LexisNexis® Legal Newsroom
    Mealey's Insurance - 5th Circuit Affirms $16.5M Award For Reinsurer's Tortious Interference Claims

    NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on May 18 affirmed a lower federal court's ruling that ordered two insurance agencies to pay $16.5 million in damages to a reinsurer on the reinsurer's tortious interference claim, but reversed parts of the ruling that were appealed by the reinsurer (Lincoln General Insurance Co. v. U.S. Auto Insurance Services, No. 13-10589, 5th Cir.; 2015 U.S. App. LEXIS 8172).

    Mealey's Insurance - Policy Clearly Bars Coverage For Damages Caused By Oil Spill, New Jersey Panel Says

    TRENTON, N.J. - No coverage is available to homeowners for damages caused to their own property by a leaking underground fuel storage tank because the policy clearly excludes coverage under the owned property exclusion and limits coverage related to liability claims related to oil spills, the New Jersey Superior Court Appellate Division said May 15 (Stanley and Leah Weiss v. New Jersey Manufacturers Insurance Co., No.A-5219-13T3, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1134).

    Mealey's Insurance - Insurer Had A Duty To Defend Claims Of Faulty Work, Appeals Panel Says

    CHICAGO - A commercial general liability insurer had a duty to defend allegations of defects in design and workmanship in a residential condominium and townhome development, an Illinois appeals panel affirmed May 15, finding that the duty was triggered because some of the allegations potentially fell within the coverage of the insurer's policy (West Bend Mutual Insurance Co. v. Pulte Home Corp., et al., No. 1-14-0355, Ill. App., 1st Dist., 6th Div.; 2015 Ill. App. Unpub. LEXIS 1039).

    Mealey's Insurance - New York Federal Magistrate Judge Denies Motion To Set Aside Arbitration Award

    NEW YORK - A New York federal magistrate judge on May 14 denied a motion to set aside a judgment confirming a $40 million arbitration award on the basis that reinsurers failed to comply with the Federal Arbitration Act's three-month limitation to challenge an arbitration award (Arrowood Indemnity Co. v. Equitas Insurance Limited, et al., No. 13-cv-07680, S.D. N.Y.; 2015 U.S. Dist. LEXIS 63643).

    Mealey's Insurance - Liquidator Asks Court To Allow Payment Of $6.3 Million In Claims

    HARRISBURG, Pa. - The liquidator of an insolvent insurer asked a Pennsylvania court on May 18 to approve the recommended payment of $6.3 million in claims (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).

    Mealey's Insurance - Judge: Pennsylvania's MTBE Case Partially Dismissed; Some Claims Remain Valid

    NEW YORK - The federal judge in New York presiding over litigation regarding groundwater allegedly contaminated by the gasoline additive methyl tertiary butyl ether (MTBE) on May 14 partially granted and partially denied a motion for summary judgment filed by the defendants, concluding that the Commonwealth of Pennsylvania's claim for subrogation was dismissed but that its claim for potential violation of state statutes could not be dismissed at this time (In re: Methyl Tertiary Butyl Ether [MTBE] Products Liability Litigation, MDL 1358, No. 00-1898, Commonwealth of Pennsylvania v. Exxon Mobil Corporation, et al., No. 14 Civ. 6228, S.D. N.Y).

    Mealey's Insurance - Judge Allows Insurer To Proceed With 2 Defenses In Dispute Over Genetic Testing

    SAN JOSE, Calif. - A California federal judge on May 14 granted in part and denied in part an insured's motion to stay an insurer's declaratory judgment lawsuit disputing professional liability coverage for lawsuits, arbitrations and other legal proceedings arising from the insured's service of providing consumers with genetic data from saliva testing (Ironshore Specialty Insurance Co. v. 23andMe, Inc., No. 14-03286, N.D. Calif.; 2015 U.S. Dist. LEXIS 64145).

    Mealey's Insurance - Insureds Fail To Prove Valid Claim Exists For Diminished Value, Federal Judge Says

    MACON, Ga. - The mere possibility that insureds could suffer future injury if their townhouse is damaged in the future is not enough to establish a justiciable controversy regarding coverage for diminished value, a Georgia federal judge said May 14 in denying the insureds' motion for class certification (John Thompson et al. v. State Farm Fire and Casualty Co., No. 14-32, M.D. Ga.; 2015 U.S. Dist. LEXIS 63113).

    Mealey's Insurance - Judge: Insured Is Barred From Relitigating Notice Issue For Faulty Work Claims

    CHICAGO - An insured is precluded from relitigating its right to a defense by its commercial general liability insurer in an underlying faulty workmanship lawsuit, an Illinois federal judge ruled May 15, finding that a previous lawsuit decided that the insured provided untimely notice that prejudiced the insurer (QBE Insurance Corp. v. Barrier Corp., No. 14-9512, N.D. Ill.; 2015 U.S. Dist. LEXIS 63801).

    Mealey's Insurance - Evidence Supports Claim For 'Any Occupation' Disability Benefits, Panel Majority Says

    CINCINNATI - The majority of the Sixth Circuit U.S. Court of Appeals on May 14 determined that a disability insurer arbitrarily and capriciously denied a claim for "any occupation" long-term disability benefits because the insurer disregarded reliable medical evidence in support of the claimant's disability (Samuel Niswonger v. PNC Bank Corp. and Affiliates Long Term Disability Plan, et al., No. 13-4282, 6th Cir.; 2015 U.S. App. LEXIS 8076).

    Mealey's Insurance - Panel: Insured's Notice Delay Of Faulty Work Claim Prejudiced Insurer

    ST. LOUIS - An insurer was prejudiced by an insured's delay in filing its notice of loss with regard to alleged defective workmanship in a roof, the 10th Circuit U.S. Court of Appeals affirmed May 14 (8865 North Cove v. American Family Mutual Insurance Co., No. 14-4086, 10th Cir.; 2015 U.S. App. LEXIS 7938).

    Mealey's Insurance - Judge Orders Insurers, Insured To Arbitrate Pollution Exclusion Dispute

    CHARLOTTE, N.C. - Parties to six umbrella insurance policies and three excess insurance policies must arbitrate their disagreement as to the interpretation of a pollution exclusion to various individual and class actions regarding defective drywall, a North Carolina federal judge ruled May 13 (New NGC Inc. v. ACE American Insurance Co., et al., No. 10-00022, W.D. N.C.; 2015 U.S. Dist. LEXIS 63501).

    Mealey's Insurance - Florida High Court: Statutory Immunity Shields Insurer From Bad Faith Claim

    TALLAHASSEE, Fla. - The Florida Supreme Court on May 14 found that a first-party bad faith cause of action under Section 624.155(1)(b), Florida Statutes, does not fall under the willful tort exception to the immunity granted to a nonprofit insurer by the Florida Legislature, quashing an appellate court's ruling in favor of the insured and answering a certified question in the affirmative in a coverage dispute arising from Hurricane Ivan (Citizens Property Insurance Corp. v. Perdido Sun Condominium Association Inc., etc., No. SC14-185, Fla. Sup.; 2015 Fla. LEXIS 1053).

    Mealey's Insurance - Judge Finds Issues As To Whether Collapse Is Covered Under Insurance Policy

    SYRACUSE, N.Y. - Genuine issues of material fact exist as to whether a collapse falls under a resulting loss exception to an insurance policy's faulty design and workmanship exclusion, a New York federal judge ruled May 13, denying summary judgment to insureds and an insurer (Binghamton-Johnson City Joint Sewage BD, et al. v. American Alternative Insurance Corp., No. 12-0553, N.D. N.Y.; 2015 U.S. Dist. LEXIS 62551).

    Mealey's Insurance - Illinois Panel: Insurer Has No Duty To Defend, Indemnify $8M Fax Ads Settlement

    ELGIN, Ill. - An Illinois appeals panel on May 13 found that an insurer has no duty to defend or indemnify its insured against an $8 million settlement stemming from claims that the insured transmitted unsolicited fax advertisements, once again reversing a lower court in part (G.M. Sign Inc. v. Pennswood Partners Inc., No. 2-12-1276, Ill. App., 2nd Dist.; 2015 Ill. App. LEXIS 356).

    Mealey's Insurance - Federal Judge Transfer Venue Of Insurer's Faulty Work Coverage Lawsuit

    SAN FRANCISCO - A California federal judge on May 12 transferred an insurer's coverage action regarding its duty to defend insureds for their alleged defective construction of a runway for an airport to another California federal court (American Home Assurance Co. v. Tutor-Saliba Corp./O&G Industries Inc., et al., No. 15-00303, N.D. Calif.; 2015 U.S. Dist. LEXIS 62347).

    Mealey's Insurance - Judge Stays Insurer's Coverage Action In Favor Of Underlying Defects Suit

    SAN FRANCISCO - A California federal judge on May 11 stayed an insurer's coverage action against its insureds pending resolution of the underlying construction defects case arising out of the conversion of an apartment building because the case involves similar overlapping issues (Atain Specialty Insurance Co. v. 20 Parkridge LLC, et al., No. 15-00212, N.D. Calif.; 2015 U.S. Dist. LEXIS 62291).

    Mealey's Insurance - 6th Circuit Vacates Ambulance Company's Conviction For Identity Theft

    DETROIT - A Sixth Circuit U.S. Court of Appeals panel on May 13 reversed a jury's finding that the owners of a non-emergency ambulance company committed identity theft when submitting false claims to Medicare, holding that the government did not present sufficient evidence to support the verdict (United States of America v. Kathy Medlock, et al., No. 14-5084/5100, 6th Cir.; 2015 U.S. App. LEXIS 7867).

    Mealey's Insurance - Judge: Implied Covenant Claim Is Duplicative Of Insureds' Bad Faith Claim

    NEWARK, N.J. - A federal judge in New Jersey on May 12 partially dismissed an insurance bad faith lawsuit, ruling that although insureds have properly shown that their insurer owed them a fiduciary duty and breached it, other claims are either duplicative or are not permissible due to the parties' involvement in a valid insurance contract (Adolf Senft, et al. v. Fireman's Fund Insurance Co., et al., No. 14-7805, D. N.J.; 2015 U.S. Dist. LEXIS 61870).

    Mealey's Insurance - New Jersey Panel Remands Counsel Fee Issue In Professional Liability Coverage Suit

    TRENTON, N.J. - A New Jersey appeals panel on May 12 affirmed a lower court's rulings in a coverage dispute over underlying legal malpractice claims but remanded to consider the attorney insured's application for counsel fees and costs (Law Offices of Anthony Carbone v. Chicago Insurance Co., et al., No. A-3384-13T2, N.J. Super., App. Div.; 2015 N.J. Super. Unpub. LEXIS 1080).

    Mealey's Insurance - Judge: Misrepresentations Of Insured Do Not Affect Coverage Of Resident Relative

    EUGENE, Ore. - An insurance company seeking rescission and declaratory relief from a policy issued to a woman cannot preclude coverage to her resident relative based on alleged misrepresentations she made to the company as to when her son moved back into her home, a federal judge in Oregon ruled May 12 in granting in part the son's motion for summary judgment (IDS Property Casualty Insurance Company v. Michelle Mullins, et al., No. 14-cv-01344-MC, D. Ore.; 2015 U.S. Dist. LEXIS 61927).

    Mealey's Insurance - Reinsurer Sues Its Reinsurer For More Than $1 Million In E&O Coverage

    NEW HAVEN, Conn. - A reinsurer that entered into an errors and omissions reinsurance treaty with another reinsurer sued that reinsurer in a federal court in Connecticut on May 12, claiming that the reinsurer owes it more than $1 million (Select Insurance Company v. Excalibur Reinsurance Corporation, f/k/a PMA Capital Insurance Company, No. 15-cv-00715, D. Conn.).

    Mealey's Insurance - Judge: No Evidentiary Basis Warranting Dismissal Of Superstorm Sandy Coverage Suit

    NEWARK, N.J. - A New Jersey federal judge on May 12 denied an insurer's motion to dismiss a Superstorm Sandy coverage dispute, finding that the insurer presented no admissible evidence supporting its contention that the insureds' attorney violated discovery and scheduling orders (Peter Blaso & Demeglio Family v. Alterra Excess & Surplus Insurance Co., No. 14-2574 [WHW-CLW], D. N.J.; 2015 U.S. Dist. LEXIS 61869).

    Mealey's Insurance - Man Sentenced To 48 Months In Prison For Secondhand Drug Scheme

    NEW YORK - A federal judge in New York on May 12 sentenced a man who pleaded guilty to two counts of health care fraud for his role in a scheme involving the sale of secondhand prescription drugs to 48 months in prison and ordered him to pay $2.9 million in restitution (United States of America v. Bladimir Rigo, No. 13 cr. 897, S.D. N.Y.; 2015 U.S. Dist. LEXIS 62239).

    Mealey's Insurance - Judge Allows Reinsurer To Add Reverse Bad Faith Counterclaim Against Insurer

    SYRACUSE, N.Y. - A federal judge in New York on May 11 upheld a magistrate judge's earlier ruling and held that when the magistrate judge allowed a reinsurer to amend its answer and add a counterclaim against its reinsured, the decision was not clearly erroneous (Utica Mutual Insurance Company v. Century Indemnity Company, No. 13-cv-00995, N.D. N.Y.).