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.).
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).
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).
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).
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).
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).
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.).
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.).
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.).
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).
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).
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).
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).
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).
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).
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).
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).
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).
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.).
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.).
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.).
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).
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.).
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).
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).