LexisNexis® Legal Newsroom
Mealey's Insurance - No Evidence Offered To Support Breach Of Contract, Bad Faith Claims, Federal Judge Says

SHERMAN, Texas - Because insureds failed to offer evidence supporting their claims for breach of contract and bad faith arising out of an insurer's denial of coverage for a water damage claim, a Texas federal judge on Nov. 29 granted the insurer's motion for summary judgment (Jon and Leslie Young v. Allstate Vehicle and Property Insurance Co., No. 17-87, E.D. Texas, 2017 U.S. Dist. LEXIS 196094).

Mealey's Insurance - No Homeowners Coverage Owed For Flood Damage, Federal Judge Says

HOUSTON - A Texas federal judge on Nov. 27 granted a homeowners insurer's motion for partial summary judgment in an insured's breach of contract lawsuit seeking coverage for flood damage caused by a May 2015 storm in Houston, finding that the policy excluded flood damage from coverage (Ali Ekhlassi v. National Lloyds Insurance Co., et al., No. 17-1257, S.D. Texas, 2017 U.S. Dist. LEXIS 194467).

Mealey's Insurance - Magistrate Judge Recommends Denial Of Reinsurance Claims In 9/11 Insurance Dispute

NEW YORK - In a dispute over claims stemming from the attacks on Sept. 11, 2001, a New York federal magistrate judge on Nov. 27 recommended that insurers be awarded $221.5 million but that their claims arising out of reinsurance contracts be denied (In re: Terrorist Attacks on September 11, 2001, No. 03-MDL-1570, Continental Casualty Co. v. Al Qaeda Islamic Army, No. 04-5970, S.D. N.Y., 2017 U.S. Dist. LEXIS 196192).

Mealey's Insurance - Panel: No Indemnity Obligation Owed To Target In Relation To Personal Injury Suit

CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Nov. 29 held that an indemnification arrangement involving Target Corp. and hamper suppliers is not an "insured contract" pursuant to an insurance policy issued to one of the suppliers, affirming a lower court's grant of summary judgment in favor of the insurer in a coverage dispute over an alleged eye injury caused by a pop-up laundry hamper that was purchased at Target in 2010 (Northern Insurance Company of New York v. Target Corporation, et al., No. 16-2222, 6th Cir., 2017 U.S. App. LEXIS 24156).

Mealey's Insurance - Panel Revives Contract Claim Against Broker For Failing To Notify Of Liquidation

ALBANY, N.Y. - An insured adequately asserted a third-party breach of contract claim against an insurance broker based on the broker's failure to learn of an insurer's liquidation proceeding, a New York appeals panel ruled Nov. 22, finding that a trial justice erred in dismissing this claim (Mary Jean Muncil v. Widmir Inn Restaurant Corp. v. Carter-MGM Insurance Agency LLC, et al., No. 524856, N.Y. Sup., App. Div., 3rd Dept., 2017 N.Y. App. Div. LEXIS 8276).

Mealey's Insurance - Nebraska Law Preempts Reinsurance Participation Agreement Clause, Panel Says

LOS ANGELES - Nebraska Uniform Arbitration Act (NUAA) Section 25-2602.01(f) applies to a reinsurance participation agreement (RPA) and renders an arbitration provision unenforceable, a California appeals panel held Nov. 22, finding that a trial judge did not err in refusing to compel arbitration in a breach of contract dispute (Citizens of Humanity, et al. v. Applied Underwriters Inc., et al., No. B276601, Calif. App., 2nd Dist., Div. 2, 2017 Cal. App. LEXIS 1038).

Mealey's Insurance - Bad Faith Claim Cannot Be Adjudicated Until After Contract Claim Is Resolved

FORT MYERS, Fla. - A bad faith claim stemming from an auto insurance dispute must be dismissed because the claim cannot be adjudicated until after the breach of contract claim is resolved, a Florida federal judge said Nov. 27 in granting the insurer's motion to dismiss (James Robert Wadsworth, et al. v. State Farm Mutual Automobile Insurance Co., No. 17-502, M.D. Fla., 2017 U.S. Dist. LEXIS 194254).

Mealey's Litigation Procedure - 4th Circuit Affirms Dismissal Of Securities Suit For Failure To Plead Scienter

RICHMOND, Va. - Shareholders in a securities class action lawsuit against an energy provider and its CEO have failed to show that the CEO acted with the requisite scienter in misrepresenting to investors that the company had secured a contract renewal with a large customer because they have not shown that he knew his statements were misleading at the time he made them, a Fourth Circuit U.S. Court of Appeals panel ruled Nov. 15 in affirming a federal judge's dismissal of the action (Maguire Financial LP, et al. v. PowerSecure International Inc., et al., No. 16-2163, 4th Cir., 2017 U.S. App. LEXIS 22968).

Mealey's Litigation Procedure - 9th Circuit: Workweek Average To Reach Pay Rate Doesn't Violate FLSA

SEATTLE - An employer's use of a workweek average to arrive at the appropriate pay rate for employees doesn't violate the Fair Labor Standards Act (FLSA) as it provides employees with wages that meet the minimum wage, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 15, noting that whether the employees have a contract claim is beyond the scope of the interlocutory appeal (Kristy Douglas, et al. v. Xerox Business Services, LLC, et al., No. 16-35425, 9th Cir., 2017 U.S. App. LEXIS 22967).

Mealey's Labor & Employment - 9th Circuit: Workweek Average To Reach Pay Rate Doesn't Violate FLSA

SEATTLE - An employer's use of a workweek average to arrive at the appropriate pay rate for employees doesn't violate the Fair Labor Standards Act (FLSA) as it provides employees with wages that meet the minimum wage, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 15, noting that whether the employees have a contract claim is beyond the scope of the interlocutory appeal (Kristy Douglas, et al. v. Xerox Business Services, LLC, et al., No. 16-35425, 9th Cir., 2017 U.S. App. LEXIS 22967).

Mealey's Securities/D&O Liability - 4th Circuit Affirms Dismissal Of Securities Suit For Failure To Plead Scienter

RICHMOND, Va. - Shareholders in a securities class action lawsuit against an energy provider and its CEO have failed to show that the CEO acted with the requisite scienter in misrepresenting to investors that the company had secured a contract renewal with a large customer because they have not shown that he knew his statements were misleading at the time he made them, a Fourth Circuit U.S. Court of Appeals panel ruled Nov. 15 in affirming a federal judge's dismissal of the action (Maguire Financial LP, et al. v. PowerSecure International Inc., et al., No. 16-2163, 4th Cir., 2017 U.S. App. LEXIS 22968).

Mealey's Insurance - Judge Dismisses Breach Of Contract Claim In Coverage Dispute Over Mortgage Fraud

SEATTLE - A Washington federal judge on Nov. 13 dismissed a breach of contract claim brought by the Federal Deposit Insurance Corp. against fourth-level excess insurers in a coverage dispute arising from fraudulent mortgage loans, finding that third-level excess insurance has not been exhausted (Federal Deposit Insurance Corp. v. Arch Insurance Company, et al., No.14-0545, W.D. Wash., 2017 U.S. Dist. LEXIS 187224).

Mealey's IP/Tech - 4th Circuit Affirms: Computer Fraud Claims Preempted By Copyright Act

RICHMOND, Va. - Allegations that the creator of a cloud computing environment committed computer fraud when it copied and transferred data to former employees of a company it once contracted with are preempted by the Copyright Act, the Fourth Circuit U.S. Court of Appeals ruled Nov. 13 (OpenRisk LLC v. MicroStrategy Services Corp., No. 16-1852, 4th Cir., 2017 U.S. App. LEXIS 22736).

Mealey's Litigation Procedure - Texas Panel Vacates Discovery Order, Says Documents Not Relevant To Contract Claim

TYLER, Texas - The 12th District Texas Court of Appeals on Nov. 8 determined that a trial court erred in granting an insured's motion to compel because the documents sought by the insured are not relevant to the contract claim and will not be relevant unless and until the extracontractual claims are tried (In re: Allstate Fire & Casualty Insurance Co., No. 12-17-00266, Texas App., 12th Dist., 2017 Tex. App. LEXIS 10428).

Mealey's Insurance - Texas Panel Vacates Discovery Order, Says Documents Not Relevant To Contract Claim

TYLER, Texas - The 12th District Texas Court of Appeals on Nov. 8 determined that a trial court erred in granting an insured's motion to compel because the documents sought by the insured are not relevant to the contract claim and will not be relevant unless and until the extracontractual claims are tried (In re: Allstate Fire & Casualty Insurance Co., No. 12-17-00266, Texas App., 12th Dist., 2017 Tex. App. LEXIS 10428).

Mealey's PI/Product Liability - Wyo. Supreme Court Orders Partial Summary Judgment In Medical Malpractice Suit

CHEYENNE, Wyo. - The Wyoming Supreme Court on Nov. 9 ordered that a medical malpractice suit be remanded to a trial court and that partial summary judgment be ordered in favor of a hospital after finding that the hospital did not waive its immunity by purchasing insurance because the insurance did not cover a doctor who was contracted to work for the hospital (Memorial Hospital of Sweetwater County v. Darrell Menapace, No. S-17-0055, Wyo. Sup., 2017 Wyo. LEXIS 137).

Mealey's Litigation Procedure - Judge Extends Discovery In Fracking Contract Dispute, Approves Inspections

PITTSBURGH - A federal judge in Pennsylvania on Nov. 7 extended the deadline for discovery in a hydraulic fracturing contract dispute following a previous ruling in which the judge denied a motion for protective order and a motion to quash that had been filed by a fracking company that sought to prevent inspection of fracking rigs at issue in the litigation (Orion Drilling Company LLC v. EQT Production Company, No. 16-01516, W.D. Pa.).

Mealey's Insurance - Federal Judge: Flood Did Not Become Excluded Peril Once Sublimits Were Exhausted

SHERMAN, Texas - A Texas federal judge on Nov. 9 granted insureds' motion for partial summary judgment in their breach of contract and bad faith lawsuit arising from storm damage, finding that the insurer remains liable for any damages caused by pure wind and the combination of wind and flood if such damages are proven by the insureds (Hidden Cove Park and Marina, et al. v. Lexington Insurance Co., et al., No. 17-00193, E.D. Texas, 2017 U.S. Dist. LEXIS 186191).

Mealey's Insurance - Texas Panel: Insurer Was Properly Granted Judgment On Bad Faith Claims

SAN ANTONIO - The Fourth District Texas Court of Appeals on Nov. 8 affirmed a trial court's grant of summary judgment to an insurer on the insured's common-law bad faith claim after determining that the insured failed to offer evidence of an extreme act that caused an injury that was independent of the insured's breach of contract claim (Oscar Ortiz v. State Farm Lloyds, No. 04-17-00252, Texas App., 4th Dist., 2017 Tex. App. LEXIS 10395).

Mealey's Insurance - New York Federal Judge Allows Breach Of Contract Claims To Stand Against Insurer

UTICA, N.Y. - A New York federal judge on Nov. 7 granted an insurer's motion to dismiss eight claims alleged by an insured seeking coverage for water and mold damages after determining that the insured plausibly alleged that the insurer breached its contract but failed to prove that the insurer's conduct amounted to any tortious behavior (Edmund G. Sanderson v. First Liberty Insurance Corp., No. 16-644, N.D. N.Y., 2017 U.S. Dist. LEXIS 184468).

Mealey's Litigation Procedure - U.K. Wafer Maker Says ICC Has Awarded It $39M For Breach Of Contract

ABINGDON, Oxfordshire - A United Kingdom maker of photovoltaic (PV) silicon wafers on Nov. 8 announced that the International Court of Arbitration for the International Chamber of Commerce (ICC) has awarded it $39,436,143.11 for breach of a contract in which a customer agreed to purchase wafers over a seven-year period.

Mealey's Insurance - Financial Services Company Says It Has Right To Recover $26M Award From Reinsurers

WASHINGTON, D.C. - In a breach of contract lawsuit, a financial services company argues in a Nov. 3 opposition brief to the District of Columbia federal court that it has a right to recover a $26 million arbitration award directly from reinsurers (Vantage Commodities Financial Services I, LLC v. Assured Risk Transfer PCC, LCC, et al., No. 17-01451, D. D.C.).

Mealey's Labor & Employment - Preliminary Injunction And Stay Granted In BIC Exemption Suit

ST. PAUL, Minn. - A Minnesota federal judge on Nov. 3 granted a plaintiff's motion for preliminary injunction and the U.S. Department of Labor's (DOL) motion to stay in a lawsuit over the DOL's new "best interest contract" prohibited exemption (BIC exemption) (Thrivent Financial for Lutherans v. R. Alexander Acosta, et al., No. 0:16-cv-03289, D. Minn., 2017 U.S. Dist. LEXIS 182657).

Mealey's Litigation Procedure - Fired Temp Teachers Permitted To Proceed With Speech, Contract Breach Claims

DENVER - A 10th Circuit U.S. Court of Appeals panel on Nov. 6 partially reinstated claims by three terminated temporary teachers, opining that they may proceed with a contract breach claim related to a collective bargaining agreement's (CBA) evaluation provision and a claim that one of the teachers was retaliated against due to her speech regarding a bond issue (Kena Utter, et al. v. Amie Rose Colclazier, et al., No. 17-7002, 10th Cir., 2017 U.S. App. LEXIS 22116).

Mealey's Insurance - Judge Allows Insured To Amend Petition To Properly Assert Insurer's Citizenship

BATON ROUGE, La. - A Louisiana federal magistrate judge on Nov. 2 allowed an insured to amend her complaint to adequately allege a flood insurer's citizenship in her breach of contract lawsuit arising from flood damage (Sarah Faye Carrier v. Lexington Insurance Co., No. 17-1543, M.D. La., 2017 U.S. Dist. LEXIS 182386).