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LexisNexis® Mealey's™ Insurance Legal News

Headline Insurance Legal News from LexisNexis®


Settlement Of Environmental Contamination Claims Did Not Violate Louisiana Law
LAKE CHARLES, La. - The Third Circuit Louisiana Court of Appeal on March 7 determined that a trial court did not violate Louisiana law by approving a settlement between landowners and oil and gas operators because the settlement met all of the requirements under Louisiana law and a contradictory hearing and a deposit of funds with the court was not required under the statute governing the settlement (Shirlene Britt, et al. v. Riceland Petroleum Co., et al., No. 17-941, La. App., 3rd Cir., 2018 La. App. LEXIS 420).

Motion To Dismiss Denied; Excess Insurers Are Not Necessary Parties, Judge Says
CLEVELAND - An Ohio federal judge on March 6 denied an insured's motion to dismiss after determining that complete diversity of citizenship exists because the insured's excess insurers are not necessary parties to the primary insurers' suit, which seeks a coverage declaration for an underlying suit arising out of the violations of the Clean Water Act (National Fire Insurance of Hartford, et al. v. Willoughby, No. 17-1392, N.D. Ohio, 2018 U.S. Dist. LEXIS 36401).

Law Firm Seeking Liability For Johns-Manville Broker Appeals To District Court
NEW YORK - A Texas law firm will take its fight to hold Johns-Manville Corp.'s insurance broker independently liable for asbestos personal injury claims to New York federal court, filing a notice of appeal Feb. 12 of a bankruptcy judge's ruling barring the firm's in personam claims against the broker (In re Johns-Manville Corporation, et al., No. 1:18-cv-01228, S.D. N.Y.).

Insurers Argue Michigan Law Should Be Applied In Asbestos Coverage Dispute
WILMINGTON, Del. - Two insurers involved in an asbestos coverage dispute maintain in their Feb. 22 reply brief to the Delaware Supreme Court that Michigan law, rather than Delaware law, should be applied to their policies and that the high court should find that each asbestos claim at issue constitutes a separate occurrence under their policies (Motors Liquidation Co. DIP Lenders Trust v. Allstate Insurance Co., et al., No. 381, 2017, Del. Sup.).

Insured Must Identify All Defendants Named In Underlying Asbestos Suits
BUFFALO, N.Y. - An insured must identify all of the defendants named in underlying asbestos suits because the identity of the defendants is relevant to insurers' coverage obligations, a New York federal magistrate judge said March 8 (American Precision Industries Inc. v. Federal Insurance Co., et al., No. 14-1050, W.D. N.Y., 2018 U.S. Dist. LEXIS 38206).

Federal Judge Denies Motion To Dismiss City's Claims In Collapse Dispute
NATCHEZ, Miss. - Dismissal of an insurer's claims against a Mississippi city that filed a negligence suit against an insured after the insured's building collapsed is not warranted because the coverage claims at issue in the insurer's federal suit are different from the claims alleged by the city in the underlying state suit, a Mississippi federal judge said March 8 (Hudson Specialty Insurance Co. v. Talex Enterprises LLC, et al., No. 17-137, S.D. Miss., 2018 U.S. Dist. LEXIS 37873).

Excess Policy Not Triggered; Endorsement Was Not Subject To Primary Policy Limit
LAS VEGAS - A Nevada federal judge on March 9 determined that an excess insurer's policy was not triggered because an endorsement included in the primary insurer's policy provided an additional $2 million in coverage for a contractor's work that was not subject to the primary policy's $2 million per-occurrence limit (AIG Specialty Insurance Co. v. Liberty Mutual Fire Insurance Co., No. 17-1260, D. Nev., 2018 U.S. Dist. LEXIS 38745).

Pennsylvania Superior Court Panel Affirms Finding Of No Coverage For Insured
HARRISBURG, Pa. - No coverage is owed for environmental contamination at a number of sites throughout the country because it is not clear that the contamination was caused solely by the insured's operations and the policies at issue provide coverage only for contamination that was caused by the insured's operations, the Pennsylvania Superior Court said Feb. 26 (Consolidated Rail Corp. v. ACE Property & Casualty Insurance Co., et al., No. 1376 EDA 2015, Pa. Super., 2018 Pa. Super. Unpub. LEXIS 578).

Mold Damages Claim Barred By Pollution Exclusion, Fungi Exclusion, Panel Says
MADISON, Wisc. - The Wisconsin District 4 Court of Appeals on March 1 affirmed a circuit court's ruling that no coverage is afforded under a farmowner's policy or a contractor's insurance policy for a mold damage claim because the coverage is clearly precluded by the pollution exclusion in the farmowner's policy and the fungi exclusion in the contractor's policy (Michael Foley, et al. v. Wisconsin Mutual Insurance Co., et al., No. 2017AP545, Wis. App., Dist. IV, 2018 Wisc. App. LEXIS 261).

Question Of Fact Exists On Whether Insurer Properly Handled Insured's Claim
OAKLAND, Calif. - A California federal judge on Feb. 26 denied an insurer's motion for summary judgment on an insured's bad faith and punitive damages allegations after determining that a question of fact exists as to whether the insurer's handling of the insured's coverage claim was reasonable (Virginia Colwell v. State Farm General Insurance Co., No. 16-5485, N.D. Calif., 2018 U.S. Dist. LEXIS 30690).

Insurer Failed To Prove Exposure Before Policy Effective Date Caused Leukemia
PHILADELPHIA - A Pennsylvania federal judge on Feb. 27 determined that an underlying claimant's exposure to benzene and other hydrocarbons does not fall outside of a pollution policy's retroactive date because the insurer cannot prove that the claimant's diagnosis of leukemia and ultimate death were caused by pre-retroactive-date exposures to the chemicals (Catlin Specialty Insurance Co. v. J.J. White Inc., et al., No. 14-1255, E.D. Pa., 2018 U.S. Dist. LEXIS 31189).

Reinsurer's Motion For New Trial Denied; Jury Verdict Was Reasonable, Judge Says
UTICA, N.Y. - A New York federal judge on Feb. 28 denied a reinsurer's motion for a new trial after determining that there was sufficient evidence for a jury to conclude that the reinsured's settlements made on behalf of its insured for underlying asbestos claims were reasonable and that the reinsurer was obligated to follow the settlements under seven reinsurance agreements (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y., 2018 U.S. Dist. LEXIS 32271).

Insurer Ordered To Produce Documents As They Pertain To Missing Liability Policy
BUFFALO, N.Y. - An insurer must produce a number of insurance policy forms related to commercial general liability policies it issued in the 1970s because the documents are clearly relevant to an insured's claim for coverage for underlying asbestos liabilities under a missing policy, a New York federal magistrate judge said Feb. 26 (American Precision Industries Inc. v. Federal Insurance Co., et al., No. 14-1050, W.D. N.Y., 2018 U.S. Dist. LEXIS 30596).

Florida Panel Finds Insurer Is Entitled To Attorney Fees, Costs
MIAMI - Finding that a lower court erred in ruling that an insurer's $1,000 proposed settlement for water damage was not made in good faith, a Florida appeals panel on Feb. 14 reversed and remanded for the lower court to grant the insurer's amended motion for entitlement to attorney fees and costs (Mount Vernon Fire Insurance Company v. New Moon Management, Inc., a/k/a New Moon Management Co., No. 3D16-2243, Fla. App., 3rd Dist., 2018 Fla. App. LEXIS 2165).

Defendants Afforded Time To Conduct Discovery In Lead Paint Coverage Dispute
BALTIMORE - A Maryland federal judge on Feb. 22 denied an insurer's motion for summary judgment in a lead paint injury coverage suit after determining that the defendants must first be afforded the opportunity to conduct discovery on the issue of whether the insured made a material misrepresentation in the policy application (CX Reinsurance Co. Ltd., et al. v. Homewood Realty Inc., et al., No. 15-3136, D. Md.; 2018 U.S. Dist. LEXIS 28354).

Insurer Responds To Home Liquidator's Settlement Of Lead Bodily Injury Claims
CONCORD, N.H. - Responding to a $200,000 settlement by the liquidator of The Home Insurance Co. with an additional insured on lead bodily injury claims, another insurer in a Jan. 4 filing tells a New Hampshire trial court that it reserves its rights to contribution claims (In the Matter of the Liquidation of The Home Insurance Co., No. 03-E-0106, N.H. Super., Merrimack Co.).

Geo. V. Hamilton's Plan Draws Only Minor Objections From 2 Insurers
PITTSBURGH - Two insurers of Chapter 11 debtor Geo. V. Hamilton Inc. are the only parties to object to the company's plan of reorganization, and the objections are more like "caveats" that should be resolved in time for the plan confirmation hearing, the insurers said Feb. 20 in an objection and a joinder filed in Pennsylvania federal bankruptcy court (In re Geo. V. Hamilton, Inc., No. 15-23704, W.D. Pa. Bkcy.).

Geo. V. Hamilton Settles Dispute With Insurance Association For $6 Million
PITTSBURGH - A Pennsylvania insurance guaranty association will pay $6 million to the asbestos trust planned in the Chapter 11 case of debtor Geo. V. Hamilton Inc. to resolve a coverage dispute involving five policies issued to Hamilton by now-insolvent insurers, with a federal bankruptcy judge approving the deal Feb. 14 (In re Geo. V. Hamilton, Inc., No. 15-23704, W.D. Pa. Bkcy.).

Maryland Casualty Seeks Protection Of W.R. Grace Injunction For Asbestos Claims
WILMINGTON, Del. - An asbestos liability insurer of former Chapter 11 debtor W.R. Grace & Co. asked a Delaware federal bankruptcy judge Jan. 29 to enforce the protective injunction in the debtor's reorganization plan to halt claimants in Montana from pursuing asbestos claims against the insurer and to impose sanctions on the claimants' attorneys for continuing to prosecute the claims despite a prior order (In re: W.R. Grace & Co., et al., No. 01-01139, D. Del. Bkcy.).

No Coverage Afforded For Imminent Collapse, Federal Judge Says
BRIDGEPORT, Conn. - No coverage is afforded for the imminent collapse of a home's basement walls because the loss is not sudden or abrupt as required for coverage to exists under the policy, a Connecticut federal judge said Feb. 23 in granting the insurer's motion to dismiss (Mark R. Hurlburt, et al. v. Massachusetts Homeland Insurance Co., No. 17-503, D. Conn., 2018 U.S. Dist. LEXIS 29311).

Judge: Insureds' Basement Cracking Is Not Covered Under 'Collapses' Provision
BRIDGEPORT, Conn. - Progressive deterioration caused by a chemical reaction and resulting in cracking concrete is not covered under a homeowners insurance policy's "collapses" provision, a Connecticut federal judge ruled Feb. 20 (Bart Zamichiei, et al. v. CSAA Fire & Casualty Insurance Co., No. 16-739, D. Conn., 2018 U.S. Dist. LEXIS 26956).

No Coverage Due For Alleged Misrepresentations Regarding Water Damage
MADISON, Wis. - An insurer owes no coverage to an insured for alleged misrepresentations made about water damage to a home he sold because the alleged misrepresentations were not an accident and, therefore, not an occurrence under the policy, as required for coverage to exist, the Fourth District Wisconsin Court of Appeals said Feb. 20 (Susan Blesener, et al. v. William Linton, et al., No. 2016AP2117, Wis. App., Dist. 4, 2018 Wisc. App. LEXIS 199).

Coverage Barred For Release Of Chlorine Gas, New York Federal Judge Says
SYRACUSE, N.Y. - No coverage is owed to insureds seeking a defense for an underlying suit alleging bodily injury claims caused by the release of chlorine gas from the insureds' scrap metal recycling plant because the policies' absolute pollution exclusion clearly precludes coverage for the underlying suit, a New York federal judge said Feb. 13 (Ben Weitsman & Son of Scranton LLC, et al. v. Hartford Fire Insurance Co., et al., No. 16-0780, N.D. N.Y., 2018 U.S. Dist. LEXIS 22970).

Most Emails Sought Are Shielded From Discovery In Pollution Coverage Row
FORT WAYNE, Ind. - Twelve of 19 emails between an insurer, a claims management company and attorneys are protected from discovery by the work product doctrine, an Indiana federal magistrate judge determined Feb. 6 after conducting an in camera review of the emails sought by an insured in an environmental contamination coverage dispute (Valley Forge Insurance Company v. Hartford Iron & Metal, Inc., et al., No. 1:14-cv-00006, N.D. Ind., 2018 U.S. Dist. LEXIS 19695).

Rapid-American Denied Protective Order For Insurers' Subpoenas
NEW YORK - Chapter 11 debtor Rapid-American Corp. and asbestos claimants in its bankruptcy case do not have standing to challenge subpoenas served by insurers to asbestos claims-processing facilities seeking evidence of fraud in the asbestos trust system, and besides, the information sought is relevant to the debtor's declaratory judgment action against the insurers, a New York federal bankruptcy judge held Feb. 12 (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy., 2018 Bankr. LEXIS 378).

Insurer, Reinsurer Submit Briefs On New York High Court Decision's Application
NEW YORK - In a coverage dispute over asbestos litigation costs, a reinsurer and insurer submitted letters on Feb. 9 to the Second Circuit U.S. Court of Appeals concerning how a New York high court ruling applies to a reinsurance contract's per-occurrence liability cap (Global Reinsurance Corporation of America v. Century Indemnity Co., No. 15-2164, 2nd Cir.).

Reinsurer, Insurer Agree To Litigate $1.25M Breach Of Contract Dispute
HARTFORD, Conn. - A Connecticut federal judge on Feb. 7 granted a joint motion by a reinsurer and insurer to withdraw a motion to dismiss and a motion to enjoin and instead to litigate a $1.25 million breach of contract dispute over settlement of underlying asbestos claims (Travelers Casualty and Surety Co. v. Allstate Insurance Co., No. 17-02144, D. Conn.).

Kaiser Gypsum Debtors Agree To Claim Amount In Insolvent Insurers' Run-Off
CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge on Feb. 17 approved in a minute order a settlement between Chapter 11 debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. and the joint scheme administrator for two insolvent British insurers, setting claim values for the debtors in the insurers' run-off proceedings (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

Insurer Asks For Relief From Kaiser Gypsum's Stay To Seek Settlement Reimbursement
CHARLOTTE, N.C. - An insurer of Chapter 11 debtor Hanson Permanente Cement Inc. sought relief from the automatic bankruptcy stay Feb. 13 in North Carolina federal bankruptcy court so it can pursue $2.8 million in reimbursements from other insurers for settlement payments made to asbestos personal injury claimants under a 2009 agreement (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

Insurer Has Duty To Defend, Indemnify Negligent Installation Claims, Appeals Panel Finds
HARRISBURG, Pa. - A commercial general liability insurer has a duty to defend and indemnify an insured subcontractor against a contractor's claims of negligent installation, the Pennsylvania Superior Court affirmed Feb. 9 (J.J.D. Urethane Co. v. Westfield Insurance Co., et al., Nos. 1440 EDA 2017 & 1554 EDA 2017, Pa. Super., 2018 Pa. Super. Unpub. LEXIS 396).