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