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Headline Catastrophic Loss Legal News from LexisNexis®
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.).
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).