LAKELAND, Fla. - A Florida appeals panel on May 11 reversed and remanded a lower court's ruling in favor of a homeowners insurer in a sinkhole coverage dispute, noting that the lower court did not have the benefit of three key rulings when it granted the insurer's motion for summary judgment (James Case and Rhonda Case v. Tower Hill Prime Insurance Co., No. 2D15-2225, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 7113).
CHICAGO - An Illinois appeals panel on May 9 affirmed a lower court's ruling that an insurer has no duty to defend or indemnify its pizzeria insured for an underlying $1,818,000 settlement over claims that it violated the Telephone Consumer Protection Act (TCPA) by sending unsolicited fax ads to 3,636 recipients (Mortesa "Marty" Fayezi, et al. v. Illinois Casualty Co., No. 1-15-0873, Ill. App., 1st Dist., 1st Div.; 2016 Ill. App. Unpub. LEXIS 898).
SAN FRANCISCO - A California federal judge on May 9 determined that insurers must post a bond of $1.5 million, plus prejudgment interest, in a coverage dispute with Chapter 11 debtor The Flintkote Co. (The Flintkote Company v. Aviva PLC, No. 15-cv-01638, N.D. Calif.; 2016 U.S. Dist. LEXIS 61366).
TAMPA, Fla. - A federal bankruptcy judge in Florida on May 6 denied a group of investors' motions to dismiss a suit brought by the bankruptcy trustee of an insolvent insurer alleging a fraudulent $33.4 million stock transfer (Soneet R. Kapila, as Chapter 11 Trustee of Universal Health Care Group, Inc. v. Warburg Pincus, LLC, et al., No. 8:15-ap-132-KRM, M.D. Fla. Bkcy.; 2016 Bankr. LEXIS 1957).
NEW YORK - A federal judge in New York on May 9 granted a reinsurer's and its reinsured's joint motion to keep an asbestos-related arbitration award under seal (Continental Insurance Company v. Fairmont Premier Insurance Company f/k/a Transamerica Premier Insurance Company, No. 16-cv-00655, S.D. N.Y.).
PORTLAND, Ore. - An Oregon federal magistrate judge on May 6 determined that the proper allocation method for calculating insureds' defense costs is a pro rata by time on the risk method and said that the insurers are required to pay their portion of the defense costs owed to the insureds for underlying environmental contamination claims within 30 days (Century Indemnity Co. v. The Marine Group LLC, et al., No. 08-1375, D. Ore.; 2016 U.S. Dist. LEXIS 60339).
JACKSON, Miss. - An insured's expert fails to present supporting documentation that an appraisal award for destroyed contents in a warehouse fire was "grossly inadequate or excessive as to amount to a fraud in effect," a Mississippi federal judge ruled May 6, excluding the testimony and granting summary judgment to an insurer (Michael McElroy Sr., et al. v. Evanston Insurance Co., No. 14-180, S.D. Miss.; 2016 U.S. Dist. LEXIS 60501).
PHILADELPHIA - A Pennsylvania federal judge on May 5 granted judgment in favor of an insurer in a water damage suit after determining that the insurer's denial of coverage was reasonable based on the clear language of the policy's maintenance exclusion (David Dougherty v. Allstate Property and Casualty Insurance Co., No. 14-7270, E.D. Pa.; 2016 U.S. Dist. LEXIS 59667).
HOUSTON - A Texas federal judge on May 5 said an insurer is required only to pay the full amount of a sublimit for all of the crew members injured when an insured ship exploded and caused an oil spill in the Gulf of Mexico rather than separate sublimits for each of the four crew members injured in the explosion (United Specialty Insurance Co. v. Porto Castelo Inc. et al., No. 15-1036, S.D. Texas; 2016 U.S. Dist. LEXIS 59715).
LINCOLN, Neb. - Replacing drywall and insulation as a result of a subcontractor's faulty fire suppression system did not constitute an "accident" under an insurance policy, a Nebraska federal judge ruled May 9, finding that the damage to the drywall and insulation was a purposeful act, necessary to remove the faulty system and install a proper fire suppression system (McShane Construction Company, LLC v. Gotham Insurance Co., No. 14-419, D. Neb.; 2016 U.S. Dist. LEXIS 61103).
DETROIT - A Michigan federal judge held May 9 that an underlying false advertising claim against a manufacturer insured does not constitute a personal and advertising injury under business and umbrella liability insurance policies, granting the insurer's motion for summary judgment in a breach of contract dispute (Vitamin Health, Inc. v. Hartford Casualty Insurance Co., No. 15-10071, E.D. Mich., Southern Div.; 2016 U.S. Dist. LEXIS 60858).
ALBANY, N.Y. - The New York Court of Appeals on May 5 determined that an anti-subrogation rule does not apply to bar the insurers' right to subrogation in a coverage dispute arising out of underlying lead paint claims because the party from which it seeks subrogation is not an insured, a requirement under the anti-subrogation rule (Millennium Holdings LLC, et al. v. The Glidden Co., n/k/a Akzo Nobel Paints LLC, No. 38, N.Y. App.; 2016 N.Y. LEXIS 1060).
DALLAS - Summary judgment in an insurance coverage dispute is proper because insureds have failed to provide sufficient evidence showing that a genuine issue of material fact exists that would show they were entitled to coverage under a commercial property insurance policy, a federal judge in Texas ruled May 6 (Seneca Insurance Co. Inc. v. Hamilton Properties Inc., et al., No. 15-0829, N.D. Texas; 2016 U.S. Dist. LEXIS 60275).
PHOENIX - Because the release of sewer gases caused by the improper installation of a plumbing system is not traditional environmental pollution, a policy's pollution exclusion does not bar coverage for an underlying suit arising out of the release of gases into a shopping center; however, a question of fact exists regarding whether the insurer had a duty to contribute to the settlement of the underlying suit, an Arizona federal judge held May 6, denying reconsideration (National Fire Insurance Company of Hartford, et al. v. James River Insurance Co., et al., No. 14-765, D. Ariz.; 2016 U.S. Dist. LEXIS 60445).
CHICAGO - A commercial general liability insurer had no duty to defend or indemnify an additional insured in an underlying construction defect case, an Illinois appeals panel held May 4, affirming summary judgment to the insurer (Westfield Insurance Co. v. West Van Buren, LLC and 933 Van Buren Condominium Association, No. 1-14-0862, Ill. App., 1st Dist., 3rd Div.; 2016 Ill. App. Unpub. LEXIS 873).
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on May 4 affirmed a Kentucky federal judge's finding that a disability insurer did not act arbitrarily or capriciously in terminating a claimant's benefits based on the policy's 24-month mental illness limitation (Yulunda Karen McAlister v. Liberty Life Assurance Company of Boston, No. 15-5801, 6th Cir.; 2016 U.S. App. LEXIS 8374).
WASHINGTON, D.C. - A federal judge on May 5 entered a final partial judgment regarding just compensation due to property owners one day after certifying one class as to liability and two subclasses as to just compensation in their lawsuit alleging that the U.S. government unconstitutionally took their property through flooding resulting from the Army Corps of Engineers' creation, construction, operation and failure to maintain the Mississippi River Gulf Outlet (MR-GO) (St. Bernard Parish Government v. The United States, No. 05-1119, Fed. Clms.; 2016 U.S. Claims LEXIS 424).
AUSTIN, Texas - A Texas judge on May 3 granted the special deputy receiver (SDR) of an insurer in receivership's application to disallow a claim brought by a homeowner for damages allegedly already paid by the insurer before it was placed into rehabilitation (The State of Texas and the Texas Department of Insurance v. Vesta Fire Insurance Corporation, et al., No. D-1-GN-002366, Texas Dist., Travis Co.).
HARRISBURG, Pa. - Intervenors in a rehabilitation proceeding of two related insurers on May 3 asked a Pennsylvania court to allow them to recover more than $150,000 in fees, costs and expenses incurred in the first quarter of 2016 (In Re: Penn Treaty Network America Insurance Company in Rehabilitation and In re: American Network Insurance Company in Rehabilitation, Nos. 1 PEN 2009 & 1 ANI 2009, Pa. Cmwlth.).
NEWARK, N.J. - A retrocessional reinsurer notified a federal court in New Jersey on May 4 that it was dropping its dispute over approximately $9 million in retrocessional reinsurance premiums (National Indemnity Company v. Companhia Siderurgica Nacional S.A., et al., No. 15-cv-00752, D. N.J.).
ELIZABETH CITY, N.C. - A North Carolina federal judge on May 3 held that an insurer committed breach of contract and acted in bad faith when it denied its insureds' Hurricane Irene claim, awarding the insureds $233,398 for their breach of contract claim and treble damages for their unfair and deceptive trade practices claim for a $700,194 total judgment against the insurer (Gary Woodson, et al. v. Allstate Insurance Co., No. 13-21, E.D. N.C.; 2016 U.S. Dist. LEXIS 59461).
FRESNO, Calif. - Remand of an insurance breach of contract and bad faith lawsuit to state court is not proper because an insurer has shown that the amount in controversy exceeds the statutory limit, a federal judge in California ruled May 3 (See Lee, et al. v. State Farm Mutual Automobile Insurance Co., No. 16-0465, E.D. Calif.; 2016 U.S. Dist. LEXIS 58933).
BROOKLYN, N.Y. - A New York Supreme Court Appellate Division panel on May 4 reversed a trial court judge's ruling awarding summary judgment to Progressive Advanced Insurance Co. in a suit in which the insurer seeks a declaration that it is not obligated to pay certain no-fault claims, ruling that uncertified police reports relied on by the insurer were inadmissible (Progressive Advanced Insurance Co. v. Gwendolyn McAdam, et al., No. 2014-08058, N.Y. Sup., App. Div., 2nd Dept.; 2016 N.Y. App. LEXIS 3350).
ELGIN, Ill. - An Illinois appeals panel on May 2 found that insurers properly received regulatory approval for use of the "Violation of Statutes" exclusion in all of their policies, affirming a lower court's ruling in favor of the insurers in a coverage dispute over unsolicited fax advertisements (Ce Design Ltd., et al. v. Valley Forge Insurance Co., et al., No. 2-15-0530, Ill. App., 2nd Dist.; 2016 Ill. App. Unpub. LEXIS 853).
MONTGOMERY, Ala. - Summary judgment in an insurance breach of contract lawsuit is proper, a federal judge in Alabama ruled May 2, because an insured failed to submit affidavits in support of its claim within the statutorily required timeframe (Barbara Brown v. Allstate Property and Casualty Insurance Co., No. 15-488, M.D. Ala.; 2016 U.S. Dist. LEXIS 57886).