Preview: LexisNexis® Mealey's™ Catastrophic Loss
LexisNexis® Mealey's™ Catastrophic Loss
Headline Catastrophic Loss Legal News from LexisNexis®
Supreme Court Finds No Dismissal Mandate For False Claims Act Seal Violations
WASHINGTON, D.C. - In a unanimous ruling, the U.S. Supreme Court on Dec. 6 held that the False Claims Act (FCA) "does not enact so harsh a rule" as mandating dismissal of a relator's lawsuit under the act for a violation of the statute's requirement that the relator's complaint remain sealed, affirming a ruling of the Fifth Circuit U.S. Court of Appeals (State Farm Fire & Casualty Co. v. United States, ex rel. Cori Rigsby, et al., No. 15-513, U.S. Sup.; 2016 U.S. LEXIS 7420).
Court Erred In Rejecting Concurring Cause Doctrine, Majority Says, Quashes Order
TALLAHASSEE, Fla. - A majority of the Florida Supreme Court on Dec. 1 held that an appeals court erred in reversing an $8 million judgment against a homeowners insurer in a coverage dispute over alleged property damage caused by construction defects, rain and wind, quashing the lower court's opinion and remanding to apply the concurring cause doctrine (John Robert Sebo v. American Home Assurance Co. Inc., No. 14-897, Fla. Sup.; 2016 Fla. LEXIS 2596).
5th Circuit: Franchisors Cannot Seek Lost Royalties Under BP Settlement
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Dec. 1 affirmed a federal judge in Louisiana's ruling that three franchisors that are not based in the Gulf of Mexico cannot seek to obtain lost franchisee royalties during the oil spill in the Gulf of Mexico following the explosion of the Deepwater Horizon oil rig, finding that they are not included in the terms of the economic and property damages settlement agreement (Claimant ID 100197593, et al. v. BP Exploration & Production Inc., et al., No. 16-30283, 5th Cir.).
Exception To Policy Provision Does Not Apply In Oil Spill Coverage Dispute, Panel Says
BEAUMONT, Texas - An exception to a policy's joint venture provision does not apply to provide coverage to an insured seeking coverage for damages incurred as a result of the Deepwater Horizon Oil Spill in the Gulf of Mexico because a monetary judgment was not entered against the insured as required by the provision's second exception, the Ninth District Texas Court of Appeals said Nov. 17 in reversing a trial court's ruling (Houston Casualty Co., et al., v. Anadarko Petroleum Corp., et al., No. 09-14-00459, Texas App., 9th Dist.; 2016 Tex. App. LEXIS 12354).
5th Circuit Affirms Claims Against Insurer In Hailstorm Dispute Are Time-Barred
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Nov. 30 affirmed a lower federal court's finding that a Texas insured's breach of contract and extracontractual claims against her insurer are barred by the applicable two-year statute of limitations (Vada De Jongh v. State Farm Lloyds Inc., No. 15-20522, 5th Cir.; 2016 U.S. App. LEXIS 21432).
Louisiana Majority Affirms Ruling In Insurer's Favor In Bad Faith Dispute
SHREVEPORT, La. - A majority of a Louisiana appeals panel on Nov. 23 affirmed a lower court's dismissal of insureds' bad faith claim against their homeowners insurers, finding no error in the trial court's conclusion that the insurer was more than reasonable in how it adjusted the insurance claim (Sheila Cooper wife of/and James Cooper v. Farmers Insurance Exchange, No. 50,978-CA, La. App., 2nd Cir.; 2016 La. App. LEXIS 2142).
Judge Finds Appraisal Clause Binds Insured From Litigating Dispute Over Money
CHICAGO - An appraisal clause's use of the word, "binding" made clear to an insured that by participating in the appraisal process, it foreclosed its opportunity to litigate the amount an insurer owed it for damage to a building covered by the insurance policy, an Illinois federal judge ruled Nov. 7, dismissing a breach of contract claim (70th Court Condo Association v. Ohio Security Insurance Co. and Donan Engineering Co. Inc., No. 16-07723, N.D. Ill.; 2016 U.S. Dist. LEXIS 153959).
Justice: Flood Exclusion Bars Coverage For Water Event That Caused Property Damage
NEW YORK - A New York justice on Nov. 22 held that a commercial property insurance policy's flood exclusion bars coverage for an insured's property damage caused by storm surge resulting from Superstorm Sandy, granting the insurer's motion for summary judgment (Five Towns Nissan LLC v. Universal Underwriters, et al., No. 651164/2013, N.Y. Sup., New York Co.; 2016 N.Y. Misc. LEXIS 4347).
Insurer's Evidence 'Overwhelms' Insured's Wind Argument, New York Justice Rules
MINEOLA, N.Y. - A New York justice on Nov. 4 dismissed an insured's breach of contract and bad faith lawsuit against its insurer in a Superstorm Sandy coverage dispute, finding that the evidence demonstrates that the damage to the insured's two Inwood, N.Y., buildings pre-existed the storm or was the result of flooding from it, which is excluded from coverage (Five Towns Mason Materials, Inc. v. Hermitage Ins. Co., No. 603021/2013, N.Y. Sup., Nassau Co.).
Florida Panel Affirms Ruling In Insurer's Favor In Breach Of Contract Dispute
MIAMI - A Florida appeals panel on Nov. 23 affirmed a lower court's ruling in favor of a homeowners insurer in a breach of contract dispute arising from the insureds' water damage claim (Ronald Reddy and Yolanda Reddy v. State Farm Florida Insurance Co., No. 3D16-512, Fla. App., 3rd Dist.; 2016 Fla. App. LEXIS 17494).
Judge: Fact Issue, Insufficient Evidence Preclude Ruling In Flood Coverage Dispute
BOSTON - A Massachusetts federal judge on Nov. 17 denied dueling motions for summary judgment in a dispute over excess federal flood insurance coverage for the loss of a vacation home after a storm hit the Town of Nantucket, Mass., in March 2013 (Samuel J. Furrow, eta l. v. Wright National Flood Insurance Co., et al., No. 14-10497, D. Mass.; 2016 U.S. Dist. LEXIS 159547).
Texas High Court Postpones Oral Argument In Discovery Dispute Over Attorney Fees
AUSTIN, Texas - Two days before oral argument was scheduled to begin in a dispute over discovery requests concerning relators' attorney fees in a multidistrict litigation hailstorm property damage coverage dispute, the Texas Supreme Court reset oral argument for Feb. 7, according to a Nov. 8 pronouncement (In Re National Lloyds Insurance Co., Wardlaw Claims Service Inc. and Ideal Adjusting Inc., No. 15-0591, Texas Sup.).
Texas High Court: Discovery Order Was Not Tailored To Time, Place Or Subject Matter
AUSTIN, Texas - The Texas Supreme Court on Oct. 28 held that a pretrial court's discovery order in a hailstorm coverage dispute was overbroad because it was not tailored with regard to time, place or subject matter, directing the lower court to vacate the part of its order compelling production of management reports and emails and re-evaluate the issue of sanctions against the insurer (In re National Lloyds Insurance Company, Relator, No. 15-0452, Texas Sup.; 2016 Tex. LEXIS 963).
Recently Certified Class Moves For Summary Judgment In Hailstorm Coverage Dispute
KANSAS CITY, Mo. - Plaintiffs on Oct. 31 moved for summary judgment in a class action alleging that their homeowners insurer committed breach of contract when it 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.).
High Court Hears Arguments Over Sanctions For False Claims Act's Seal Requirement
WASHINGTON, D.C. - The U.S. Supreme Court heard arguments Nov. 1 from an insurer, the relators in a qui tam action against that insurer, and the U.S. government over what the appropriate sanctions should be when relators in a False Claims Act (FCA) suit violate that statute's requirement that the complaint and filings remain sealed (State Farm Fire & Casualty Co. v. United States, ex rel. Cori Rigsby, et al., No. 15-513, U.S. Sup.).
Texas Supreme Court Refuses To Revisit Ruling In Inverse Condemnation Dispute
AUSTIN, Texas - The Texas Supreme Court on Oct. 21 denied a motion to rehear its finding that homeowners in the upper White Oak Bayou watershed area of Texas have demonstrated that a fact question exists as to whether government entities were substantially certain that their actions in approving new upstream development without properly mitigating it would cause the homes to flood, according to its orders pronounced list (Harris County Flood Control District and Harris County, Texas v. Edward A. and Norma Kerr, et al., No. 13-0303, Texas Sup.).
Florida Supreme Court Affirms Panel's Reversal Of $130,600 Appraisal Award
TALLAHASSEE, Fla. - The Florida Supreme Court on Oct. 20 held that insureds' claim for sinkhole damage is governed by the definition of "covered claim'" in Section 631.54(3), Florida Statutes, that was effective May 17, 2011, affirming an appeals court's reversal of a lower court's order confirming a $130,600 appraisal award against the Florida Insurance Guaranty Association (FIGA) (Leandro de la Fuente, et al. v. FIGA, No. SC15-519, Fla. Sup.).
Florida Panel Reverses Ruling In Insurer's Favor In Sinkhole Coverage Dispute
DAYTONA BEACH, Fla. - A Florida appeals panel on Oct. 21 reversed and remanded a lower court's ruling in favor of an insurer in a sinkhole coverage dispute, noting that the lower court relied on binding precedent that has since been disapproved by the Florida Supreme Court (Marcial Garcia, et al. v. Tower Hill Signature Insurance Company, No. 5D15-1628, Fla. App., 5th Dist.; 2016 Fla. App. LEXIS 15695).
Florida Panel Grants Motion To Enforce Mandate In Sinkhole Coverage Dispute
LAKELAND, Fla. - A Florida appeals panel on Oct. 14 granted a property insurer's motion to enforce a mandate ordering a lower court to enter final judgment in its favor in a sinkhole coverage dispute (Florida Peninsula Insurance Co. v. Maricela Cespedes, No. 2D12-4575, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 15238).
Judge Refuses To Dismiss Broker Malpractice Claims Arising From Superstorm Sandy
NEW BRUNSWICK, N.J. - Applying New York law, a New Jersey judge on Oct. 6 denied an insurance broker's motion to dismiss a claim that he breached his professional duty in a lawsuit stemming from the insured's alleged $1,567,044 in damages caused by Superstorm Sandy (Fox Paper, Ltd. v. Hanover Insurance Co., et al., No. MID-L-2818-16, N.J. Super., Law Div., Middlesex Co.; 2016 N.J. Super. Unpub. LEXIS 2234).
Judge: Insureds Proffered Enough Evidence Of Damage Caused By Flood-Related Erosion
CAMDEN, N.J. - A federal judge on Oct. 11 found that a reasonable fact finder could find that New Jersey insureds' property sustained losses that resulted from flood-related erosion, denying the insurer's motion for summary judgment in a breach of contract lawsuit arising from Superstorm Sandy (Harry Elwell, et al. v. Selective Insurance Company of America, No. 14-2590, D. N.J.; 2016 U.S. Dist. LEXIS 140515).
Insured Claims Carrier Wrongfully Denied Coverage For Roof's Collapse
CHICAGO - An insured seeking coverage for the collapse of its roof following a snowstorm alleges in a Nov. 3 complaint filed in Illinois federal court that its insurer breached its contract and acted in bad faith by denying coverage based on the policy's imminent collapse exclusion (Ravinia Vogue Cleaners v. Travelers Casualty Insurance Company of America, No. 16-10311, N.D. Ill.).
Solicitor General To Argue In High Court Case On False Claims Act Seal Violations
WASHINGTON, D.C. - In its Oct. 11 order list, the U.S. Supreme Court granted a motion by Acting U.S. Solicitor General Ian Heath Gershengorn to participate in upcoming oral arguments over what the appropriate sanctions are when a private qui tam lawsuit plaintiff violates a seal order under the False Claims Act (FCA) (State Farm Fire & Casualty Co. v. United States, ex rel. Cori Rigsby, et al., No. 15-513, U.S. Sup.; 2016 U.S. LEXIS 6149).
Judge: Lack Of Question Of Federal Law Requires Remand Of Bad Faith Suit
JACKSON, Miss. - Remand of an insurance breach of contract and bad faith lawsuit to state court is proper because an insurer failed to show that a substantial question of federal law exists, a federal judge in Mississippi ruled Oct. 9 (State of Mississippi, ex. rel. Jim Hood, Attorney General for the State of Mississippi, v. State Farm Fire and Casualty Co., No. 15-374, S.D. Miss.; 2016 U.S. Dist. LEXIS 140218).
Dispute Over Insurer's Probe Of Wind Damage Claim Before Texas High Court
AUSTIN, Texas - The Texas Supreme Court was scheduled to hear oral argument Oct. 11 on an insurer's request to decide whether a trial court properly awarded an insured more than $150,000 after a jury found that the insurer complied with the policy at issue with respect to a hurricane wind damage claim but failed to conduct a reasonable investigation, according to a Sept. 2 order granting review of the case (USAA Texas Lloyds Co. v. Gail Menchaca, No. 14-0721, Texas Sup.).
Florida Majority Quashes Ruling, Says Court Misapplied, Misinterpreted Statutes
TALLAHASSEE, Fla. - A majority of the Florida Supreme Court held Sept. 29 that an appellate court misapplied a statutory presumption of correctness and incorrectly found that another statute requires a showing of bad faith for an insured to recover attorney fees, quashing and remanding the appellate court's ruling in a sinkhole coverage dispute (Kathy Johnson v. Omega Insurance Co., No. SC14-2124, Fla. Sup.; 2016 Fla. LEXIS 2148).
No Collapse; No Coverage, New York Justice Rules In Breach Of Contract Dispute
WHITE PLAINS, N.Y. - A New York justice on Sept. 30 granted a commercial property insurer's motion for summary judgment in a breach of contract lawsuit filed by its insured, finding that the insured's loss failed to constitute a collapse necessary to trigger coverage under the policy (HB Holdings & Realty Management LLC d/b/a Balsamo Holdings Corp., et al. v. Tower Insurance Company of NewYork, No. 56804/2015, N.Y. Sup., Westchester Co.).
Judge: Absent 'Moses-Like Parting Of Water,' Expert Opinion Is 'Highly Improbable'
JAMAICA, N.Y. - A New York justice on Sept. 22 granted a homeowners insurer's motion for summary judgment in insureds' breach of contract lawsuit, finding that because flooding caused damage to the insureds' Breezy Point, N.Y., vacation home during Superstorm Sandy, coverage is barred (Joseph Brady and Anne Bernadette Brady v. Tower Group Companies, et al., No. 14938/2014, N.Y. Sup., Queens Co.).
Magistrate Recommends Summary Judgment In Insurer's Favor In Superstorm Sandy Suit
BROOKLYN, N.Y. - Concluding that the owner of a Brooklyn shopping center failed to file a timely proof of Superstorm Sandy loss, a New York federal magistrate judge on Sept. 28 recommended that the insurer's motion for summary judgment be granted in a coverage dispute arising from the storm (2027, LLC v. Aspen American Insurance Co., No. 14-6751, E.D. N.Y.; 2015 U.S. Dist. LEXIS 181604).
Remodelers' Lawsuit Against Federal Flood Insurer Cannot Survive, Judge Rules
NASHVILLE, Tenn. - A Tennessee federal judge on Sept. 20 granted a federal flood insurer's motion to dismiss a breach of contract, unjust enrichment, fraudulent inducement and intentional and negligent misrepresentation lawsuit against it, finding that the claims are preempted by federal law (D&S Remodelers Inc. v. Wright National Flood Insurance Services LLC, et al., No. 15-59, M.D. Tenn., Nashville Div.; 2016 U.S. Dist. LEXIS 128135).
Federal Judge: Fact Issues As To Material Breach Preclude Summary Judgment Ruling
PITTSBURGH - A Pennsylvania federal judge on Sept. 29 granted in part and denied in part dueling motions for summary judgment filed by a glass manufacturer insured, an insurer and a reinsurer in a coverage dispute over property damage and business interruption losses arising from the insured's equipment breakdown (The Hartford Steam Boiler Inspection and Insurance Co., et al. v. International Glass Products LLC, et al., No. 08-1564, W.D. Pa.; 2016 U.S. Dist. LEXIS 135045).
Carrier Owes No Coverage For Underlying Tort Actions, New York Justice Says
NEW YORK - A New York justice on Sept. 19 determined that an insurer has no duty to defend a number of entities named as defendants in underlying suits alleging personal injuries caused by exposure to toxic materials during cleanup activities in the wake of the Sept. 11, 2001, terrorist attacks on the World Trade Center because the entities were not additional insureds under the policies at issue (Taunus Corp., n/k/a DB USA Corp., et. al. v. Zurich American Insurance Co., No. 652275/2011, N.Y. Sup., New York Co.; 2016 N.Y. Misc. LEXIS 3347).
5th Circuit Affirms Ruling In Insurer's Favor In Dispute Over Roof Repair
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Sept. 13 affirmed a lower federal court's summary judgment ruling in favor of a homeowners insurer in a coverage dispute over repairs to the insured's damaged roof following a hailstorm (Toney v. State Farm Lloyds, et al., No. 14- 40914, 5th Cir.; 2016 U.S. App. LEXIS 16771).
10th Circuit Affirms Ruling In Insurer's Favor In Suit Over Condominium Roof Damage
DENVER - The 10th Circuit U.S. Court of Appeals on Sept. 9 affirmed a lower federal court's summary judgment ruling in favor of an insurer in a condominium association insured and a general contractor's breach of contract and bad faith lawsuit arising from wind and hail damage (Sable Cove Condominium Association, et al. v. Owners Insurance Co., No. 15-1261, 10th Cir.; 2016 U.S. App. LEXIS 16567).
Judge Declines Insurer's Dismissal Motion, Rules That Argument Is Vague
DALLAS - A federal judge in Texas on Sept. 15 denied an insurer's motions to dismiss and for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that the insurer failed to plead, in detail, each of an insured's claims it seeks to dismiss (David Giboney v. Allstate Vehicle and Property Insurance Co., No. 15-3073, N.D. Texas; 2016 U.S. Dist. LEXIS 125440).
Federal Judge Dismisses Breach Of Contract Suit For Failure To Prosecute
LITTLE ROCK, Ark. - An Arkansas federal judge on Sept. 8 dismissed without prejudice an insured's breach of contract lawsuit against her federal flood and homeowners insurers (Linda Lovell Henry v. Wright National Flood Insurance Co., et al., N. 15-00273, E.D. Ark., Western Div.; 2016 U.S. Dist. LEXIS 121317).
Insurer Appeals Attorney Fee Award For Bad Faith Denial Of Hurricane Irene Damage
RICHMOND, Va. - A federal flood insurer on Sept. 6 filed a notice of appeal in the Fourth Circuit U.S. Court of Appeals from a lower court's $63,962.50 attorney fee award in favor of insureds for its bad faith denial of their Hurricane Irene flood damage claim (Gary Woodson, et al. v. Allstate Insurance Co., No. 16-2018, 4th Cir.).