TYLER, Texas - A federal judge in Texas on April 14 sentenced a doctor found guilty of conspiracy to commit health care fraud, seven counts of health care fraud and seven counts of aggravated identity theft to 135 months in prison and ordered him to pay $599,128.02 in restitution (United States of America v. Tariq Mahmood, No. 13-cr-00032, E.D. Texas).
OKLAHOMA CITY - A federal judge in Oklahoma on April 14 remanded an insurance bad faith lawsuit to state court, ruling that an insurance agent was not fraudulently joined in the action (Eileen Caballero v. Safeco Insurance Company of America Inc., et al., No. 14-1336, W.D. Okla.; 2015 U.S. Dist. LEXIS 48735).
SAN JOSE, Calif. - A contractor cannot allege that its judgment against a subcontractor for faulty work exceeds $2 million, thereby triggering an excess insurer's duty to defend, a California federal judge ruled April 14, granting dismissal of breach of contract and bad faith claims against the excess insurer (Nordby Construction Inc. v. American Safety Indemnity Co., et al., No. 14-04074, N.D. Calif.; 2015 U.S. Dist. LEXIS 49048).
BALTIMORE - A Maryland federal judge on April 13 denied dueling summary judgment motions in a coverage dispute between a real estate developer and its architect's professional liability insurer, finding that fact issues preclude summary judgment rulings (McDowell Building LLC v. Zurich American Insurance Co., No. 12-2876, D. Md.; 2015 U.S. Dist. LEXIS 47904).
NEW YORK - A New York federal judge on April 14 adopted a federal magistrate's recommendation that an insurer pay its insureds almost $9 million for attorney fees incurred as a result of the insurer's breach of its duty to defend the insureds against underlying asbestos and silica claims (Danaher Corp. v. Travelers Indemnity Co., et al., No. 10-0121, S.D. N.Y.; 2015 U.S. Dist. LEXIS 48769).
TRENTON, N.J. - A federal magistrate judge in New Jersey on April 14 granted an insurance company's motion for substituted service on a defendant in an insurance fraud suit, finding that the company has actively attempted to locate the defendant's address (Government Employees Insurance Company v. Scott Greenberg, et al., No. 14-2904, D. N.J.; 2015 U.S. Dist. LEXIS 48573).
KNOXVILLE, Tenn. - A federal judge in Tennessee on April 14 ruled that a jury will be instructed that a couple defending against claims from their insurance company that they intentionally set a fire in September 2010 to destroy their home can obtain common-law punitive damages only on their counterclaims for breach of contract, treble damages for their counterclaim under the Tennessee Consumer Protection Act (TCPA) and a bad faith penalty under Tennessee insurance law if their claim accrued before April 2011 (American National Property & Casualty Company v. Carol Ann Stutte, et al., No. 11-CV-219, E.D. Tenn.; 2015 U.S. Dist. LEXIS 48726).
DENVER - The 10th Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court's ruling in favor of a directors and officers liability insurer after the Colorado Supreme Court, in answering two certified questions, held that the notice-prejudice rule does not apply to the date-certain notice requirement of claims-made insurance policies (Dean Craft v. Philadelphia Indemnity Insurance Co., No. 13-1209, 10th Cir.; 2015 U.S. App. LEXIS 6032).
OKLAHOMA CITY - A federal judge in Oklahoma on April 13 remanded an insurance bad faith lawsuit to state court, ruling that no evidence exists to show that insureds cannot prove any facts that would entitle them to relief (Philip Mayer, et al. v. Horace Mann Insurance Co., et al., No. 14-1381, W.D. Okla.; 2015 U.S. Dist. LEXIS 47850).
LAKELAND, Fla. - A Florida appeals panel on April 10 granted a petition for writ of certiorari by Florida Insurance Guaranty Association (FIGA) and quashed a lower court's order granting insureds' motion for partial summary judgment regarding liability and damages associated with subsurface repair costs in a sinkhole damage coverage dispute (Florida Insurance Guaranty Association v. Chad Murphy & Lorraine Murphy, No. 2D13-5609, Fla. App., 2nd Dist.; 2015 Fla. App. LEXIS 5256).
MINNEAPOLIS - A Minnesota federal jury on April 10 entered a verdict in favor of a mattress maker for more than $400,000 after determining that coverage is owed for an underlying action filed against the insured in which consumers alleged that mattresses developed mold (Select Comfort Corp. v. Arrowood Indemnity Co., et al., No. 13-2975, D. Minn.).
RENO, Nev. - A commercial general liability insurer had no duty to defend insureds against negligence, negligent misrepresentation, intentional misrepresentation and trespass claims regarding improper construction work and dumping, a Nevada federal judge ruled April 13, also dismissing the insureds' bad faith counterclaim (Benchmark Insurance Co. v. G.L. Construction Co., et al., No. 14-00326, D. Nev.; 2015 U.S. Dist. LEXIS 48322).
OMAHA, Neb. - The Nebraska Supreme Court on April 10 affirmed a lower court decision to stay a reinsurance arbitration proceeding while the lower court decides on who is the proper arbitrator of the dispute, holding that the lower court's decision is not a final decision and therefore not appealable (Shasta Linen Supply, Inc. v. Applied Underwriters, Inc., et al., No. S-14-270, Neb. Sup.; 2015 Neb. LEXIS 72).
ALEXANDRIA, Va. - A Virginia federal judge on April 9 dismissed a lawsuit seeking coverage for damages arising out of contaminated oil because the parties reached a settlement and the insured did not object to the dismissal of the suit (FCC Environmental LLC v. AIG Specialty Insurance Co., No. 14-1316, E.D. Va.).
PHOENIX - An Arizona federal judge on April 9 found that coverage turns on discovery within the policy period of a loss to real property for which an insured negligently failed to obtain insurance, not on when the loss was reported to the insurer, denying the insurer's motion to dismiss a breach of contract, bad faith and negligence lawsuit (11333 Inc. v. Certain Underwriters at Lloyd's, London, et al., No. 14-02001, D. Ariz.; 2015 U.S. Dist. LEXIS 46498).
LOS ANGELES - A California appeals panel on April 10 affirmed a lower court's ruling that a professional liability insurance policy's application exclusion precludes coverage for claims made against a securities broker-dealer insured involving an alleged real estate investment Ponzi scheme, finding that three undisclosed claims should have been disclosed to the insurer during the application process because they arose out of the same events as the one disclosed claim (Crown Capital Securities L.P. v. Endurance American Specialty Insurance, No. B256241, Calif. App., 2nd Dist., Div. 5.; 2015 Cal. App. LEXIS 305).
SYRACUSE, N.Y. - A reinsurer told a federal court in New York on April 9 that the information at issue in its reinsured's motion for reconsideration of a discovery order is needed to understand the reinsured's financial interest in the underlying dispute (Utica Mutual Insurance Company v. Century Indemnity Company, No. 13-cv-00995, N.D. N.Y.).
WASHINGTON, D.C. - Two cardiovascular disease testing companies agreed to pay a combined $48.5 million to resolve claims brought by three whistle-blowers that the companies paid physicians illegal kickbacks and billed Medicare for unnecessary medical testing for patients, the U.S. Department of Justice announced April 9.
JEFFERSON CITY, Mo. - A judge properly enjoined portions of a Missouri law governing the conduct of advisers employed to help people navigate the Patient Protection and Affordable Care Act (ACA) exchange, an Eighth Circuit U.S. Court of Appeals panel held April 10 in partially affirming (St. Louis Effort for Aids, et al. v. John Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration, No. 14-1520, 8th Cir.).
NEW YORK - A New York appeals panel on April 7 found that a lawyers professional liability insurance policy's "insured's status" and "business enterprise" exclusions bar coverage for certain transactions between the attorney insureds and their client because the transactions were hybrid malpractice claims that arose from the legal services that the attorneys provided her but also from one attorney's status or activity for his company (Lee & Amtzis LLP, et al. v. American Guarantee and Liability Insurance Co., et al., No. 653050/11, 13711, N.Y. Sup., App. Div.; 1st Dept.; 2015 N.Y. App. Div. LEXIS 2880).
CLEVELAND - An Ohio federal judge on April 7 determined that an insurer must pay the per-occurrence limits in its policy because the underlying asbestos suits filed against its insured arose out of multiple occurrence rather than a single occurrence (Westfield Insurance Co. et al. v. Continental Insurance Co. et al., No. 13-2367, N.D. Ohio; 2015 U.S. Dist. LEXIS 45437).
ST. LOUIS - An Eighth Circuit U.S. Court of Appeals panel on April 9 found no errors in a federal judge in Minnesota's ruling allowing PHL Variable Insurance Co. to rescind a $10 million life insurance policy based on gross misrepresentations about the financial status of the applicant (PHL Variable Insurance v. 2008 Christa Joseph Revocable Trust, et al., No. 13-3255, 8th Cir.; 2015 U.S. App. LEXIS 5724).
BOSTON - The First Circuit U.S. Court of Appeals on April 8 affirmed a district court's ruling that a disability claimant's complaint fails to state a claim upon which relief may be granted because the claimant failed to prove that she had a period of seven consecutive days of disability during her employment pursuant to the policy's terms (Michele Clark v. Janssen Pharmaceuticals Inc. et al., No. No. 14-1701, 1st Cir.; 2015 U.S. App. LEXIS 5739).
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on April 7 affirmed a lower federal court's ruling that excluded the insureds' expert witness during phase one of a bifurcated trial, as well as its decision not to issue two jury instructions in a dispute over whether wind or landslides were the primary cause of the insureds' property damage during a May 2010 storm (Jerome S. Tannenbaum, et al. v. Federal Insurance Co., No. 13-6576, 6th Cir.).
SAN FRANCISCO - Dismissal of a defendant in a breach of contract and insurance bad faith lawsuit is proper because an insured had failed to show that an insurer was not a party to the insurance contract, a California federal judge ruled April 7 (Eric Wright v. Allstate Insurance Company of California, et al., No. 15-1020, N.D. Calif.; 2015 U.S. Dist. LEXIS 45529).