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Headline Catastrophic Loss Legal News from LexisNexis®
10th Circuit: Court Properly Vacated Order Confirming Appraisal Award, Judgment
DENVER - A commercial property insurer's voluntary payment of an appraisal award and the insured's acceptance of the payment settled any dispute over the amount of storm loss to the insured's property, the 10th Circuit U.S. Court of Appeals ruled Jan. 4, affirming a lower court's decision to vacate an order confirming the appraisal award and a judgment in favor of the insured (In re: Appointment of Umpire for Hayes Family Trust, on behalf of itself and all others similarly situated, Clayton A. Hayes, cotrustee v. State Farm Fire & Casualty Co., No. 15-6164, 10th Cir.; 2017 U.S. App. LEXIS 81).
Nebraska High Court: Post-Loss Assignment Of Claim Is Valid Despite Clause
LINCOLN, Neb. - Finding that an insured's post-loss assignment of a property damage claim to a roofing company under a homeowners insurance policy is valid despite the policy's nonassignment clause, the Nebraska Supreme Court on Dec. 30 affirmed a lower court's $5,252.66 judgment against the insurer in a dispute over roof damage (Millard Gutter Co. v. Farm Bureau Property & Casualty Insurance Co., No. S-15-912, Neb. Sup.; 2016 Neb. LEXIS 187).
Judge: Plaintiff Lacks Standing, Preempted From Pursuing Racketeering Claim
NORFOLK, Va. - A Virginia federal judge on Jan. 3 held that a restoration company has no standing to pursue a claim under the Racketeer Influenced and Corrupt Organizations Act, further finding that the National Flood Insurance Act (NFIA) preempts the company from pursuing its lawsuit against a federal flood insurer and seven other defendants (Slay's Restoration LLC v. Wright National Flood Insurance Co., No. 15-140, E.D. Va.; 2017 U.S. Dist. LEXIS 1490).
9th Circuit Affirms Ruling In Insurer's Favor In Suit Arising From Oregon Flood
SEATTLE - The Ninth Circuit U.S. Court of Appeals on Dec. 23 found that an insured failed to raise a genuine dispute of material fact as to whether he submitted the required proof of loss under his standard flood insurance policy (SFIP), affirming a lower court's ruling in favor of the insurer in a coverage dispute arising from the January 2009 flooding of Oregon's Clackamas River (Gunnar H. Mertz, et al. v. American Family Ins., No. 14-35257, 9th Cir.; 2016 U.S. App. LEXIS 23226).
Panel: There Can Be No Estoppel Of Flood Policy's Proof-Of-Loss Requirement
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Dec. 6 affirmed a lower federal court's ruling in favor of a federal flood insurer and an insurance broker in a dispute over coverage following a heavy rainfall, rejecting the insureds' argument that the insurer is estopped from alleging that their proof of loss is inadequate (James Miller, et al. v. American Strategic Insurance Corp., et al., No. 16-30251, 5th Cir.; 2016 U.S. App. LEXIS 21731).
Coverage Dispute Arising From Storm Surge Was Not Timely Filed, Federal Judge Says
LOS ANGELES - A California federal judge on Dec. 21 granted a federal flood insurer's motion to dismiss an insured's breach of contract lawsuit, finding that the action was not filed in federal court within the one-year statute of limitations required by the Standard Flood Insurance Policy (SFIP) (Judd Apatow v. American Bankers Insurance Company of Florida, et al., No. 16-198, C.D. Calif.; 2016 U.S. Dist. LEXIS 180529).
Judge: Unambiguous Policy Language Shows Insurer Did Not Act In Bad Faith
COLUMBIA, S.C. - The term "flood" in a homeowners insurance policy is not ambiguous under South Carolina law and, as a result, an insurer did not breach its contract or act in bad faith in denying coverage under the policy because it contained a water damage exclusion that precluded coverage for the damages insureds sought, a federal judge in South Carolina ruled Dec. 29 in granting the insurer's motion for judgment on the pleadings (Stephen F. Morris, et al. v. Auto-Owners Insurance Co., No. 16-0880, D. S.C.; 2016 U.S. Dist. LEXIS 179715).
Insured's Claim Precluded By Flood Exclusion, Judge Rules In Bad Faith Suit
COLUMBIA, S.C. - An insurer did not act in bad faith in denying coverage under a homeowners insurance policy because an insured's claim for coverage was precluded by a flood damage exclusion in the policy, a federal judge in South Carolina ruled Dec. 29 in granting the insurer's motion for judgment on the pleadings (Rachel Todd v. Auto-Owners Insurance Co., No. 16-0883, D. S.C.; 2016 U.S. Dist. LEXIS 179711).
Judge: Fact Issues Preclude Ruling As To Policy Exclusion, Alleged Bad Faith
NEW ORLEANS - A Louisiana federal judge on Dec. 28 denied a homeowners insurer's motion for summary judgment in an insured's lawsuit alleging that the insurer's denial of her claim was arbitrary, capricious and not in good faith (Joyce Twine v. Allstate Insurance Co., No. 15-5168, E.D. La.; 2016 U.S. Dist. LEXIS 179153).
Florida Panel Reverses Ruling In Insurer's Favor In Sinkhole Coverage Dispute
DAYTONA BEACH, Fla. - A Florida appeals panel on Dec. 9 held that a lower court erred in granting summary judgment in favor of a homeowners insurer on the insureds' bad faith lawsuit arising from a sinkhole coverage dispute, reversing and remanding (Sandra Barton And Gregory Barton v. Capitol Preferred Insurance Co. Inc., No. 5D15-1587, Fla. App., 5th Dist.; 2016 Fla. App. LEXIS 18168).
Court Property Bifurcated Claims In Dispute Over Tornado Damage, 5th Circuit Rules
NEW ORLEANS - A federal district court did not abuse its discretion in bifurcating in a lawsuit arising from tornado damage because insureds' extracontractual and punitive damages claims required the same showing on the part of their insurer, but their breach of contract claim did not, a Fifth Circuit U.S. Court of Appeals panel ruled Dec. 13 in an unpublished per curiam opinion (Edward and Rebecca Briggs v. State Farm, No. 16-60098, 5th Cir.; 2016 U.S. App. LEXIS 22101).
Federal Judge: Bad Faith Claim Arising From Hailstorm Damage Lacks Factual Support
OKLAHOMA CITY - An insured's insurance bad faith counterclaim in a hailstorm coverage dispute was dismissed Dec. 5 after a federal judge in Oklahoma ruled that the insured failed to provide any facts to support it (Employers Mutual Casualty Co. v. W-W Trailer Manufacturers, d/b/a W.W. Trailer Manufacturing, No. 16-995, W.D. Okla.; 2016 U.S. Dist. LEXIS 167362).
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.).