LexisNexis® Legal Newsroom
    Mealey's Insurance - Judge Grants Default Judgment To Insurer

    NEW YORK - A New York federal judge on April 22 granted a default judgment to an insurer against its insured and various parties involved in a construction defects lawsuit regarding its duty to defend and indemnify the underlying lawsuit (Atlantic Casualty Insurance Co. v. Rentom Corp., et al., No. 14-8685, S.D. N.Y.; 2016 U.S. Dist. LEXIS 54642).

    Mealey's Insurance - Judge: Pennsylvania Citizen Was Not Fraudulently Joined To Case

    PHILADELPHIA - A federal judge in Pennsylvania on April 21 remanded a suit regarding the alleged overpayment of reinsurance premiums, holding that an employee of a reinsurance broker who is a citizen of Pennsylvania was not fraudulently joined to the suit (Boomerang Recoveries, LLC v. Guy Carpenter & Company LLC, et al., No. 16-cv-00222, E.D. Pa.; 2016 U.S. Dist. LEXIS 53795).

    Mealey's Insurance - Pennsylvania Federal Judge Says Insurer Did Not Act In Bad Faith In Handling Claim

    PHILADELPHIA - A Pennsylvania federal judge on April 25 granted an insurer's motion for partial summary judgment after determining that an insured seeking coverage for water damages failed to prove that the insurer acted in bad faith in investigating and handling her claim (Lisa Whalen v. State Farm Fire and Casualty Co., No. 15-2200, E.D. Pa.; 2016 U.S. Dist. LEXIS 54628).

    Mealey's Insurance - 9th Circuit Reverses Ruling For Insurer In Coverage Dispute Over Embezzled Funds

    SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on April 22 found that a lower court erred in holding that recovery for embezzled client funds under a fidelity bond policy would violate California Insurance Code Section 533, concluding that policy endorsements created a surety relationship that is exempt from Section 533 (Thomas A. Dillon, as court appointed receiver for Vesta Strategies LLC and Excalibur 1031 Group v. Continental Casualty Co., No. 14-15802, 9th Cir.; 2016 U.S. App. LEXIS 7350).

    Mealey's Insurance - Insurance Policy Bars Coverage For Faulty Work, 9th Circuit Upholds

    SAN FRANCISCO - An insurance policy precludes coverage for an insured condominium association's damage caused by faulty workmanship and wind-driven rain, the Ninth Circuit U.S. Court of Appeals affirmed April 20 (Siena Del Lago Condominium Association v. American Fire and Casualty Co. and Mt. Hawley Insurance Co., No. 13-36005, 9th Cir.; 2016 U.S. App. LEXIS 7150).

    Mealey's Insurance - Judge OKs Insolvent Insurer's Recommendation Regarding Insolvency Fund

    CHICAGO - An Illinois judge on April 21 granted the liquidator of an insolvent workers' compensation insurer's recommendation for the allowance of the state's group workers' compensation pool insolvency fund's $716,283.59 claim (In the Matter of the Liquidation of Illinois Restaurant Risk Management Association, Inc., No. 11-CH-40307, Ill. Cir., Cook Co., Chancery Div.).

    Mealey's Insurance - Judge To Insurer, Reinsurer: Show Why Arbitration Award Should Stay Sealed

    NEW YORK - A federal judge in New York on April 21 granted a motion to confirm an asbestos-related arbitration award and ordered an insurer and reinsurer to justify why the award should remain 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.).

    Mealey's Insurance - Panel: Court Erred By Declining To Exercise Jurisdiction In Warehouse Theft Dispute

    ATLANTA - The 11th Circuit U.S. Court of Appeals held April 20 that a federal district court abused its discretion when it declined to exercise jurisdiction without adequately considering the relevant factors in a commercial general liability coverage dispute arising from theft and vandalism at a Miami warehouse (First Mercury Insurance Co. v. Excellent Computing Distributors Inc., et al., No. 15-10120, 11th Cir.; 2016 U.S. App. LEXIS 7111).

    Mealey's Insurance - Loss Of Power Constitutes Single Occurrence, Louisiana Panel Says In Reversal

    NEW ORLEANS - A Louisiana appeals panel found April 20 that the loss of power to a hospital's cooling system following Hurricane Katrina is a single occurrence under a commercial general liability insurance policy and that an insured is responsible for only one retained limit of $50,000, reversing a lower court's ruling that the insured owed a separate retained limit for each claim related to the power outage (David Thebault v. American Home Assurance Company, et al., No. 2015-CA-0800, La. App., 4th Cir.; 2016 La. App. LEXIS 764).

    Panel Affirms Judgment For PHL Variable Insurance In Life Insurance Suit

    DENVER - A 10th Circuit U.S. Court of Appeals panel on April 22 upheld a federal judge in Utah's ruling finding that PHL Variable Insurance Co. was entitled to summary judgment as well as the premiums paid as part of a stranger-originated life insurance (STOLI) policy scheme (PHL Variable Insurance Company v. The Sheldon Hathaway Family Insurance Trust, et al., Nos. 15-4028, 15-4029, 10th Cir.; 2016 U.S. App. LEXIS 7315).

    Mealey's Insurance - Reinsurance Agent Says Court's Dismissal Of Suit Should Stand

    NEW YORK - A reinsurance agent told a federal court in New York on April 21 that the assignee of certain reinsurance receivables has not shown sufficient evidence to justify the court reconsidering its dismissal of the parties' case (NEM Re Receivables LLC v. Fortress Re Inc., No. 15-cv-03875, S.D. N.Y.).

    Mealey's Insurance - Judge Allows Defendants Accused Of Fraudulent Billing To Amend Some Counterclaims

    CAMDEN, N.J. - A federal judge in New Jersey on April 21 granted a motion filed by the Government Employees Insurance Co. (GEICO) to dismiss counterclaims brought by two physicians and their practices that are accused of engaging in a fraudulent billing scheme but allowed the defendants to amend their allegations that the insurer violated state law when withholding payments on the claims they submitted (Government Employees Insurance Company v. Alfred Tawadrous, et al, No. 14-5742, D. N.J.; 2016 U.S. Dist. LEXIS 53210).

    Mealey's Insurance - Insurer Acted In Bad Faith In Handling Of Settlement, Federal Judge Rules

    OKLAHOMA CITY - A federal judge in Oklahoma on April 20 granted in part and denied in part an insurer's motion for judgment on the pleadings in a bad faith lawsuit, ruling that although the plaintiff in the action had properly shown that the insurer acted in bad faith in its handling of a settlement, he cannot bring his bad faith claim regarding the insurer's handling of his claims against the insureds in the action because he is a third-party claimant and not a first-party insured (Michael Kleinsasser v. Progressive Northern Insurance Co., No. 16-102, W.D. Okla.; 2016 U.S. Dist. LEXIS 52072).

    Mealey's Insurance - New York Appellate Court: Insurer Has No Duty To Reimburse Repair Costs

    NEW YORK - An insurer is not obligated to reimburse its insureds for the cost of repairing certain concrete floor slabs, the First Department New York Supreme Court Appellate Division ruled April 21 (St. George Tower and Grill Owners Corp. v. Insurance Company of Greater New York, No. 651746/12, N.Y. Sup., App. Div., 1st Dept.; 2016 N.Y. App. Div. LEXIS 2971).

    Mealey's Insurance - Judge Allows Claims To Proceed In Coverage Dispute Over 'Hole-In-One' Contest

    BECKLEY, W.Va. - A West Virginia federal judge on April 19 allowed breach of contract, negligence and fraud claims to proceed in a dispute over prize indemnity insurance coverage for a "hole-in-one" golf tournament contest, but dismissed the common-law and statutory bad faith claims (Talbot 2002 Underwriting Capital Ltd, et al. v. Old White Charities Inc., No. 15-12542, S.D. W.Va.; 2016 U.S. Dist. LEXIS 52088).

    Mealey's Insurance - No Duty To Defend For Insured's Faulty Solar Panel, Court Affirms

    TROY, Mich. - An insurer has no duty to defend or indemnify a solar power company for underlying allegation of defective installation of solar panels, a Michigan appeals panel ruled April 19, finding that the insurance policy does not provide coverage because only its insured's own work was damaged (Employers Mutual Casualty Co. v. Mid-Michigan Solar, LLC and Nova Consultants, Inc., Nos. 325082 & 326553, Mich. App.; 2016 Mich. App. LEXIS 791).

    Mealey's Insurance - Judge: Underlying Suits Provide No Evidence That Insurers Had A Duty To Defend

    SEATTLE - Summary judgment in an insurance bad faith lawsuit against two general commercial liability insurers is proper because insureds have failed to show that either of the insurers had a duty to defend the insureds in two underlying lawsuits, a federal judge in Washington ruled April 18 (American Management Services East LLC, et al. v. Scottsdale Insurance Co., et al., No. 15-1005, W.D. Wash.; 2016 U.S. Dist. LEXIS 51768).

    Mealey's Insurance - Judge: Misrepresentation Of Home Ownership On Policy Application Was Material

    OXFORD, Miss. - A federal judge in Mississippi on April 19 ruled that a homeowners insurance policy was void because a misrepresentation on the policy application regarding home ownership was material (State Farm Fire & Casualty Insurance Company v. Cedric Flowers, et al., No. 15-cv-99-SA-SAA, N.D. Miss.; 2016 U.S. Dist. LEXIS 52172).

    Mealey's Insurance - Special Deputy Receiver Asks Court To Approve Payment To Reinsured

    AUSTIN, Texas - The special deputy receiver (SDR) of an insurer in receivership asked a Texas court on April 15 to approve the amount that the SDR contends is due to the insurer in receivership's reinsured (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.).

    Mealey's Insurance - Special Deputy Receiver Says Reinsured Objects To Claim Determination

    AUSTIN, Texas - The special deputy receiver (SDR) of an insurer in receivership told a Texas court on April 15 that its reinsured is disputing the allowance of more than $1.5 million for a claim (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.).

    Mealey's Insurance - 1st Circuit: Insurer Owes Defense For Suit Alleging Unfair Business Practices

    BOSTON - The First Circuit U.S. Court of Appeals on April 19 affirmed a lower court's ruling that a professional liability insurer has a duty to defend against an underlying lawsuit alleging that its insured committed unfair business practices in violation of California Business and Professions Code Section 17200 and negligently interfered with prospective economic advantage (Utica Mutual Insurance Co. v. Herbert H. Landy Insurance Agency Inc., et al., No. 15-1220, 1st Cir.; 2016 U.S. App. LEXIS 7041).

    Mealey's Insurance - Insurers In Rehabilitation: Policyholder's Breach Of Contract Claims Are Barred

    PADUCAH, Ky. - After a federal judge in Kentucky denied a pair of insurers in rehabilitation's motion to stay a litigation brought by a policyholder, the insurers answered the complaint on April 14, generally denying the policyholder's allegations (Charles D. Tucker, M.D. v. American Network Insurance Company, et al., No. 16-cv-00013, W.D. Ky.).

    Mealey's Insurance - Federal Judge: Claimant Was 'Stranger' To Relationship Between Insurer, Insured

    PHILADELPHIA - A Pennsylvania federal judge on April 18 dismissed a bad faith lawsuit against a private company directors, officers and employees liability insurer, finding that the insurer had no duty to the plaintiff to settle an underlying discrimination lawsuit he brought against its insured (Steve Leboon v. Zurich American Insurance Co., et al., No. 15-05904, E.D. Pa.; 2016 U.S. Dist. LEXIS 51381).

    Mealey's Insurance - Insured's Faulty Work Triggered Duty To Defend, Federal Judge Concludes

    NEW ORLEANS - Allegations of a subcontractor's defective work in the reconstruction of a high school after Hurricane Katrina raise the possibility of an insurer's duty to defend, a Louisiana federal judge ruled April 15, denying an insurer's motion to dismiss breach of contract and bad faith claims (Gootee Construction, Inc. v. Travelers Property Casualty Company of America, No. 15-3185, E.D. La.; 2016 U.S. Dist. LEXIS 50911).

    Mealey's Insurance - Plaintiff: Reinsurer's Reconsideration Motion On Prepleading Security Must Fail

    NEW HAVEN, Conn. - A reinsurer told a federal court in Connecticut on April 14 that its reinsurer's motion for reconsideration of the court's order that the reinsurer post prepleading security does not meet the standards of reconsideration motions (Select Insurance Company v. Excalibur Reinsurance Corporation, f/k/a PMA Capital Insurance Company, No. 15-cv-00715, D. Conn.).