suit

    PHOENIX - An Arizona appeals panel on March 3 found that a lawsuit against an insured's directors and officers was based in large part on the same or similar "wrongful acts" that were at issue in a previously filed securities fraud class action, affirming a lower court's ruling in favor of a directors and officers liability insurer (SP Syntax LLC, et al. v. Federal Insurance Co., No. 1 CA-CV 14-0638, Ariz. App., Div. 1; 2016 Ariz. App. Unpub. LEXIS 278).

    Mealey's Insurance - 7th Circuit: Insurer Can Rescind Policy Over Misrepresentations

    CHICAGO - An insurance company can rescind a policy it issued to a doctor and a weight loss clinic because the applicants misrepresented that they use experimental procedures for the purpose of weight reduction, a Seventh Circuit U.S. Court of Appeals panel ruled March 4 in affirming the insurer's summary judgment award (Essex Insurance Company v. Galilee Medical Center S.C., et al., No. 14-1791, 7th Cir.; 2016 U.S. App. LEXIS 4139).

    Mealey's Insurance - Texas Judge OKs $9 Million Payment From Insurer's Receivership To Asbestos Trust

    AUSTIN, Texas - A Texas judge on March 1 approved an agreement between an insurer's receivership estate and a trust set up to deal with asbestos related claims against a company in bankruptcy (State of Texas v. Highlands Insurance Company, No. D-1-GV-03-004537, Texas, 53rd Dist., Travis Co.).

    Mealey's Insurance - Judge Names Master To Make Recommendations About Title Insurer's Receivership

    AUSTIN, Texas - A Texas judge on March 1 appointed a master to make recommendations regarding a number of actions that could come before the court during a title insurer's receivership proceeding (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 - Rehabilitator Petitions Court To Place Insurer Into Liquidation

    CHICAGO - The rehabilitator of an insurer asked an Illinois court on March 1 to declare the insurer insolvent and order it into liquidation (In the Matter of the Rehabilitation of Affirmative Insurance Company, No. 15 CH 13718, Ill. Cir., Cook Co., Chanc. Div.).

    Mealey's Insurance - Judge Refuses To Dismiss Additional Insured's Breach Of Contract, Bad Faith Claims

    SAN DIEGO - Whether an insurer timely and reasonably accepted tender of an additional insured's construction defects claim presents a question of fact not properly resolved on a motion to dismiss, a California federal judge ruled March 2, declining to dismiss counterclaims for breach of contract and bad faith (St. Paul Mercury Insurance Co. v. McMillin Homes Construction, Inc., et al., No. 15-1548, S.D. Calif.; 2016 U.S. Dist. LEXIS 26461).

    Mealey's Insurance - Judge Orders Man To Reimburse Insurer $107,148 For Fraudulent Claims

    AUSTIN, Texas - A federal judge in Texas on March 3 ordered a man to reimburse his insurer for $107,148.89 in payments it made to him for claims that were fraudulently submitted for the "loss of use" of his home as it was being repaired for water damage, holding that the policy at issue allows the insurer to seek reimbursement for claims based on fraud (Safeco Insurance Company of Indiana v. Charles Igwe, No. AU-14-587-DAE, W.D. Texas; 2016 U.S. Dist. LEXIS 26868).

    Mealey's Insurance - Judge: Fact Issue Exists As To Whether Insured Agreed To Split Allocation Of Costs

    NEW ORLEANS - A Louisiana federal judge held Feb. 29 that although a directors and officers liability insurance policy's allocation clause limiting an insurer's duty to defend is not prohibited by Louisiana public policy, there remains a genuine issue of material fact regarding whether the insured ever agreed to a "fifty-fifty allocation" of defense costs (Housing Authority Of New Orleans v. Landmark Insurance Co., No. 15-1080, E.D. La.; 2016 U.S. Dist. LEXIS 24419).

    Mealey's Insurance - Judge: Insured Fails To Prove Causal Relationship Between Windstorm, Property Damage

    CHICAGO - An Illinois federal judge on Feb. 29 held that a church insured has failed to adduce evidence of a causal relationship between a March 1, 2011, windstorm and its alleged property damage, granting the insurer's motion for summary judgment in a breach of contract and bad faith lawsuit (Olivet Baptist Church v. Church Mutual Insurance Co., No. 13 C 1625, N.D. Ill., Eastern Div.; 2016 U.S. Dist. LEXIS 25294).

    Mealey's Insurance - Judge: Insured Breached Insurance Policy By Refusing To Submit To Examination

    JACKSON, Miss. - A federal judge in Mississippi on Feb. 26 granted an insurer's motion for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that an insured's refusal to submit to a second examination under oath (EUO) breached the terms of the insurance agreement, allowing the insurer to decline the insured's claim for coverage (Eddie Gray Holt v. Victoria Fire and Casualty Co., No. 15-077, S.D. Miss.; 2016 U.S. Dist. LEXIS 23744).

    Mealey's Insurance - Insured's Claims In Bad Faith Suit Preempted By ERISA, Judge Rules

    NEW YORK - Dismissal of all state law claims in an insurance bad faith lawsuit is proper, a federal judge in New York ruled March 1, because an insured's claims against her long-term disability insurance provider are preempted by the Employee Retirement Income Security Act (ERISA) (Elizabeth Boey Chau, M.D. v. Hartford Life Insurance Co., et al., No. 14-8484, S.D. N.Y.; 2016 U.S. Dist. LEXIS 25135).

    Mealey's Insurance - Judge: Insureds Sufficiently Pleaded Allegations To Support Counterclaims

    SACRAMENTO, Calif. - Dismissal of counterclaims for insurance breach of contract and bad faith is not proper, a federal judge in California ruled March 1, because insureds have pleaded sufficient allegations to support their claims (Lancer Insurance Co. v. Alpha Dyno Nobel, et al., No. 14-2018, E.D. Calif.; 2016 U.S. Dist. LEXIS 25450).

    Mealey's Insurance - Wisconsin High Court: Inclusion Of Defective Ingredient Not Property Damage

    MADISON, Wis. - The majority of the Wisconsin Supreme Court on March 1 determined that two insurers have no duty to cover claims related to damages caused by the inclusion of a defective ingredient in a probiotic supplement because the inclusion of the defective ingredient did not damage other property and did not result in loss of use of property (Wisconsin Pharmacal LLC v. Nebraska Cultures of California Inc., et al., Nos. 2013AP613, 2013AP687, Wis. Sup.; 2016 Wisc. LEXIS 12).

    Mealey's Insurance - Insured Failed To Timely Notify Insurer Of Property Damage Claim, Panel Says

    LOS ANGELES - An insured knew by 2008 that at least one insured structure had suffered damage from a neighbor's negligent construction activities but failed to timely notify the insurer or to file suit within the policy's two-year contractual limitations provision, a California appeals panel held Feb. 29, affirming summary judgment to the insurer (Anthony N. Kling as Trustee of the Anthony N. Kling Trust of 1997 v. Farmers Insurance Exchange, No. B260738, Calif. App., 2nd Dist., Div. 4; 2016 Cal. App. Unpub. LEXIS 1458).

    Mealey's Insurance - Olympus Pays $646M In Criminal, Civil Penalties For Kickbacks, False Claims

    NEWARK, N.J. - Olympus Corp. of the Americas and a Latin America subsidiary will pay $646 million in criminal and civil penalties for paying kickbacks to health care providers to buy its endoscopes and causing false claims to be paid by federal health care programs, according to documents filed March 1 in the U.S. District Court for the District of New Jersey (United States of America v. Olympus Corporation of the Americas, No. 16-3524, and United States ex rel. Slowik, et al. v. Olympus America. Inc., et al., No. 10-5994, D. N.J.).

    Mealey's Insurance - Insurer Files Notice Of Appeal, Challenges Judge's Policy Rescission Ruling

    PITTSBURGH - An insured filed a notice of appeal to the Third Circuit U.S. Court of Appeal on March 1, challenging a Pennsylvania federal judge's finding that an insurer's rescission of a product contamination insurance policy was warranted (H.J. Heinz Co. v. Starr Surplus Lines Insurance Co., No. 15-0631, W.D. Pa.).

    Mealey's Insurance - Panel Affirms Ruling In Insurer's Favor In Coverage Suit Over HIPAA Investigation

    CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Feb. 29 affirmed a lower federal court's ruling in favor of an excess insurer in a coverage dispute stemming from an underlying federal investigation involving Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulations (Ashland Hospital Corp., d/b/a King's Daughters Medical v. RLI Insurance Co., No. 15-5377, 6th Cir.).

    Mealey's Insurance - Panel Affirms Ruling In Insurer's Favor In Employment Practices Liability Dispute

    ATLANTA - The 11th Circuit U.S. Court of Appeals on March 1 affirmed a lower federal court's ruling in favor of an insurer in a coverage dispute over an underlying lawsuit seeking damages for $1.9 million in past due premiums pursuant to a contract between an employee-leasing company insured and Blue Cross Blue Shield (BCBS), noting that the underlying suit is a "run of the mill" breach of contract dispute and does not seek damages for the wrongful diversion of funds (Payroll Management, Inc., et al. v. Lexington Insurance Company, No. 15-10314-EE, 11th Cir.; 2016 U.S. App. LEXIS 3790).

    Mealey's Insurance - Maryland Woman Pleads Guilty For Forging Prescriptions As Part Of Fraud Scheme

    WASHINGTON, D.C. - A Maryland woman pleaded guilty on Feb. 25 to charges of forging prescriptions and being involved with a health care fraud scheme and agreed to pay $16,175 (United States of America v. Claire Elizabeth Rice, No. 14-cr-56, D. D.C.).

    Mealey's Insurance - Judge Remands Insurer's Suit Against Excess Insurer Over Water Damage Claims

    LOS ANGELES - Resolution of a primary insurer's coverage lawsuit against an excess insurer for a mutual insured's water damage claims would require the "needless determination of state law issues and would be duplicative of, and possibly inconsistent with, state court proceedings," a California federal judge ruled Feb. 26, granting a motion to remand (James River Insurance Co. v. Starr Indemnity and Liability Co., No. 15-09972, C.D. Calif.; 2016 U.S. Dist. LEXIS 24705).

    Mealey's Insurance - Judge: Evidence Of Property Value Can Show Motive To Commit Arson Fraud

    SPRINGFIELD, Mo. - A federal judge in Missouri on Feb. 29 denied a couple's motion to strike Allstate Indemnity Co.'s disclosure of two nonretained experts, holding that evidence regarding the value of the couple's home could be used to show if they had a motive to commit arson fraud (Allstate Indemnity Company v. Joseph Dixon, et al., No. 14-cv-03489-MDH. W.D. Mo.; 2016 U.S. Dist. LEXIS 24678).