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Headline Catastrophic Loss Legal News from LexisNexis®
Texas Supreme Court Grants Review Of Discovery Dispute Over Attorney Fees
AUSTIN, Texas - The Texas Supreme Court in a Sept. 2 pronouncement granted relators' petition to review a lower court's ruling compelling them to respond to discovery requests concerning their attorney fees in a multidistrict litigation hailstorm property damage coverage dispute (In Re National Lloyds Insurance Co., Wardlaw Claims Service Inc. and Ideal Adjusting Inc., No. 15-0591, Texas Sup.).
Judge: Adjuster Properly Joined In Bad Faith Lawsuit
DALLAS - An insurance adjuster was properly joined in an insurance bad faith and breach of contract lawsuit because an insured has pleaded a claim against the adjuster for violation of the Texas Insurance Code, destroying diversity jurisdiction, a federal judge in Texas ruled Aug. 22 in remanding the action to state court (Robert Martinez v. State Farm Lloyds, et al., No. 16-0040, N.D. Texas; 2016 U.S. Dist. LEXIS 111334).
Judge: Insured Did Not Show That Adjusters Violated Insurance Code
SHERMAN, Texas - A claims adjuster and adjusting company were improperly joined in an insurance breach of contract and bad faith lawsuit because an insured failed to provide any fact to show that those defendants' actions were in violation of the Texas Insurance Code, a federal judge in Texas ruled Aug. 8 in denying the insured's motion to remand (Lillian Elizondo v. Metropolitan Lloyds Insurance Co. of Texas, et al., No. 16-306, E.D. Texas; 2016 U.S. Dist. LEXIS 103878).
8th Circuit To Hear Case Involving Damage Appraisal Dispute
ST. LOUIS - The Eighth Circuit U.S. Court of Appeals is set to schedule oral arguments in a case in which homeowners and an insurer dispute an award of damages based on a finding by an appraisal panel and whether the statute of limitations in Minnesota's arbitration act applies to appraisal challenges (Mark Herll, et al. v. Auto-Owners Insurance Co., No. 16-1889, 8th Cir.).
Panel Partly Vacates Ruling In Amtrak's Superstorm Sandy Suit Against Insurers
NEW YORK - The Second Circuit U.S. Court of Appeals on Aug. 31 found that a lower court erred when it prematurely granted summary judgment in favor of insurers on whether Amtrak was entitled to coverage under the Demolition and Increased Cost of Construction (DICC) clause in its insurance policies, vacating and remanding the Superstorm Sandy dispute in part (National Railroad Passenger Corp. v. Aspen Specialty Insurance Co., et al., No. 15-2358, 2nd Cir.; 2016 U.S. App. LEXIS 16074).
Insured's Failure To Comply With Proof Of Loss Appears 'Willful,' Judge Says
CAMDEN, N.J. - A New Jersey federal judge on Aug. 25 granted an insurer's motion for summary judgment on an ambulance owner insured's amended complaint arising from Superstorm Sandy damage, finding that the insured's failure to comply with the policy's proof-of-loss requirement is fatal to its breach of contract and bad faith claims (Sea Bright First Aid Squad Inc. v. Arch Insurance Co., No. 14-1447, D. N.J.; 2016 U.S. Dist. LEXIS 113811).
New York Justice: Fact Issue Precludes Summary Judgment In Superstorm Sandy Dispute
NEW YORK - A New York justice on Aug. 8 held that a material issue of fact exists regarding whether an insurer waived an insurance policy's monthly inventory reporting requirement, refusing to grant summary judgment in a dispute over coverage for a car dealership's loss of inventory caused by Superstorm Sandy (Potamkin Cadillac-Buick-Chevrolet-Geo, Ltd., et al. v. Allianz Global Corporate & Specialty Marine Insurance Co., et al., No. 651150/2013, N.Y. Sup., New York Co.; 2016 N.Y. Misc. LEXIS 2922).
No Coverage For Damage Caused By Mudslide, 10th Circuit Affirms
DENVER - The 10th Circuit U.S. Court of Appeals on Aug. 29 affirmed a lower federal court's ruling that there is no coverage for damage to an insured's commercial building caused by a mudslide (Paros Properties LLC v. Colorado Casualty Insurance Co., et al., No. 15-1369. 10th Cir.; 2016 U.S. App. LEXIS 15925).
Expert Allowed To Testify On Cause Of Damage To Golf Courses From Ice, Judge Says
DETROIT - An expert for three insured golf courses may testify that the weight of ice killed the turfgrass by prohibiting a gaseous exchange by the turfgrass, leading to anoxia, a Michigan federal judge held Aug. 30, declining to exclude the testimony because the expert provided documentation (Bloomfield Hills Country Club, et al. v. The Travelers Property Casualty Company of America, et al., No. 15-11290, E.D. Mich.; 2016 U.S. Dist. LEXIS 116172).
Judge Bars Partial Testimony On Floodplain Location In Insurance Coverage Dispute
DETROIT - A Michigan federal judge on Aug. 26 excluded partial testimony in an insurance coverage dispute on the remaining issue as to whether an insured's property was located within a 100-year floodplain at the time of its loss (Federal-Mogul Corp. v. Insurance Company of the State of Pennsylvania, No. 12-12005, E.D. Mich.; 2016 U.S. Dist. LEXIS 114573).
Judge: Attorney Fee Award Sends Message That Bad Faith Denials Will Not Be Tolerated
ELIZABETH CITY, N.C. - A North Carolina federal judge on Aug. 23 found that insureds' request of $63,962.50 in attorney fees is reasonable, reiterating that a Hurricane Irene coverage dispute is a rare instance of a bad faith denial for which the important goal of sending a strong message that bad faith denials will not be tolerated is best served by awarding atypical attorney fees (Gary Woodson, et al. v. Allstate Insurance Co., No. 13-21, E.D. N.C., Northern Div.; 2016 U.S. Dist. LEXIS 112098).
Florida Panel Conditionally Grants Appellate Attorney Fees In Sinkhole Dispute
LAKELAND, Fla. - The Second District Florida Court of Appeal on Aug. 17 vacated a June 10 order that denied insureds' amended motion for appellate attorney fees in a sinkhole coverage dispute and entered an order that grants their motion for appellate attorney fees conditioned upon their prevailing in the lower court (Wayne Allen v. State Farm Florida Insurance Co., No. 2D15-3114, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 12381).
Federal Judge: Fact Issues Exist As To Breach Of Contract, Bad Faith Claims
OKLAHOMA CITY - An Oklahoma federal judge on Aug. 16 found that a genuine dispute of material fact precludes summary judgment in favor of a homeowners insurer on insureds' claims for breach of contract and bad faith in a dispute over coverage for tornado damage, denying the insurer's motion for summary judgment in part (Nathaniel Neill, et al. v. State Farm Fire and Casualty Co., et al., No. 13-627, W.D. Okla.; 2016 U.S. Dist. LEXIS 108368).
ExxonMobil Argues It Is An Additional Insured Under Contractor's Policy
NEW ORLEANS - A contractor's general liability policy extends to ExxonMobil Corp. and covers a settlement reached by ExxonMobil after a subcontractor was injured on ExxonMobil's site, and Exxon is owed attorney fees incurred during post-trial briefing after prevailing on its breach of contract claim against its contractor, ExxonMobil tells the Fifth Circuit U.S. Court of Appeals in a recent appellee brief (ExxonMobil Corporation v. Electrical Reliability Services, Inc., et al., No. 15-20751, 5th Cir.).
NFIA Does Not Preempt Policy Procurement Claims, 6th Circuit Says In Reversal
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Aug. 8 found that the National Flood Insurance Act (NFIA) does not preempt insureds' state law claims to the extent that they arise solely from the process of procuring a federal flood insurance policy, reversing a lower federal court in part in a dispute arising from flood damage (Michael H. Harris, et al. v. Nationwide Mutual Fire Insurance Company, et al., No. 15-6132, 6th Cir.; 2016 U.S. App. LEXIS 14501).
Panel Upholds $115,279 Judgment Against Flood Insurer In Hurricane Isaac Dispute
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Aug. 1 upheld a federal district court's $115,279.33 judgment in favor of a mortgage lender and against a force-placed flood insurer in a dispute arising from Hurricane Isaac damage (Alfred Cotton, et al. v. Certain Underwriters at Lloyd's of London, No. 15-31005, 5th Cir.; 2016 U.S. App. LEXIS 13962).
Insured Filed Superstorm Sandy Claim 11 Days Too Late, Federal Judge Rules
CAMDEN, N.J. - A New Jersey federal judge on July 14 held that the one-year statute of limitations under the National Flood Insurance Act (NFIA) was triggered on the date an insurer mailed its denial letter and not on the date the insured received the denial letter, finding that the insured filed his claim for Superstorm Sandy damage to his beach house 11 day too late (John Cholankeril Jr. v. Selective Insurance Company of America, No. 15-3269, D. N.J.; 2016 U.S. Dist. LEXIS 91457).
Judge Certifies Class In Hailstorm Coverage Suit Challenging Insurance Practices
KANSAS CITY, Mo. - A Missouri federal judge on Aug. 1 granted insureds' motion to certify a class in a lawsuit alleging that their homeowners insurer unlawfully applied a policy's $1,000 deductible to an actual cash value (ACV) payment in a hailstorm coverage dispute (Eric Lafollette v. Liberty Mutual Fire Insurance Co., No. 14-04147, W.D. Mo.; 2016 U.S. Dist. LEXIS 99980).
Judge Denies Insured's Motion To Set Aside Appraisal Award In Hailstorm Dispute
SHERMAN, Texas - A Texas federal judge on July 29 denied an insured's motion to set aside a $2,420.78 appraisal award in a hailstorm coverage dispute, finding that insured has not met his burden of establishing that the award was made as a result of mistake (Ronald Studer v. State Farm Lloyds, No. 13-413, E.D. Texas; 2016 U.S. Dist. LEXIS 99883).
10th Circuit Says It Does Not Have Jurisdiction Over Appeal In Appraisal Dispute
DENVER - The 10th Circuit U.S. Court of Appeals on July 19 held that it does not have appellate jurisdiction over a federal district court's nonfinal order denying confirmation of a $208,445.57 appraisal award in a hailstorm damage coverage dispute (KCOM Inc. v. Employers Mutual Casualty Co., No. 15-1218, 10th Cir.; 2016 U.S. App. LEXIS 13171).
5th Circuit Rejects Argument That Tornado Loss Is 'Nothing' For Coverage Purposes
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on July 21 rejected an insurer's argument that its owes nothing to the University of Southern Mississippi Alumni Association (USMAA) for tornado damage to a building it leases from the University of Southern Mississippi (USM) because others paid for USMAA's loss (Southern Insurance Co. v. Affiliated FM Insurance Co., et al., No. 15-60472, 5th Cir.; 2016 U.S. App. LEXIS 13350).
South Dakota Majority Reverses No Coverage Ruling For Cattle Killed In Winter Storm
PIERRE, S.D. - A majority of the South Dakota Supreme Court on July 20 reversed a lower court's ruling that an insurer has no duty to indemnify its insureds for their loss of 93 cattle during winter storm Atlas, finding that the insurance policy's drowning provision is ambiguous (Richard Papousek v. De Smet Farm Mutual Insurance Company of South Dakota, No. 27658, S.D. Sup.; 2016 S.D. LEXIS 93).
11th Circuit Affirms Ruling In Insurer's Favor In Tropical Storm Debby Dispute
ATLANTA - The 11th Circuit U.S. Court of Appeals on July 19 rejected a motel owner insured's argument that a lower court misinterpreted an insurance policy and erred by discounting the insured's proffered evidence, affirming the lower court's ruling in favor of the insurer in a Tropical Storm Debby coverage dispute (Divine Motel Group LLC, d.b.a. Royal Inn v. Rockhill Insurance Co., No. 15-13020, 11th Cir.; 2016 U.S. App. LEXIS 13152).
Florida Panel Affirms Court's Denial Of Insured's Motion For Attorney Fees
LAKELAND, Fla. - A Florida appeals panel on July 15 held that although a lower court denial of insured's motion for attorney fees in a sinkhole coverage dispute was based on two statutory misinterpretations, there is ample basis in the record to affirm (Christopher Shane Miller v. Florida Insurance Guaranty Association Inc., et al., No. 2D15-1350, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 10868).
Insured Won't Present Evidence, Testimony In Making Bad Faith Claim, Judge Rules
HATTIESBURG, Miss. - A federal judge in Mississippi on July 18 granted three motions in limine filed by an insurer in an insurance breach of contract and bad faith lawsuit, precluding an insured from presenting evidence, damages testimony and other testimony to show that the insurer acted in bad faith in conducting an investigation into a claim for coverage under a commercial property insurance policy (JCKP LLC v. Berkley Regional Specialty Insurance Co, et al., No. 14-0117, S.D. Miss.; 2016 U.S. Dist. LEXIS 93049).
Insureds Failed To Plead Bad Faith, Breach Of Contract, Judge Rules
MCALLEN, Texas - Summary judgment in an insurance breach of contract and bad faith lawsuit is proper because insureds have failed to state a claim for relief against their insurer, a federal judge in Texas ruled July 8 (Carlos Amalio Reyna, et al. v. State Farm Lloyds, et al., No. 14-420, S.D. Texas; 2016 U.S. Dist. LEXIS 89056).
5th Circuit Affirms Ruling In Insurer's Favor In Hurricane Ike Coverage Dispute
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on July 7 affirmed a lower court's ruling in favor of a commercial property insurer in a breach of contract and bad faith dispute arising from Hurricane Ike damage to the insured's daycare center and warehouse (Steve Quibodeaux and the Kids Safari Inc., d/b/a Wee Care Childcare and Preschool v. Nautilus Insurance Co., No. 15-40567, 5th Cir.).
3rd Circuit Affirms Dismissal Of Claims In Hurricane Irene Flood Coverage Dispute
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on June 16 affirmed a lower federal court's ruling that dismissed an insured's breach of contract, fraud and misrepresentation claims against its federal flood insurer over its alleged personal property damage caused by Hurricane Irene (Psychiatric Solutions, Inc. v. Federal Emergency Management Agency, et al., No. 15-2923, 3rd Cir.; 2016 U.S. App. LEXIS 10894).
Florida Panel Reverses Ruling In Part In Sinkhole Coverage Dispute
LAKELAND, Fla. - A Florida appeals panel held July 6 that a lower court erred in awarding $233,610.02 in damages payable directly to insureds without regard for an insurance policy's loss settlement provision as to subsurface repair, reversing the lower court's ruling in part (Citizens Property Insurance Corp. v. James Stieben, et al., No. 2D14-4412, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 10296).
Florida Panel Reverses Ruling In Part In Coverage Dispute Over Sinkhole Damage
LAKELAND, Fla. - A Florida appeals panel on June 24 reversed part of a lower court's final judgment that requires an insurer to pay $100,000 for subsurface repairs of sinkhole damage before its insureds execute a contract with a third party for those repairs, also reversing the lower court's award of prejudgment interest on the subsurface damages award (Citizens Property Insurance Corp. v. Edgardo Nunez, et al., No. 2D14-3712, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 9693).
Florida Panel Again Reverses Ruling As To Subsurface Repairs In Sinkhole Dispute
LAKELAND, Fla. - For the second time in a week, the Second District Florida Court of Appeal on June 17 held that a lower court erred in awarding monetary damages to insureds for subsurface repairs in a sinkhole coverage dispute without requiring them to enter into a contract for the repairs, reversing in part (Citizens Property Insurance Corp. v. Bambi Retz, No. 2D14-5856, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 9345).
Panel Quashes Order Requiring Insureds To Disclose Financial Terms Of Settlement
LAKELAND, Fla. - A Florida appeals panel on June 10 quashed a lower court's order that required insureds to disclose their financial information regarding their settlement agreement with their homeowners insurer in a sinkhole coverage dispute (Wayne Allen and Susan Allen v. State Farm Florida Insurance Co., No. 2D15-3114, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 8941).
Florida Panel Reverses Ruling As To Subsurface Repairs In Sinkhole Coverage Suit
LAKELAND, Fla. - A Florida appeals panel on June 10 reversed the part of a lower court's final judgment that required an insurer to pay for subsurface repairs for sinkhole damage before the insureds contracted to make those repairs (Citizens Property Insurance Corp. v. Idelfonso Bolano Duenas, et al., No. 2D14-3858, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 8922).
Texas Panel Affirms Jury's Verdict Against Insurer In Wind Coverage Dispute
HOUSTON - A Texas appeals panel on June 30 found that an insurer breached the policy when it refused to cover the physical loss to an insured's roof that was caused by a wind event, affirming a jury's award of $12,878 for damages and $70,000 for attorney fees (State Farm Lloyds v. Ginger Hanson, No. 14-15-00093, Texas App., 14th Dist.; 2016 Tex. App. LEXIS 6937).
Insurer Did Not Waive Appraisal Condition, California Panel Affirms
SAN JOSE, Calif. - A California appeals panel on June 27 affirmed that an insurer did not waive an insurance policy's appraisal condition and that the appraisal condition can be applied to preclude underlying claims arising from windstorm damage to a mobile home (Gordon Blackwell v. Foremost Insurance Co., No. H042263, Calif. App., 6th Dist.; 2016 Cal. App. Unpub. LEXIS 4749).
5th Circuit: District Court Did Not Err When Denying Review Request
NEW ORLEANS - The federal judge in Louisiana overseeing litigation stemming from the oil spill in the Gulf of Mexico following the explosion of the Deepwater Horizon oil rig in April 2010 did not err when refusing to consider a car dealership's request to review whether the claims administrator presiding over the Court Supervised Settlement Program (CSSP) abused his discretion when finding that it was not a start-up business, a Fifth Circuit U.S. Court of Appeals panel ruled July 11 (Holmes Motors Inc. v. BP Exploration & Production Inc., et al., No. 15-30860, 5th Cir.).
Panel: Fact Issues Exist For Breach Of Contract Claim But Not Elder Abuse Claim
LOS ANGELES - A California appeals panel on June 27 found that triable issues of fact require reversal of a lower court's dismissal of a breach of contract claim against an insurer, further holding that the insureds' bad faith and elder abuse claims cannot survive under the genuine dispute doctrine (Clayton D. Paslay, et al. v. State Farm General Insurance Co., No. B265348, Calif. App., 2nd Dist., Div. 4; 2016 Cal. App. LEXIS 511).
Judge: Insured Has No 'Single Valid Excuse' For Failing To Provide Prompt Notice
BRONX, N.Y. - A New York judge on June 28 found that an insured breached the conditions of its insurance policy by failing to provide its insurer with prompt notice of a property damage claim and by failing to preserve the purported damaged property for inspection (TV Realty LLC v. Tower Insurance Company of New York, No. 306589/2013, N.Y. Sup., Bronx Co.).
Judge Denies Motion To Remand In Insurance Bad Faith Lawsuit
OKLAHOMA CITY - A federal judge in Oklahoma on June 29 denied a motion to remand an insurance breach of contract and bad faith lawsuit to state court, ruling that an insurer has met its burden of showing that the court has jurisdiction by a "preponderance of the evidence" (Steven Daniels, et al. v. Safeco Insurance Company of America, No. 16-360, W.D. Okla.; 2016 U.S. Dist. LEXIS 84315).
Federal Magistrate Recommends Superstorm Sandy Coverage Suit Be Dismissed
CENTRAL ISLIP, N.Y. - A federal magistrate in New York on June 28 said insureds' repeated failure to comply with court orders warrants dismissal of a coverage dispute over Superstorm Sandy damage, finding that no sanction less than dismissal will alleviate the insurer's prejudice in keeping the case open (Sally Hassanein, et al. v. The Standard Fire Insurance Co., No. 14-2470, E.D. N.Y.; 2016 U.S. Dist. LEXIS 84929).
Ruling Did Not Create New Standard For All Flood Policies, Delaware Judge Says
WILMINGTON, Del. - A Delaware judge on June 20 denied a commercial general liability insurer's request for certification of interlocutory appeal of a Jan. 27 ruling involving what falls under a policy's $25 million flood sublimit in a Superstorm Sandy coverage dispute (Almah LLC, et al. v. Lexington Insurance Co., No. N15C-01-237 EMD, Del. Super.).
Insureds' Breach Of Contract, Bad Faith Claims Not Actionable, Judge Rules
McALLEN, Texas - An insurer's prompt payment of an appraisal award in a homeowners insurance dispute estops the insureds from bringing a claim for breach of contract, and as a result, their extracontractual claims are inactionable under Texas law, a federal judge in Texas ruled June 20 (Daniel Gutierrez, et al. v. State Farm Lloyds, et al., No. 14-430, S.D. Texas; 2016 U.S. Dist. LEXIS 79665).