LexisNexis® Legal Newsroom
    Mealey's Insurance - Judge Tosses Dueling Summary Judgment Motions In Directors, Officers Coverage Suit

    CENTRAL ISLIP, N.Y. - A New York federal judge on June 23 denied dueling motions for summary judgment in a coverage dispute arising from alleged breaches of contractual obligations under two promissory notes and a consulting agreement by the insured and its directors and officers (Intelligent Digital Systems LLC, et al. v. Beazley Insurance Company Inc., No. 12-1209, E.D. N.Y.; 2015 U.S. Dist. LEXIS 82742).

    Mealey's Insurance - Judge Dismisses Counterclaim Seeking Indemnification In Business Liability Dispute

    CHICAGO - An Illinois federal judge on June 23 granted an insurer's motion to dismiss an office supply company insured's counterclaim alleging that it is entitled to declaratory relief regarding the insurer's indemnification duties in an underlying lawsuit alleging misappropriation of trade secrets, unfair competition and civil conspiracy (Sentinel Insurance Co. v. Yorktown Industries Inc., No. 14 CV 4212, N.D. Ill., Eastern Div.; 2015 U.S. Dist. LEXIS 81419).

    Mealey's Insurance - Insurer Has No Duty To Defend Insured's Alleged Failed Logistical System

    ELGIN, Ill. - An insurer has no duty to defend an insured against underlying allegations of improper design and implementation of a solution to logistical and supply chain processes, an Illinois appeals panel affirmed June 25 (Century Surety Co. v. Winchester Industrial Controls LLC, No. 2-14-0969, Ill. App., 2nd Dist.; 2015 Ill. App. Unpub. LEXIS 1403).

    Mealey's Insurance - Judge Orders Reinsurer To Consolidate Its Actions Against A Foreign Reinsured

    NEW YORK - In an electronic order, a federal judge in New York on June 25 unsealed a number of related reinsurance disputes and ordered that a consolidated complaint be filed (National Indemnity Company v. IRB Brasil Resseguros S.A., No. 15-cv-01165; National Indemnity Company v. IRB Brasil Resseguros S.A., No. 15-cv-02939; National Indemnity Company v. IRB Brasil Resseguros S.A., No. 15-cv-03310 and National Indemnity Company v. IRB Brasil Resseguros S.A., No. 15-cv-03975, S.D. N.Y.).

    Mealey's Insurance - Judge Won't Grant Summary Judgment In Bad Faith Lawsuit

    DENVER - An insured has not shown that his federal bankruptcy court and district court positions in an insurance bad faith lawsuit are clearly inconsistent, a federal judge in Colorado ruled June 23 in denying an insurer's motion for summary judgment in the district court action (Daniel L. Porter v. American Family Mutual Insurance Co., No. 13-3446, D. Colo.; 2015 U.S. Dist. LEXIS 81301).

    Mealey's Insurance - Panel: Whether Insured's Claim Was Barred By Known-Loss Provision Is Triable Issue

    SAN FRANCISCO - There is a triable issue as to whether an insured's claim for property damage under a commercial general liability insurance policy was precluded by the known-loss provision, the Ninth Circuit U.S. Court of Appeals ruled June 25, reversing the entry of summary judgment to an insurer and remanding (Randy Kaady v. Mid-Continent Casualty Co., No. 13-35036, 9th Cir.; 2015 U.S. App. LEXIS 10754).

    Mealey's Insurance - Florida Panel Finds Discovery Order On Hospital Exceeded Statute's Scope

    TALLAHASSEE, Fla. - A trial court erred in ordering a hospital to produce confidential contracts between it and 37 health insurers, a Florida appeals panel ruled June 22, finding that the scope of the law under which the order was issued did not extend to such documents (Shands Jacksonville Medical Center Inc. v. State Farm Mutual Automobile Insurance Co., No. 1D14-2001, Fla. App., 1st Dist.).

    Mealey's Insurance - High Court Affirms Availability Of Tax Credits In ACA Federal Exchange

    WASHINGTON, D.C. - The Patient Protection and Affordable Care Act (ACA)'s structure suggests the availability of tax subsidies in the federal exchange, and Congress could not have intended the state insurance market "death spirals" likely to result from barring such subsidies, a divided U.S. Supreme Court held June 25 (David King, et al. v. Sylvia Mathew Burwell, et al., No. 14-114, U.S. Sup.).

    Mealey's Insurance - Judge Grants Insured's Voluntarily Dismissal Of Superstorm Sandy Dispute

    CAMDEN, N.J. - A New Jersey federal judge on June 23 granted an insured's motion for voluntarily dismissal of his breach of contract lawsuit against his federal flood insurer in a Superstorm Sandy coverage dispute (Ernie Giordano v. Philadelphia Contributionship Insurance Co., No. 14-0904, D. N.J.; 2015 U.S. Dist. LEXIS 80859).

    Mealey's Insurance - Federal Judge Substantially Denies Motion To Dismiss In Bad Faith Lawsuit

    SCRANTON, Pa. - A federal judge in Pennsylvania on June 23 substantially denied an insurer's motion to dismiss in an insurance bad faith lawsuit, ruling that an insured has properly shown that her bad faith claim does not "fall within the purview" of Pennsylvania's Motor Vehicle Financial Responsibility Law (Kerry Odgers v. Progressive Northern Insurance Co., No. 15-329, M.D. Pa.; 2015 U.S. Dist. LEXIS 80981).

    Mealey's Insurance - Insurer Did Not Err In Terminating Long-Term Benefits, Federal Judge Say

    GRAND RAPIDS, Mich. - Because an administrative record fully supports a disability insurer's termination of long-term disability benefits, a Michigan federal judge on June 23 upheld the insurer's decision to terminate benefits (Kathy Hall v. United of Omaha Life Insurance Co., No. 14-08, W.D. Mich.; 2015 U.S. Dist. LEXIS 80995).

    Mealey's Insurance - Illinois Panel: Fact Issues As To Reasonableness Of $6M Settlement Require Reversal

    ELGIN, Ill. - An Illinois appeals panel on June 23 found that there are fact issues regarding the reasonableness of a $6 million settlement in an unsolicited fax ads transmission dispute, reversing and remanding a coverage dispute over the settlement (Stonecrafters Inc. v. Wholesale Life Insurance Brokerage Inc., et al., No. 2-14-0728, Ill. App., 2nd Dist.; 2015 Ill. App. Unpub. LEXIS 1390).

    Mealey's Insurance - Insurer Has Duty To Cover Former Trustees' Defense Expenses, Federal Judge Says

    ALBANY, N.Y. - An insurer is obligated to provide directors and officers liability coverage for the defense expenses incurred in two underlying lawsuits by former trustees of an insolvent workers' compensation self-insurance trust, a New York federal judge ruled June 23 (Judy Balaban-Krauss et al. v. Executive Risk Indemnity Inc., No. 13-282, N.D. N.Y.; 2015 U.S. Dist. LEXIS 80817).

    Mealey's Insurance - Panel: Issues Exist Over Whether Insurer Complied With Duty For Replacement Cost

    ST. LOUIS - There are issues of material fact regarding whether an insurer could comply with its contractual obligation to provide the replacement cost "for equivalent construction and use on the same premises," a Missouri appeals panel ruled June 23, finding that a trial court erred in granting summary judgment to the insurer (Deborah J. Alessi v. Mid-Century Insurance Company Inc., No. ED102261, Mo. App., Eastern Dist., Div. 3; 2015 Mo. App. LEXIS 679).

    Mealey's Insurance - Panel: Insurer Has No Duty To Reimburse Insurer For Costs Incurred Over Defect Claims

    SAN FRANCISCO - A pollution liability insurer has no duty to reimburse $241,392.87 to a commercial general liability insurer for costs incurred in defending underlying lawsuits arising out of damages from construction work, the Ninth Circuit U.S. Court of Appeals ruled June 23, finding that the pollution liability policy was excess and did not apply until the primary coverage was exhausted (Gemini Insurance Co. v. Indian Harbor Insurance Co., No. 13-16643, 9th Cir.; 2015 U.S. App. LEXIS 10616).

    Mealey's Insurance - 8th Circuit: Judge Did Not Err In Granting Summary Judgment In Bad Faith Suit

    ST. LOUIS - A federal judge did not err in granting summary judgment in an insurance bad faith lawsuit because an insured failed to show that his insurer acted in bad faith by failing to reach a settlement with certain claimants for the full policy limit, an Eighth Circuit U.S. Court of Appeals panel ruled June 22 (Ben Purscell v. Tico Insurance Co., et al., No. 13-2362, 8th Cir.; 2015 U.S. App. LEXIS 10438).

    Mealey's Insurance - Reinsurer Asks For More Than $7 Million In Amended Counterclaims

    BOSTON - After being granted leave to file an amended answer, a reinsurer asked a federal court in Massachusetts on June 18 to award it more than $7 million from its reinsured (OneBeacon America Insurance Company v. Transatlantic Reinsurance Company, No. 14-cv-14067, D. Mass.).

    Mealey's Insurance - Judge Lifts Stay On Reinsurance Arbitration Case

    BOSTON - A federal judge in Massachusetts on June 19 lifted a stay on a reinsurance dispute in an electronic order after learning that a panel had made its final ruling in the underlying arbitration (OneBeacon America Insurance Company, et al. v. Allstate Insurance Company, No. 14-cv-12562, D. Mass.).

    Mealey's Insurance - Insurer's Wear-And-Tear Exclusion Bars Coverage For Water Damage, Judge Says

    HARRISBURG, Pa. - An insurance policy's wear-and-tear provision excludes coverage for an insured's claimed loss from water damage during Superstorm Sandy, a Pennsylvania federal judge ruled June 22 (Steven J. Inc. v. Landmark American Insurance Co., No. 14-0474, M.D. Pa.; 2015 U.S. Dist. LEXIS 80278).

    Mealey's Insurance - Panel Says Cracking, Faulty Design Exclusions Do Not Apply To Insured's Collapse Loss

    CINCINNATI - Exclusions for cracking and defective design do not apply under a business owners insurance policy to a collapse extension, and there are genuine issues of material fact as to whether decay occurred, the Sixth Circuit U.S. Court of Appeals held June 22, reversing the grant of summary judgment to an insurer and remanding the case for further proceedings (Joy Tabernacle-The New Testament Church v. State Farm Fire and Casualty Co., No. 14-2160, 6th Cir.).

    Mealey's Insurance - No Coverage For Filmmaker's Archive Destroyed In Wildfire, Texas Panel Affirms

    AUSTIN, Texas - A Texas appeals panel held June 18 that an insurer did not waive any geographic limitation to its commercial personal property policy coverage because the covered locations were described in the renewal certificate and supplemental declarations of the policy, affirming a lower court's ruling in favor of an insurer in a coverage dispute over a filmmaker's archive of materials destroyed in a wildfire (3109 Props, L.L.C., et al. v. Truck Insurance Exchange, No. 03-13-00350-CV, Texas App., 3rd Dist.; 2015 Tex. App. LEXIS 6146).

    Mealey's Insurance - 2nd Circuit Says Venue Was Proper, Affirms Convictions In Disability Fraud Suit

    NEW YORK - A Second Circuit U.S. Court of Appeals panel on June 22 affirmed the conviction and sentencing of three defendants accused of submitting false disability claims to the Long Island Railroad's (LIRR) Railroad Retirement Board (RRB), finding that the defendants were unable to show that the U.S. District Court for the Southern District of New Hampshire was an improper forum (United States of America v. Joseph Rutigliano, et al., Nos. 14-152, 14-759, 14-1339, 2nd Cir.; 2015 U.S. App. LEXIS 10443).

    Mealey's Insurance - Judge Approves Settlement Between Insurer, Insured In Construction Defects Dispute

    RENO, Nev. - A Nevada federal judge on June 18 approved a settlement between a commercial general liability insurer and its insured and vacated orders finding that the insurer has a duty to defend an underlying construction defects case because a designated work exclusion and a pre-existing damage exclusion do not apply (Gemini Insurance Co. v. North American Capacity Insurance Co., No. 14-00121, D. Nev.; 2015 U.S. Dist. LEXIS 80239).

    Mealey's Insurance - Insured Failed To State A Claim For Relief In Bad Faith Suit, Judge Rules

    SAN DIEGO - A federal judge in California on June 19 granted an insurer's motion to dismiss in an insurance bad faith lawsuit, ruling that an insured failed to state a claim for relief on any of his claims filed (Edmond Petrus, et al. v. New York Life Insurance Co., et al., No. 14-2268, S.D. Calif.; 2015 U.S. Dist. LEXIS 79306).

    Mealey's Insurance - Insurer's Interests Were Represented By Predecessor In Interest, Federal Judge Says

    NEW ORLEANS - A Louisiana federal judge on June 18 rejected an insurer's argument that a now-deceased plaintiff's deposition testimony should be excluded after determining that the insurer, which was not present when the depositions were held, was represented by the presence of its predecessor in interest at the depositions (Sally Gros Vedros, et al. v. Northrop Grumman Shipbuilding Inc., et al., No. 11-1198, E.D. La.; 2015 U.S. Dist. LEXIS 79219).