LexisNexis® Legal Newsroom
Mealey's Insurance - Insurer Owed No Duty To Defend Insured, Judge Rules In Bad Faith Suit

TAMPA, Fla. - An insurer had no duty to defend or indemnify its insured in a false advertising lawsuit because the insured failed to tender the complaint to the insurer as required, a federal judge in Florida ruled May 26 in granting the insurer's motion for partial summary judgment in an insurance bad faith and breach of contract lawsuit (Scott, Blane and Darren Recovery LLC, et al. v. Auto-Owners Insurance Co., No. 15-153, M.D. Fla., 2017 U.S. Dist. LEXIS 81042).

Mealey's Antitrust/Unfair Competition - $51.15M Condo-Hotel Sales Disclosure Settlement Is Preliminarily Approved

SAN DIEGO - A California federal judge on May 24 granted preliminary approval of a $51,150,000 settlement to be paid the developers of a condominium-hotel project in San Diego for allegedly failing to disclose the buyers' right to rescind their purchase contracts in violation of the Interstate Land Sales Full Disclosure Act (ILSA), California's Subdivided Lands Act (SLA) and California's unfair competition Law (UCL) (Dean Beaver, et al. v. Tarsadia Hotels, a California Corporation, et al., No. 11-1842, S.D. Calif., 2017 U.S. Dist. LEXIS 80648).

Mealey's Litigation Procedure - $51.15M Condo-Hotel Sales Disclosure Settlement Is Preliminarily Approved

SAN DIEGO - A California federal judge on May 24 granted preliminary approval of a $51,150,000 settlement to be paid the developers of a condominium-hotel project in San Diego for allegedly failing to disclose the buyers' right to rescind their purchase contracts in violation of the Interstate Land Sales Full Disclosure Act (ILSA), California's Subdivided Lands Act (SLA) and California's unfair competition Law (UCL) (Dean Beaver, et al. v. Tarsadia Hotels, a California Corporation, et al., No. 11-1842, S.D. Calif., 2017 U.S. Dist. LEXIS 80648).

Mealey's Insurance - Judge: Issues Must Be Resolved In Bad Faith Suit Before Judgment Can Be Issued

OXFORD, Miss. - Summary judgment in an insurance breach of contract and bad faith lawsuit is not proper because an insured has stated material issues of genuine fact that must be determined before any judgment may be issued in the action, a federal judge in Mississippi ruled on May 23 in denying an insurer's motion (Patricia L. Smith, et al. v. Fidelity & Guaranty Life Insurance Co., No. 16-0001, N.D. Miss., 2017 U.S. Dist. LEXIS 78104).

Mealey's Insurance - Reinsurer: Insurer Is Not Entitled To Judgment On Reimbursement, Allocation

SYRACUSE, N.Y. - In a breach of contract dispute over asbestos coverage, a reinsurer opposes in separate briefs filed on May 24 an insurer's request to a New York federal court for summary judgment on reimbursement and allocation issues (Utica Mutual Insurance Co. v. Munich Reinsurance America Inc., No. 12-cv-00196, Munich Reinsurance America Inc. v. Utica Mutual Insurance Co., No. 13-cv-00743, N.D. N.Y.).

Mealey's Insurance - Federal Judge Dismisses Insurer's Counterclaims In Construction Defects Dispute

LAS VEGAS - A Nevada federal judge on May 19 dismissed an insurer's breach of contract and declaratory relief counterclaims after determining that the insurer failed to allege facts in support of its assertion that an additional insured's failure to cooperate with the insurer prejudiced the insurer's ability to defend the additional insured in an underlying construction defects suit (Centex Homes v. Zurich Specialties London Limited, et al., No. 16-1278, D. Nev., 2017 U.S. Dist. LEXIS 77212).

Mealey's PI/Product Liability - Colorado Appeals Court: Setoff Should Be Applied To Verdict Before Limitation

DENVER - A Colorado appeals panel on May 18 reversed in part a trial court judge's decision to prevent a developer from obtaining a portion of a $9.5 million verdict entered against a grading company accused of breach of contract for providing services that resulted in defectively built homes, finding that the judge should have reduced the amount by first subtracting $592,500 the plaintiff company recovered from other contractors and then subtracting a $550,000 contractual limitation included in an agreement between the developer and the grading subcontractor (Taylor Morrison of Colorado, Inc., f/k/a Morrison Homes of Colorado, Inc. v. Terracon Consultants, Inc., No. 15CA1030, Colo. App., Div. 5., 2017 Colo. App. LEXIS 623).

Mealey's Insurance - Adjuster Was Improperly Joined To Coverage Dispute Over Storm Damage, Judge Says

SHERMAN, Texas - A Texas federal judge on May 16 denied insureds' motion to remand their breach of contract and bad faith lawsuit arising from storm damage, finding that they failed to allege a claim that is plausible on its face against an insurance adjuster (Hidden Cove Park and Marina, et al. v. Lexington Insurance Co., et al., No. 17-00193, E.D. Texas, 2017 U.S. Dist. LEXIS 74097).

Mealey's PI/Product Liability - 3 Couples Sue Day Care Center Following E. Coli Outbreak

WESTMINSTER, Md. - Three couples filed suit in Maryland state court on May 15, claiming that their children contracted E. coli from a day care center and that the center failed to protect their children from the illness by failing to clean areas where the children were and failing to adopt policies that would prevent the spread of E. coli (Emily Starrs, et al. v. Chelsea's Gentle Care Child Development Center Inc., et al., No. C-17-73527, Md. Cir., Carroll Co.).

Mealey's Insurance - California Appellate Panel Affirms Dismissal Of Bad Faith Suit As Time-Barred

LOS ANGELES - A state trial court's dismissal of an insured's breach of contract and bad faith claims in a homeowners insurance dispute was proper because the insured's claims were filed after the claims' one-year statute of limitations had run, a California appellate panel ruled in affirming on May 12 (Heather A. Smillie v. State Farm General Insurance Co., No. B268353, Calif. App., 2nd Dist., Div. 8, 2017 Calif. App. Unpub. LEXIS 3252).

Mealey's Litigation Procedure - Split 1st Circuit Rules On 2 Arbitration Issues Of First Impression

BOSTON - Deciding two questions of first impression in its circuit, a divided First Circuit U.S. Court of Appeals panel on May 12 ruled that the applicability of the Federal Arbitration Act (FAA) is a threshold question for a court to determine in a case where the parties have delegated questions of arbitrability to an arbitrator and that the FAA's exemption of employment contracts of transportation workers applies to independent contractor transportation worker agreements (Dominic Oliveira, et al. v. New Prime, Inc., No. 15-2364, 1st Cir., 2017 U.S. App. LEXIS 8474).

Mealey's Insurance - Judge: Cession Statement Is Not Necessary To Establish Reinsurance Agreement

PHILADELPHIA - An insurer adequately alleged a relationship between an insurance policy and a reinsurance contract, even without reference to a cession statement, a Pennsylvania federal judge ruled May 12, denying the reinsurer's motion for judgment on the pleadings on the insurer's breach of contract counterclaim (R&Q Reinsurance Co. v. St. Paul Fire & Marine Insurance Co., No. 16-cv-01473, E.D. Pa., 2017 U.S. Dist. LEXIS 72964).

Mealey's Insurance - Panel Orders FIGA To Pay Actual Repair Costs Up To Combined Statutory Cap

LAKELAND, Fla. - On remand, a trial judge should enter a corrected judgment to show that an insured must contract for repairs within damages awarded by a jury and that the Florida Insurance Guaranty Association (FIGA) is required to pay actual repair costs to the contractors up to the combined statutory cap, a Florida appeals panel ruled May 12 (Maria Pupo v. Florida Insurance Guaranty Association, No. 2D15-3901, Fla. App., 2nd Dist., 2017 Fla. App. LEXIS 6775).

Mealey's Labor & Employment - Split 1st Circuit Rules On 2 Arbitration Issues Of First Impression

BOSTON - Deciding two questions of first impression in its circuit, a divided First Circuit U.S. Court of Appeals panel on May 12 ruled that the applicability of the Federal Arbitration Act (FAA) is a threshold question for a court to determine in a case where the parties have delegated questions of arbitrability to an arbitrator and that the FAA's exemption of employment contracts of transportation workers applies to independent contractor transportation worker agreements (Dominic Oliveira, et al. v. New Prime, Inc., No. 15-2364, 1st Cir., 2017 U.S. App. LEXIS 8474).

Mealey's Labor & Employment - 4th Circuit Affirms CBA Wording Kills Retirees' Claim That Benefits Had Vested

RICHMOND, Va. - After a rehearing, a Fourth Circuit U.S. Court of Appeals panel on May 11 affirmed that a federal judge correctly ruled that health benefits for United Steel Workers retirees of a West Virginia aluminum manufacturer did not vest and were properly altered unilaterally by the company because union contracts expressly provided that the benefits remained in effect only for the term of the contracts, which had expired (Ronald Barton, et al v. Constellium Rolled Products-Ravenswood, LLC, et al., No. 16-1103, 4th Cir., 2017 U.S. App. LEXIS 8357).

Mealey's Litigation Procedure - Judge Bars Testimony In Reinsurance Risk Company's Breach Of Contract Case

SAN FRANCISCO - A California federal judge excluded on May 10 lay opinion testimony by a reinsurance risk management company's chief financial officer in a breach of contract lawsuit about funds that were improperly withdrawn from bank accounts (Les Fields/C.C.H.I. Insurance Services v. Stuart M. Hines, et al., No. 15-03728, N.D. Calif., 2017 U.S. Dist. LEXIS 71620).

Mealey's Insurance - Judge Bars Testimony In Reinsurance Risk Company's Breach Of Contract Case

SAN FRANCISCO - A California federal judge excluded on May 10 lay opinion testimony by a reinsurance risk management company's chief financial officer in a breach of contract lawsuit about funds that were improperly withdrawn from bank accounts (Les Fields/C.C.H.I. Insurance Services v. Stuart M. Hines, et al., No. 15-03728, N.D. Calif., 2017 U.S. Dist. LEXIS 71620).

Mealey's Insurance - Insured May Be Able To Recover Against Adjuster In Bad Faith Suit, Judge Rules

DALLAS - A federal judge in Texas on May 10 ruled that remand of an insurance breach of contract and bad faith lawsuit to state court is warranted because an insured has shown that it may recover against the adjuster for failing to offer a fair settlement on a commercial property insurance claim (Arlington Heights Memorial Post No. 8234 Veterans Of Foreign Wars of the United States, Fort Worth, Texas, v. Covington Specialty Insurance Co., et al., No. 16-3112, N.D. Texas, 2017 U.S. Dist. LEXIS 71125).

Mealey's IP/Tech - 9th Circuit Partly Reverses Ruling In Coverage Dispute Over Intellectual Property

PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 9 affirmed in part, reversed in part and remanded a coverage dispute arising from an underlying lawsuit alleging that insureds breached an intellectual property agreement and committed trade libel and tortious inducement to breach of contract (The Burlington Insurance Co. v. Minadora Holdings, LLC, et al., Nos. 15-55702 and 15-56657, 9th Cir., 2017 U.S. App. LEXIS 8232).

Mealey's Insurance - 9th Circuit Partly Reverses Ruling In Coverage Dispute Over Intellectual Property

PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 9 affirmed in part, reversed in part and remanded a coverage dispute arising from an underlying lawsuit alleging that insureds breached an intellectual property agreement and committed trade libel and tortious inducement to breach of contract (The Burlington Insurance Co. v. Minadora Holdings, LLC, et al., Nos. 15-55702 and 15-56657, 9th Cir., 2017 U.S. App. LEXIS 8232).

Mealey's Banking & Finance - Insurers' Rehabilitator Fails To Allege Breach Of Contract Claim, Reinsurer Asserts

CHICAGO - A mortgage insurance reinsurer argues in a May 5 reply brief to an Illinois federal court that the rehabilitator of two insolvent insurers failed to assert sufficient allegations to support breach of contract and breach of the implied covenant of good faith and fair dealing claims (People of the State of Illinois, ex rel., Anne Melissa Dowling, Acting Director of Insurance of the State of Illinois, as Rehabilitator for Triad Guaranty Insurance Corporation and Triad Guaranty Assurance Corp. v. AAMBG Reinsurance Inc., No. 16-cv-07477, N.D. Ill.).

Mealey's Litigation Procedure - 5th Circuit Reverses Order That Certified Fraud Class In Insurance Practices Dispute

NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on May 9 remanded a lower federal court's certification order as to contract and statutory claims and reversed the certification order as to the fraud claim in a class action lawsuit challenging an insurer's practices in determining the value of totaled vehicles (Cheryl Slade v. Progressive Security Insurance Co., No. 15-30010, 5th Cir., 2017 U.S. App. LEXIS 8229).

Mealey's Insurance - Insurers' Rehabilitator Fails To Allege Breach Of Contract Claim, Reinsurer Asserts

CHICAGO - A mortgage insurance reinsurer argues in a May 5 reply brief to an Illinois federal court that the rehabilitator of two insolvent insurers failed to assert sufficient allegations to support breach of contract and breach of the implied covenant of good faith and fair dealing claims (People of the State of Illinois, ex rel., Anne Melissa Dowling, Acting Director of Insurance of the State of Illinois, as Rehabilitator for Triad Guaranty Insurance Corporation and Triad Guaranty Assurance Corp. v. AAMBG Reinsurance Inc., No. 16-cv-07477, N.D. Ill.).

Mealey's Insurance - Federal Judge Stays Bad Faith Suit Pending Appeal In Underlying Action

SEATTLE - A stay of proceedings in an insurance breach of contract and bad faith lawsuit is proper because the stay will not substantially injure the plaintiffs, a federal judge in Washington ruled May 8 in granting an insurer's motion in a third-party automobile insurance dispute (Kathleen Link, et al. v. American Family Mutual Insurance Co., No. 16-1117, W.D. Wash., 2017 U.S. Dist. LEXIS 70046).

Mealey's Insurance - 5th Circuit Reverses Order That Certified Fraud Class In Insurance Practices Dispute

NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on May 9 remanded a lower federal court's certification order as to contract and statutory claims and reversed the certification order as to the fraud claim in a class action lawsuit challenging an insurer's practices in determining the value of totaled vehicles (Cheryl Slade v. Progressive Security Insurance Co., No. 15-30010, 5th Cir., 2017 U.S. App. LEXIS 8229).