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Preview: LexisNexis® Mealey's™ Insurance Legal News

LexisNexis® Mealey's™ Insurance Legal News



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No Coverage Owed For Underlying Suit Arising Out Of Cleanup Of Lead Paint Dust
ST. LOUIS - No coverage is afforded for an underlying suit alleging claims related to the cleanup of lead dust after the removal of lead paint from a high school because the policy's pollution endorsement applies only in limited circumstances and the policy's lead exclusion clearly bars coverage, a Missouri federal judge said Nov. 20 (Rice Painting Co. Inc. v. Depositors Insurance Co., No. 15-1064, E.D. Mo., 2017 U.S. Dist. LEXIS 191355).



Oklahoma Federal Judge Strikes Affirmative Defenses In Contamination Dispute
TULSA, Okla. - An Oklahoma federal judge on Nov. 17 granted an insured's motion to strike five of its insurer's affirmative defenses after finding that the individual counts asserted by the insurer are redundant (Explorer Pipeline Co. v. American Guarantee & Liability Insurance Co., No. 17-330, N.D. Okla., 2017 U.S. Dist. LEXIS 190550).



Connecticut High Court To Review Rulings In Asbestos, Silica Coverage Dispute
HARTFORD, Conn. - The Connecticut Supreme Court on Oct. 18 agreed to review a number of issues decided by the Connecticut Appellate Court in an asbestos and silica coverage dispute after a number of the insurers and the insured petitioned the high court for review (R.T. Vanderbilt Co. Inc. v. Hartford Accident & Indemnity Co., et al., Nos. SC 20000, SC20001, SC20003, Conn. Sup., 2017 Conn. LEXIS 320, 2017 Conn. LEXIS 326, 2017 Conn. LEXIS 322).



Insurer Owes Trustee $3.5M In Policy Limits, Attorney Fees For Coverage Dispute
OAKLAND, Calif. - A California federal bankruptcy judge on Nov. 16 entered a judgment of more than $3.5 million against an insurance company in a dispute over the amount of coverage owed to a company's liquidating trust for asbestos personal injury claims, including attorney fees and a $60,000 penalty for the insurer's "vexatious and unreasonable conduct" in the case (In re CFB Liquidating Corporation, f/k/a Chicago Fire Brick Co., et al., No. 01-45483, [Barry A. Chatz, as Trustee for the CFB/WFB Liquidating Trust v. Continental Casualty Company, No. 15-4136] N.D. Calif. Bkcy., 2017 Bankr. LEXIS 3938).



Judge Resolves Motions To Exclude Testimony, Evidence In Reinsurer, Insurer Dispute
UTICA, N.Y. - In a dispute over a $325 million settlement of asbestos claims, a New York federal judge on Nov. 16 addressed a number of motions filed by an insurer and a reinsurer to preclude expert testimony and certain arguments from trial (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y., 2017 U.S. Dist. LEXIS 189911).



No Additional Coverage Owed For Mold Damage, New Jersey Panel Says
TRENTON, N.J. - An insurer owes no additional coverage to its insureds for mold damages caused by a leaking water pipe in the wall of a shower because the policy at issue clearly limited coverage for mold damage to $10,000 under a mold rider, the Appellate Division of the New Jersey Superior Court said Nov. 15 (Eugene J. Payor, et al. v. New Jersey Manufacturers Insurance Co., No. A-0345-16T2, N.J. Super., App. Div., 2017 N.J. Super. Unpub. LEXIS 2851).



Washington Federal Judge Says Questions Of Fact Exist In Water Damages Suit
SEATTLE - A Washington federal judge on Nov. 16 determined that questions of material fact exist regarding the application of an insurer's exclusions for deterioration and rot to an insured condominium association's claim for water intrusion damages that occurred over time to the exterior cladding of two of the association's buildings (Sunwood Condominium Association v. Travelers Casualty Insurance Company of America, et al., No. 16-1012, W.D. Wash., 2017 U.S. Dist. LEXIS 189892).



Known Defects Relieve Insurer Of Duty To Pay For Repairs, Panel Finds
LOS ANGELES - A homeowner "who is aware, long before a rainstorm occurs and causes damage, of possible leakage" caused by construction defects cannot reasonably expect an insurer to pay for repairs on the theory that rainwater, and not the defects, caused the damage, a California appeals panel affirmed Nov. 14 (Simon Cohen, et al. v. Pacific Specialty Insurance Co., No. B276060, Calif. App., 2nd Dist., Div. 8, 2017 Cal. App. Unpub. LEXIS 7779).



Georgia Federal Judge Awards Insured More Than $1.1M For Contamination Costs
ATLANTA - A Georgia federal judge on Nov. 3 awarded an insured more than $1.1 million for contamination claims arising out of the operation of a battery plant after rejecting the insurer's argument that the insured failed to meet the policy's deductible (ACE American Insurance Co. v. Exide Technologies Inc., et al., No. 16-1600, N.D. Ga.).



Pollution Exclusion Does Not Bar Coverage For Carbon Monoxide Suits, Insured Argues
SAN FRANCISCO - An Oregon federal judge erred in granting summary judgment in favor of an insurer in a dispute over coverage for underlying carbon monoxide poisoning suits because the pollution exclusion in the policy at issue does not apply to carbon monoxide as it is not an irritant or contaminant, an insured argues in an Oct. 23 brief to the Ninth Circuit U.S. Court of Appeals (Colony Insurance Co. v. Victory Construction LLC, et al., No. 17-35357, 9th Cir.).



No Coverage Owed For Asbestos Suit, Insurer Asserts In Complaint
CHICAGO - No coverage is owed for an underlying asbestos personal injury suit filed against an insured because the policies' pollution exclusion and silica exclusion preclude coverage, the insurers assert in a Nov. 3 complaint filed in Illinois federal court (All America Insurance Co., et al. v. Banner Truck & Trailer Sales Inc., et al., No. 17-1214, S.D. Ill.).



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).



Judge: 3 Policy Exclusions Bar Coverage For Damage Caused By Marijuana Operations
DETROIT - Finding that tenants' use of an insured's commercial property units to grow marijuana was illegal or at the very least dishonest, a Michigan federal judge on Nov. 8 held that coverage for the insured's losses arising from this activity is barred by an insurance policy's illegal/dishonest acts provision, as well as two other policy exclusions (K.V.G. Properties Inc. v. Westfield Insurance Co., No. 16-11561, E.D. Mich., 2017 U.S. Dist. LEXIS 185005).



Federal Judge: California Law Applies To Claims In Water Damage Coverage Suit
NEW BERN, N.C. - A North Carolina federal judge on Nov. 9 determined that California law should be applied to a dispute over coverage for water damages because the policy at issue was issued in California and the insured's principal place of business is in California (Certain Underwriters at Lloyd's of London v. American Realty Advisors, et al., Nos. 16-940, 17-74, E.D. N.C., 2017 U.S. Dist. LEXIS 185842).



Federal Judge Says Assertion Of Reservation Of Rights Is Not Affirmative Defense
MIAMI - A Florida federal judge on Nov. 7 partially granted an insured's motion to strike its insurer's affirmative defenses as they pertained to the insurer's reservation of rights because the assertion of a reservation of rights is not an affirmative defense (Kapow of Boca Raton Inc. et al. v. Aspen Specialty Insurance Co., No. 17-80972, S.D. Fla., 2017 U.S. Dist. LEXIS 184224).



Pollution Exclusion Bars Coverage For Injuries Caused By Lead-Smelting Emissions
JEFFERSON CITY, Mo. - An insurer has no duty to defend its insured against underlying suits alleging injuries arising out of toxic emissions from the insured's lead-smelting plant because the policy's pollution exclusion clearly precludes coverage, the Missouri Supreme Court said Oct. 31 (The Doe Run Resources Corp. v. American Guarantee & Liability Insurance Co., et. al., No. SC96107, Mo. Sup., 2017 Mo. LEXIS 488).



No Coverage For Underlying Suit Arising Out Of Carbon Monoxide Poisoning, Judge Says
HAMMOND, Ind. - No coverage is owed for an underlying suit seeking damages as a result of the deaths of four family members caused by carbon monoxide poisoning because the underlying claims alleged against the insureds arose out of the insureds' contract with the homeowner and do not allege an occurrence for which coverage exists, an Indiana federal judge said Oct. 31 (Allstate Insurance Co. v. McColly Realtors Inc. et al., No. 16-142, N.D. Ind., 2017 U.S. Dist. LEXIS 179793).



At Least 2 Occurrences Contributed To Contamination Of River, N.J. Judge Says
NEWARK, N.J. - A New Jersey judge on Oct. 16 denied a motion for summary judgment filed by a number of insurers involved in an environmental contamination coverage dispute after determining that at least two occurrences contributed to the contamination of a New Jersey river (Cooper Industries LLC v. Employers Insurance of Wausau et al., No. L-9284-11, N.J. Super., Essex Co., Law Div.).



New York Federal Judge Approves Settlement Of Some Environmental Claims
NEW YORK - A New York federal judge on Oct. 30 entered an order endorsing a settlement in which an insured agreed that certain underlying environmental contamination claims are not covered under two environmental hazard insurance policies issued to the insured in the 1980s (Travelers Indemnity Co., et al. v. Northrop Grumman Corp., et al., Nos. 16-8778, 12-3040, S.D. N.Y., 2017 U.S. Dist. LEXIS 180486).



Missouri Federal Judge Permits Discovery On Insured's Understanding Of Policies
KANSAS CITY, Mo. - A Missouri federal judge on Nov. 1 determined that a pollution liability insurer is entitled to the production of documents related to whether overlapping coverage exists under the policies at issue and what the insured's understanding of the policies at issue was when the policies were issued (Sunflower Redevelopment LLC v. Illinois Union Insurance Co., No. 15-577, W.D. Mo., 2017 U.S. Dist. LEXIS 180710).



Ohio Supreme Court Denies Insurer's Petition To Review Asbestos Occurrence Ruling
CINCINNATI - The Ohio Supreme Court on Nov. 1 denied an insurer's petition to review an appellate court's ruling that an insured's liability for underlying asbestos claims arose from multiple occurrences (The William Powell Co. v. OneBeacon Insurance Co., et al., No. 2017-0411, Ohio Sup.).



Fungi, Bacteria Exclusion Does Not Bar Insured's Defects, Panel Concludes
ELGIN, Ill. - A fungi and bacteria exclusion does not apply to preclude otherwise covered property damage from construction defects, an Illinois appeals panel affirmed Nov. 2, finding that an insurer had a duty to defend an underlying action (Pekin Insurance Co. v. JB Architecture Group Inc., et al., No. 15-MR-1755, Ill. App., 2nd Dist., 2017 Ill. App. Unpub. LEXIS 2236).



Excess Insurers' Motion To Dismiss Denied; Abstention Not Warranted, Judge Says
MILWAUKEE - A Wisconsin federal judge on Oct. 27 denied a motion to dismiss by four excess insurers involved in an asbestos coverage dispute after determining that abstention is not warranted because a separate suit filed by the insured in Ohio state court is not duplicative of the insured's suit in Wisconsin federal court (Eaton Corp. v. Westport Insurance Co., et al., No. 15-1157, E.D. Wis., 2017 U.S. Dist. LEXIS 178366).



Oakfabco Rejects $9.7 Million Settlement With Asbestos Insurers
CHICAGO - An Illinois federal bankruptcy judge on Oct. 2 authorized Chapter 11 debtor Oakfabco Inc. to reject a $9,783,000 settlement with asbestos insurers after the company said it is in the best interests of its bankruptcy estate to focus on confirming a plan of liquidation and have its "right and remedies" under the policies at issue determined afterward (In re: Oakfabco, Inc., No. 15-27062, N.D. Ill. Bkcy.).



Arbitration Not Available For Coverage Dispute Based On Policy, Judge Rules
CHARLOTTE, N.C. - Former Chapter 11 debtor Garlock Sealing Technologies LLC does not have to arbitrate a dispute with an insurer over a policy's coverage for asbestos claims because an arbitration provision in the policy is deleted by another provision stating that the policy's terms must match those of an umbrella policy that contains no arbitration provision, a North Carolina federal bankruptcy judge held Oct. 12 (Safety National Casualty Corp. v. Garlock Sealing Technologies LLC, et al., No. 3:17-cv-00458, W.D. N.C.).



Carrier Files Suit, Says No Coverage Owed Based On Total Pollution Exclusion
AUGUSTA, Ga. - An insurer claims in an Oct. 26 complaint filed in Georgia federal court that it has no duty to defend its insured against an underlying wrongful death lawsuit arising out of the release of liquid nitrogen at its insured's plant because the primary policy's total pollution exclusion and the hazardous or toxic materials exclusion clearly preclude coverage (Evanston Insurance Co. v. Xytex Tissue Services LLC, et al., No. 17-140, S.D. Ga.).



Florida Federal Judge Denies Motion To Remand Water And Mold Damage Suit
MIAMI - A Florida federal judge on Oct. 25 denied an insured's motion to remand after determining that the federal amount in controversy minimum has been met because the damages sought by the insured and its assignee arise from the same insurance claim and, therefore, must be considered in the aggregate rather than individually (Kapow of Boca Raton Inc. et al. v. Aspen Specialty Insurance Co., No. 17-80972, S.D. Fla., 2017 U.S. Dist. LEXIS 176366).



Connecticut Federal Judge Clarifies Prior Ruling In Suit Over Water, Ice Damage
BRIDGEPORT, Conn. - A Connecticut federal judge on Oct. 20 issued a ruling adhering to his May ruling in a lawsuit regarding whether damage to a freezer floor is barred by the policy's earth movement exclusion, but including clarifications (Thurston Foods Inc. v. Wausau Business Insurance Co., No. 15-14, D. Conn., 2017 U.S. Dist. LEXIS 173922).



Judge: Fact Issue As To Whether Occurrence Caused Physical Injury, Loss Of Use
LAFAYETTE, La. - Denying a commercial general liability insurer's motion for summary judgment, a Louisiana federal judge on Oct. 19 held that insureds have provided evidence demonstrating that there is an issue of material fact regarding whether an occurrence of misapplying chemicals caused physical injury and/or loss of use of the rice and crawfish crops (Scottsdale Insurance Co. v. TL Spreader, LLC, et al., No. 15-2664, W.D. La., 2017 U.S. Dist. LEXIS 174439).