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Preview: LexisNexis® Mealey's™ Insurance Legal News

LexisNexis® Mealey's™ Insurance Legal News

Headline Insurance Legal News from LexisNexis®


Alabama Federal Judge Says No Coverage Provided For Pollution Incident
MOBILE, Ala. - Because a third-party claimant seeking coverage for an environmental contamination lawsuit failed to prove that the environmental damages were unintended, no coverage is afforded under a policy's subsection that provides coverage for unintended pollution incidents caused by transportation activities, an Alabama federal judge said May 15 (Heartland Catfish Co. Inc., et al. v. Navigators Specialty Insurance Co., No. 15-368, S.D. Ala., 2017 U.S. Dist. LEXIS 73795).

Georgia Federal Judge Says Insurer Has No Duty To Defend Underlying Lead Suit
COLUMBUS, Ga. - In granting an insurer's motion to reconsider, a Georgia federal judge on May 15 determined that based on a recent Georgia Supreme Court opinion, the insurer has no duty to defend or indemnify its insured in an underlying action based on the policy's pollution exclusion (Massachusetts Bay Insurance Co. v. Fort Benning Family Communities LLC, et al., No. 15-75, M.D. Ga., 2017 U.S. Dist. LEXIS 76913).

Appeals Panel Says Policy Limits Were Exhausted, No Further Duty To Defend Exists
LOS ANGELES - The Second District California Court of Appeal on May 18 reversed a trial court's judgment in favor of an insured in a silica coverage case after determining that the insured released its right to assert any bad faith claims against the insurer and after finding that the insurer has no further duty to defend the insured because the insurer's policy limits were exhausted in 2013 (Truck Insurance Exchange v. Moldex Metric Inc., et al., No. B272378, Calif. App., 2nd Dist., 2017 Cal. App. Unpub. LEXIS 3485).

Rapid-American, Insurer Both Denied Judgment On Policy's Limits
NEW YORK - A New York federal bankruptcy judge on May 15 declined to award summary judgment to either Chapter 11 debtor Rapid-American Corp. or one of its insurers in a dispute over whether a policy has a $7 million or $14 million limit for asbestos liability claims, saying the policy is too ambiguous to interpret at this stage (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).

3 Insurers End $1.3M Reinsurance State Court Case Over Asbestos Claims
NEW YORK - Three insurers agreed in an April 7 filing to drop their New York state court lawsuit against their reinsurer over $1.3 million in reinsurance proceeds for an underlying settlement of lawsuits involving asbestos and tainted blood-clotting products (Granite State Insurance Co., et al. v. R&Q Reinsurance Co., No. 654494/2013, N.Y. Sup., New York Co.).

Connecticut Federal Judge Says Questions Of Fact Exist In Water, Ice Damage Suit
BRIDGEPORT, Conn. - A Connecticut federal judge on May 17 partially denied an insurer's motion for summary judgment after determining that questions of fact remain regarding whether damage to a freezer floor is barred by the policy's earth movement exclusion (Thurston Foods Inc. v. Wausau Business Insurance Co., No. 15-14, D. Conn., 2017 U.S. Dist. LEXIS 74935).

Panel Orders FIGA To Pay Actual Repair Costs Up To Combined Statutory Cap
LAKELAND, Fla. - On remand, a trial judge should enter a corrected judgment to show that an insured must contract for repairs within damages awarded by a jury and that the Florida Insurance Guaranty Association (FIGA) is required to pay actual repair costs to the contractors up to the combined statutory cap, a Florida appeals panel ruled May 12 (Maria Pupo v. Florida Insurance Guaranty Association, No. 2D15-3901, Fla. App., 2nd Dist., 2017 Fla. App. LEXIS 6775).

Insurer Must Pay For Remediation Services Rendered On Behalf Of Its Insured
OKLAHOMA CITY - An Oklahoma federal judge on May 12 entered judgment against an insurer after determining that the insurer is required to pay for remediation services rendered on behalf of its insured and may seek reimbursement from its insured if it believes the services are not covered under the policy at issue (Environmental Cleanup Inc. v. Ruiz Transport LLC, et al., No. 15-867, W.D. Okla., 2017 U.S. Dist. LEXIS 72707).

Syndicates Seek Arbitration Of Role In Claims Dispute Affecting Reinsurance Billings
BOSTON - A collection of insurance syndicates sued an insurer on April 11 in Massachusetts federal court, seeking to compel arbitration with regard to their involvement in an underlying coverage dispute over environmental claims that would affect reinsurance billings (Certain Underwriters at Lloyd's, London v. Transport Insurance Co., No. 17-10618, D. Mass.).

Insured Appeals Order On Exhaustion Claims Against Solvent, Insolvent Insurers
RICHMOND, Va. - An insured insulation company filed a notice May 2 to the Fourth Circuit U.S. Court of Appeals appealing a partial summary judgment order entered in favor of a number of solvent and insolvent insurers involved in an asbestos coverage dispute after it was determined that the insured's claims regarding the exhaustion of the insurers' policies were not timely filed (General Insurance Company of America and The Walter E. Campbell Co. Inc. v. The Continental Insurance Co., et al., No. 17-1585, 4th Cir.).

Reinsurer, Insurer Breach Of Contract Dispute Stayed Pending Potential Settlement
NEW HAVEN, Conn. - A Connecticut federal judge on May 4 stayed a breach of contract dispute between a reinsurer and insurer so that the parties could pursue a settlement agreement (Travelers Casualty and Surety Co., f/k/a The Aetna Casualty and Surety Co. v. Century Indemnity Co. as successor to Insurance Company of North America, No. 16-cv-170, D. Conn.).

Judge: Cession Statement Is Not Necessary To Establish Reinsurance Agreement
PHILADELPHIA - An insurer adequately alleged a relationship between an insurance policy and a reinsurance contract, even without reference to a cession statement, a Pennsylvania federal judge ruled May 12, denying the reinsurer's motion for judgment on the pleadings on the insurer's breach of contract counterclaim (R&Q Reinsurance Co. v. St. Paul Fire & Marine Insurance Co., No. 16-cv-01473, E.D. Pa., 2017 U.S. Dist. LEXIS 72964).

Federal Judge Denies Motions To Reconsider In Construction Defects Suit
TACOMA, Wash. - A Washington federal judge on May 9 denied motions for reconsideration filed by insurers involved in a construction defects coverage suit after determining that the insurers failed to raise any issues that warrant reconsideration (Eagle Harbour Condominium Association v. Allstate Insurance Co., et al., No. 15-5312, W.D. Wash., 2017 U.S. Dist. LEXIS 70793).

Court Wrongly Refused To Enforce Exclusion In Coverage Dispute, Insurer Says
ATLANTA - An insurance company contends that a federal court erroneously refused to enforce the corrosion exclusion in a policy based on an improper test of causation, and it asks the 11th Circuit U.S. Court of Appeals to reverse the lower court's ruling (IAG LLC v. National Union Fire Insurance Company of Pittsburgh, No. 16-10580, 11th Cir.).

Issues Of Fact Exist In Water, Mold Damage Suit, 10th Circuit Majority Says
DENVER - The majority of the 10th Circuit U.S. Court of Appeals on May 4 agreed with an insured that a Utah federal magistrate judge erred in granting judgment in an insurer's favor because genuine issues of material fact exist regarding whether water and mold damage occurred over an extensive period of time and whether the damage was caused by a sudden and accidental escape of water (Thomas Wheeler v. Allstate Insurance Co., et al., No. 15-4159, 10th Cir., 2017 U.S. App. LEXIS 7954).

Insured Seeks En Banc Rehearing Of 3rd Circuit's Asbestos Exclusion Ruling
PHILADELPHIA - An insured seeking coverage for underlying asbestos-related claims filed against it on May 5 filed a petition for en banc rehearing in the Third Circuit U.S. Court of Appeals, arguing that the appeals panel's finding that a policy's asbestos exclusion is enforceable was in error (General Refractories Company v. First State Insurance Co., et al., No. 15-3409, 3rd Cir.).

Pennsylvania Panel Reverses Judgment Against Insurer In Raw Sewage Coverage Suit
HARRISBURG, Pa.- A Pennsylvania appeals panel on May 1 found that a trial judge erred by reading into the denial of an insurer's motion for summary judgment a legal conclusion that was neither articulated by the ruling judge nor necessary to the denial, reversing and remanding a judgment against the insurer to determine whether a water-damage exclusion barred coverage for insureds' raw sewage claim (Howard Windows Jr. and Eleanor Windows v. Erie Insurance Exchange, No. 362 WDA 2016, Pa. Super., 2017 Pa. Super. LEXIS 309).

California Federal Judge Allows Counterclaims In Sewage Spill Coverage Suit
LOS ANGELES - A California federal judge on May 4 partially granted a motion to assert breach of contract and bad faith counterclaims against an insurer in a coverage dispute arising out of a sewage spill after determining that the insurer would not be prejudiced if the counterclaims were asserted by the defendants (Travelers Property Casualty Company of America v. Mountain Movers Engineering Contactors Inc., No. 16-2127, S.D. Calif.; 2017 U.S. Dist. LEXIS 68575).

Missouri Federal Judge Says New Pollution Conditions Are Not Excluded From Coverage
KANSAS CITY, Mo. - A Missouri federal judge on May 2 denied an insurer's motion for summary judgment after determining that a premises pollution liability policy does not exclude new pollution conditions discovered by the insured because the new pollution conditions are not connected with carrying out or directing a remediation plan (Sunflower Redevelopment LLC v. Illinois Union Insurance Co., No. 15-577, W.D. Mo., 2017 U.S. Dist. LEXIS 66446).

Amtrak Settles Environmental Contamination Coverage Claims With Insurer
BROOKLYN, N.Y. - In a May 8 stipulation of dismissal filed in New York federal court, Amtrak and one of its insurers notified the court that they have agreed to settle their claims in an environmental contamination and asbestos injury coverage suit (Certain Underwriters at Lloyd's, et al. v. National Railroad Passenger Corp., et al., No. 14-4717, E.D. N.Y.).

Insurer Says No Defense Owed For Suit Alleging Mattresses Emitted Chemical Odor
SAN FRANCISCO - An insurer has no duty to defend an underlying consumer class action lawsuit alleging that an insured's mattresses were defective because the underlying suit alleges only intentional conduct on the part of the insured and does not allege an accident as required by the policy at issue, the insurer maintains in an April 14 reply brief filed in the Ninth Circuit U.S. Court of Appeals (Hartford Fire Insurance Co. v. Tempur-Sealy International Inc., et al., No. 16-16056, 9th Cir.).

Texas Panel Denies Motions For Rehearing, Upholds Jury's Award For Breach Of Contract
BEAUMONT, Texas - A Texas appeals panel on May 4 denied an insured's and an insurer's motions for rehearing in a coverage dispute arising from a plumbing leak, affirming that a jury correctly entered a $15,000 award for breach of contract damages and reversing the jury's $20,000 award of actual damages that resulted from an insurer's alleged unfair settlement practices and the jury's award of additional damages of $60,000 (State Farm Llloyds v. Dennis Webb, No. 09-15-00408, Texas App., 9th Dist., 2017 Tex. App. LEXIS 4025).

No Additional Coverage Owed For Asbestos Removal, W.Va. High Court Says
CHARLESTON, W.Va. - No additional coverage is owed under a policy's pollutant removal provision for the removal of asbestos found within a building destroyed by a fire because the provision only provides coverage if the land or water surrounding the insured building was affected by the pollutant, the West Virginia Supreme Court of Appeals said April 26 in answering a certified question regarding the policy's pollutant removal provision (Mohammed Ashraf, M.D. v. State Auto Property and Casualty Insurance Co. et al., No. 16-1042, W.Va. Sup., 2017 W. Va. LEXIS 292).

Insurer Argues District Court Erred In Finding Sewage Is Not A Pollutant
ATLANTA - An Alabama federal judge erred in finding that a policy's total pollution exclusion cannot be asserted as a bar to coverage for two underlying lawsuits alleging injuries from sewage exposure, an insurer argues in an April 25 brief filed in the 11th Circuit U.S. Court of Appeals (Evanston Insurance Co. v. J&J Cable Construction LLC, et al., No. 17-11188, 11th Cir.).

Washington High Court Majority Says Coverage Owed For Negligent Installation
SEATTLE - The majority of the Washington Supreme Court on April 27 determined that an insurer has a duty to defend underlying claims arising out of carbon monoxide poisoning because the efficient proximate cause of the loss was the negligent installation of a hot water heater, which is a covered occurrence under the policy (Zhaoyun Xia, et al. v. ProBuilders Specialty Insurance Co., et al., No. 92436-8, Wash. Sup., 2017 Wash. LEXIS 443).

Ala. Federal Judge Strikes Insurer's Expert Witness In Environmental Coverage Suit
MOBILE, Ala. - An Alabama federal judge on April 24 granted a motion to strike an insurer's proposed expert witness after determining that the expert's testimony relates to claims that were already decided in an underlying environmental contamination suit (Heartland Catfish Co. Inc. et al., v. Navigators Specialty Insurance Co., No. 15-368, S.D. Ala., 2017 U.S. Dist. LEXIS 62379).

Judge Declines To Seal Docs In Reinsurer, Insurer Dispute Over Asbestos Coverage
SYRACUSE, N.Y. - Supporting documents pertaining to transcripts, arbitration filings and expert reports will not be sealed in a breach of contract dispute between an insurer and reinsurer over asbestos coverage, a New York federal judge ruled April 26 (Utica Mutual Insurance Co. v. Munich Reinsurance America Inc., No. 12-cv-00196, Munich Reinsurance America Inc. v. Utica Mutual Insurance Co., No. 13-cv-00743, N.D. N.Y.).

Judge Waits To Address Motion To Strike Affidavit In Case Against Reinsurer
NEW HAVEN, Conn. - Declining to strike an affidavit from a senior vice president of a reinsurer because it is inappropriate to address the motion at the summary judgment stage, a Connecticut federal judge said April 25 that she would address the arguments in her ruling on the motion for summary judgment in a breach of contract dispute between a reinsurer and insurer (Travelers Casualty and Surety Co., f/k/a The Aetna Casualty and Surety Co. v. Century Indemnity Co. as successor to Insurance Company of North America, No. 16-cv-170, D. Conn.).

Federal Magistrate Compels Insurer To Provide Notices With Co-Insurers, Reinsurers
CHICAGO - An insurer is compelled to provide notices with its co-insurers and reinsurers under a 1990 insurance policy, an Illinois federal judge ruled March 30, because the notices might reveal admissions from the insurer about the availability of coverage toward the settlement of lawsuits over the use of contaminated blood products (Baxter International Inc. v. AXA Versicherung, No. 11-cv-09131, N.D. Ill., 2017 U.S. Dist. LEXIS 48607).

Ambiguity Exists About Nature Of Insured's Business, Mass. Federal Judge Says
BOSTON - A Massachusetts federal judge on April 28 found that insurers have a duty to defend an insured against underlying claims arising out of the contamination of flexible pouches used to package food products after determining that an ambiguity exists regarding whether the insured is involved in the business of food processing as required for the exception to a microbe exclusion to apply (Cheer Pack North America LLC v. Valley Forge Insurance Co. et al., No. 15-14135, D. Mass., 2017 U.S. Dist. LEXIS 65054).

Panel Reverses Ruling In Insurer's Favor In Dispute Over Damaged Scallops
BOSTON - A Massachusetts appeals panel held on April 26 that a seafood-processing facility insured has a reasonable expectation of proving that unexplained damage to scallops was caused by an occurrence pursuant to a commercial general liability insurance policy, reversing and remanding a lower court's ruling in favor of the insurer (The Hanover Insurance Group, Inc. vs. Raw Seafoods, Inc., No. 15-1554, Mass. App., 2017 Mass. App. LEXIS 49).