Preview: LexisNexis® Mealey's™ Insurance Legal News
LexisNexis® Mealey's™ Insurance Legal News
Headline Insurance Legal News from LexisNexis®
Alabama Federal Judge: Sewage Is Not Excluded Under Policy's Pollution Exclusion
MONTGOMERY, Ala. - Because sewage is not considered a pollutant under Alabama law, a pollution exclusion cannot be asserted as a bar to coverage for two underlying lawsuits alleging injuries from sewage exposure, an Alabama federal judge said Sept. 22 (Evanston Insurance Co. v. J&J Cable Construction LLC, et al., No. 15-506, M.D. Ala.; 2016 U.S. Dist. LEXIS 129371).
Insurer Has No Duty To Indemnify Under Pollution Exclusion, Federal Judge Says
MINNEAPOLIS - A policy's pollution exclusion does not preclude an insurer's duty to defend an underlying personal injury suit arising out of carbon monoxide poisoning but does preclude the insurer's duty to indemnify, a Minnesota federal judge said Sept. 23 in partially granting the insurer's motion for summary judgment (Travelers Property Casualty Company of America v. Christopher A. Klick, et al., No. 15-2403, D. Minn.; 2016 U.S. Dist. LEXIS 130762).
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).
New York Federal Judge Denies Motion For Interlocutory Appeal In Asbestos Dispute
NEW YORK - A New York federal judge on Sept. 22 denied an insurer's motion for interlocutory appeal on the issue of allocation in an asbestos coverage case after determining that an appeal would serve only to delay and not advance the case (Liberty Mutual Insurance Co. v. The Fairbanks Co., Nos. 13-3755, 15-1141, S.D. N.Y.).
Rapid-American Says Insurance Policy Exhaustion Finding Should Be Vacated
NEW YORK - A New York federal bankruptcy judge improperly found that Chapter 11 debtor Rapid-American Corp. has not paid a sufficient amount for asbestos claims to reach the level of excess coverage provided under three insurance policies, the company says in a Sept. 9 motion to vacate the judge's ruling (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).
Pittsburgh Corning Parent's Coverage Dispute With Insurers Dismissed
PITTSBURGH - Bankruptcy court is not the proper forum for an adversary insurance coverage action filed in the Chapter 11 case of Pittsburgh Corning Corp. (PCC) by PCC parent PPG Industries Inc. because an amended complaint contains no allegations that arise under bankruptcy law, a federal bankruptcy judge in Pennsylvania ruled Aug. 25 in dismissing the 16-year-old proceeding (In re: Pittsburgh Corning Corporation, No. 00-22876 [PPG Industries, Inc., et al. v. Argonaut Insurance Company, et al., No. 00-2201], W.D. Pa. Bkcy.).
Insurer Must Pay Insured For Costs Incurred By Change In Deposition, Judge Says
INDIANAPOLIS - An insurer must reimburse its insureds for attorney fees and expenses incurred as a result of a rescheduled deposition, an Indiana federal judge said Sept. 19 after determining that the insureds were not prejudiced by the change in deposition dates (Eli Lilly and Co., et al. v. Arch Insurance Co., et al., No. 13-1770, S.D. Ind.).
No Coverage Owed For Water, Mold Damages, D.C. Federal Judge Says
WASHINGTON, D.C. - No coverage is afforded for water and mold damages that occurred within a vacation home because the insureds did not have a water shut-off valve to turn off the home's main water supply while the home was unoccupied, a District of Columbia federal judge said Sept. 26, noting that the policy required the home's main water supply to be shut off while the home was unoccupied (Vasilli Katopothis, et al. v. Windsor-Mount Joy Mutual Insurance Co., et al., No. 14-380, D. D.C.; 2016 U.S. Dist. LEXIS 130907).
Oregon High Court Affirms Judgment Against Insurer In Water Damage Dispute
PORTLAND, Ore. - Coverage was triggered under a commercial general liability insurance policy for a negligence award against a siding contractor for water damage to a housing complex, the Oregon Supreme Court ruled Sept. 22, upholding a garnish judgment against the insurer in the amount of $433,958.16 (FountainCourt Homeowners' Association v. American Family Mutual Insurance Co., No. 61, Ore. Sup.; 2016 Ore. LEXIS 613).
Kansas Federal Judge Says Issues Of Fact Exist Regarding Collapse
TOPEKA, Kan. - A Kansas federal judge on Sept. 22 denied an insurer's motion for partial summary judgment after determining that issues of fact exist regarding whether a collapse caused the damages at issue to its insureds' kitchen (Dr. Thomas C. Welton, et al. v. AMCO Insurance Co., No. 14-4066, D. Kan.; 2016 U.S. Dist. LEXIS 130466).
5th Circuit Says Pollution Endorsement Does Not Exclude All Underlying Claims
NEW ORLEANS - A district court erred in granting summary judgment in favor of an insurer based on its policy's pollution endorsement because it is not clear that the endorsement excludes coverage for all of the underlying claims alleged against an insured, the Fifth Circuit U.S. Court of Appeals said Sept. 16 (Federal Insurance Co. v. Northfield Insurance Co., No. 14-20633, 5th Cir.; 2016 U.S. App. LEXIS 17008).
Louisiana High Court: Insurer's Duty To Defend Must Be Prorated By Time On The Risk
NEW ORLEANS - An insurer's duty to defend must be prorated according to the effective years of its policies at issue and its time on the risk for underlying bodily injury claims by plaintiffs alleging hearing loss from exposure to loud noise while working in an insured's sugar factory, the Louisiana Supreme Court said Sept. 7, reversing a trial court's ruling that the insurer is liable to provide a complete defense for the claims that span a 60-year period (Daniel Arceneaux, et al., v. Amstar Corp., et al., No. 2015-C-0588, La. Sup.; 2016 La. LEXIS 1675).
Delaware High Court: Coverage Triggered If Injury Occurred During Policy Period
WILMINGTON, Del. - The Delaware Supreme Court on Sept. 12 determined that coverage for underlying asbestos bodily injury claims is owed if the bodily injury was sustained during the applicable policy periods of the excess insurance policies at issue (In re Viking Pump Inc. and Warren Pumps LLC Insurance Appeals, Nos. 518, 2014; 523, 2014; 525, 2014; 528, 2014, Del. Sup.; 2016 Del. LEXIS 474).
Arizona Federal Judge: No Duty To Defend, Indemnify City For Asbestos Claim
PHOENIX - Excess and umbrella insurers have no duty to defend or indemnify the City of Phoenix for the settlement of an asbestos bodily injury claim because when the amount of defense costs is allocated across the effective policy periods, the costs do not exceed the city's self-insured retained limit, an Arizona federal judge said Sept. 2 (City of Phoenix v. First State Insurance Co., et al., No. 15-00511, D. Ariz.; 2016 U.S. Dist. LEXIS 119024).
No Coverage Due To Underlying Plaintiff For Lead Paint Injuries, Federal Judge Says
BALTIMORE - An underlying plaintiff is not entitled to coverage under policies issued to the owner of a rental property where she allegedly sustained damages as a result of lead paint because the underlying plaintiff is not an insured or a beneficiary under the policies at issue and because the policies at issue were rescinded pursuant to an agreement between the insurer and insureds, a Maryland federal judge said Sept. 15 (CX Reinsurance Co. Ltd. v. Stewart J. Levitas, et al., No. 15-2174, D. Md.; 2016 U.S. Dist. LEXIS 125390).
New York Federal Judge Dismisses Claims Against Insurer In Mold Coverage Dispute
CENTRAL ISLIP, N.Y. - A New York federal judge on Sept. 8 granted an insurer's motion to dismiss claims stemming from the insurer's denial of coverage for mold damage after determining that the current owner of the property was not listed as an insured on the policy, as required under New York law, and the former owner, who was listed as an insured on the policy, no longer had an insurable interest in the property (Mikael Mikaelian, et al. v. Liberty Mutual Insurance Co., No. 15-6182, E.D. N.Y.; 2016 U.S. Dist. LEXIS 121561).
Policy Clearly Precludes Loss For Roof Damaged By Wet Rot, Michigan Panel Says
TROY, Mich. - No coverage is owed to an insured seeking coverage for a damaged roof because the cause of the damage was wet rot, which is clearly an excluded cause of loss under the applicable policy, the Michigan Court of Appeals said Sept. 15 (Michigan Battery Equipment Inc. v. EMCASCO Insurance Co., No. 326945, Mich. App.; 2016 Mich. App. LEXIS 1720).
Judge: 'Your Work' Exclusion Bars Coverage For Insured's Faulty Condominium Work
ORLANDO, Fla. - While Florida recognizes that an insured's defective work on a condominium complex gives rise to an "occurrence" caused by "property damage" under a commercial general liability insurance policy, a Florida federal judge ruled Sept. 13 that the "your work" exclusion extinguishes the insurer's duty to defend and indemnify (Evanston Insurance Co. v. DiMucci Development Corporation of Ponce Inlet Inc. and Towers Grande Condominium Association, No. 15-486, M.D. Fla.; 2016 U.S. Dist. LEXIS 123678).
California Federal Judge: Insurance Adjuster Must Be Dismissed From Coverage Suit
LOS ANGELES - A California federal judge on Sept. 9 denied a motion to remand and granted an insurance adjuster's motion to dismiss in a water damage coverage suit after determining that the adjuster was fraudulently joined to the suit (Farzin Michael Feizbakhsh, et. al. v. Travelers Commercial Insurance Co., et al., No. 16-02165, C.D. Calif.; 2016 U.S. Dist. LEXIS 123471).
New York Panel Says No Coverage Due For Time When No Insurance Was Available
NEW YORK - The First Department of the New York Supreme Court Appellate Division on Sept. 1 determined than an excess insurer does not owe coverage to its insured for the time periods when the insured was unable to purchase environmental liability insurance coverage because the excess insurer's policies specifically state that coverage is afforded only for damages occurring during the policy period (Keyspan Gas East Corp. v. Munich Reinsurance America Inc., et al., No. 604715/1997, N.Y. Sup., App. Div., 1st Dept.; 2016 N.Y. App. Div. LEXIS 5824).
Forum Selection Clause Is Enforceable, New York Federal Judge Determines
NEW YORK - A New York federal judge on Sept. 7 denied an insured's motion to dismiss an insurer's suit seeking a coverage declaration for underlying suits arising out of the insured's fracking operations because the policy at issue includes a forum selection clause designating New York as the forum to litigate any disputes (Certain Underwriters at Lloyd's, London v. New Dominion LLC, No. 16-5005, S.D. N.Y.; 2016 U.S. Dist. LEXIS 121133).
2nd Circuit Affirms No Coverage Owed For Claims Arising Out Of Oil Spill
NEW YORK - The Second Circuit U.S. Court of Appeals on Sept. 8 affirmed that no coverage exists for an underlying lawsuit alleging claims against an insured as a result of an oil spill because the policies at issue clearly exclude coverage for the underlying claims (Petroterminal De Panama S.A. v. Houston Casualty Co., et al., No. 15-2941, 2nd Cir.; 2016 U.S. App. LEXIS 16629).
9th Circuit Says Watercraft Exclusion Bars Coverage For Contaminated Fish
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Sept. 9 affirmed a judgment entered in favor of an insured on a breach of contract claim in a petroleum contamination coverage suit, agreeing with a district court's determination that a watercraft exclusion bars coverage for the insured's fish oil that was contaminated with oil while stored on a ship (Trident Seafoods Corp., v. ACE American Insurance Co., No. 13-36035, 9th Cir.; 2016 U.S. App. LEXIS 16595).
Reinsurer, Reinsured Outline Need For Discovery In Reinsurance Dispute
PHILADELPHIA - A reinsurer and its reinsured told a federal court in Pennsylvania on Sept. 7 that they both anticipate the need for discovery in a late notice dispute regarding asbestos-related reinsurance billings (R&Q Reinsurance Company v. St. Paul Fire & Marine Insurance Company, No. 16-cv-01473, E.D. Pa.).
No Coverage Owed For Mold Damages, Connecticut Federal Judge Determines
BRIDGEPORT, Conn. - No coverage is afforded for mold damages within an insured home because the mold was not an unknown or hidden condition as required for coverage to exist under the policy's limited fungi endorsement, a Connecticut federal judge Sept. 2 (Elbert Calhoun, et al. v. The Providence Mutual Fire Insurance Co., No. 14-158, D. Conn.; 2016 U.S. Dist. LEXIS 118858).
Subrogated Insurers' Equal Protection Clause Claim Fails, 8th Circuit Affirms
ST. LOUIS - Subrogated insurers who paid out water damage claims to insured tenants did not suffer the same damages as uninsured tenants of the same building, the Eighth Circuit U.S. Court of Appeals affirmed Sept. 6, affirming summary judgment for the City of Minneapolis on the insurers' equal protection clause claim (American Family Insurance Co. and Liberty Mutual Insurance Co. v. City of Minneapolis, No. 15-3216, 8th Cir.; 2016 U.S. App. LEXIS 16336).
Judge Denies Certification To Iowa High Court Of Insured's Question On Defective Work
DES MOINES, Iowa - An Iowa federal judge on Sept. 2 denied an insured's request for the Iowa Supreme Court to consider whether comprehensive general liability policies provide coverage for underlying product liability claims when the damages arise from the insured's faulty work (Pella Corp., et al. v. Liberty Mutual Insurance Co., No. 11-00273, S.D. Iowa).
Oregon High Court To Review Coverage Dispute For Water Damage
SALEM, Ore. - A trial court's handling of a lawsuit alleging breach of a homeowners insurance policy and bad faith is under review by the Oregon Supreme Court, with questions on attorney fees and damages to be decided (Cary Long v. Farmers Insurance Company of Oregon, No. S063701, Oregon Sup.).
EPA Letter Constitutes Suit, Triggers Carrier's Duty To Defend, New Jersey Judge Says
NEWARK, N.J. - A New Jersey judge on Aug. 30 granted an insured's motion for summary judgment after determining that a general notice letter issued by the U.S. Environmental Protection Agency constitutes a suit under the terms of insurance policies at issue and triggers the insurer's duty to defend (Cooper Industries LLC v. Employers Insurance of Wausau et al., No. L-9284-11, N.J. Super., Essex Co. Law Div.; 2016 N.J. Super. Unpub. LEXIS 2003).
Georgia Panel Affirms Judgment In Favor Of Insured, Says Coverage Was Triggered
ATLANTA - The Fourth Division Georgia Court of Appeals on Aug. 31 affirmed a trial court's judgment that an excess insurer owes coverage for environmental contamination arising out of a pipeline leak because the excess insurer's policy provides coverage for occurrences that arise during the policy period and does not require that the actual injury or property damage occur during the policy period (Columbia Casualty Co. v. Plantation Pipe Line Co., No. A16A0705, Ga. App., 4th Div.; 2016 Ga. App. LEXIS 496).
Panel Reverses Rulings, Says Massachusetts Law, Not Rhode Island Law, Applies
BOSTON - Massachusetts law must be applied in an environmental contamination coverage suit for several Rhode Island sites because Massachusetts is the state where the insurance contracts were negotiated, the Massachusetts Appeals Court said Aug. 31 in reversing a number of rulings in favor of the insured (OneBeacon America Insurance Co. v. Narragansett Electric Co., et al., No. 13-1240, Mass. App.; 2016 Mass. App. LEXIS 113).
Illinois Court Properly Found Contamination Suit Should Be Resolved In New Jersey
CHICAGO - The First District Illinois Appellate Court on Aug. 22 determined that a trial court did not err in dismissing an environmental contamination coverage suit filed by excess insurers because New Jersey, where a similar suit is pending, is the more appropriate venue to resolve the dispute (American Home Assurance Co., et al., v. National-Standard LLC, et al., No. 1-15-1363, Ill. App., 1st Dist., 1st Div.; 2016 Ill. App. Unpub. LEXIS 1733).
Oregon Federal Judge Dismisses Suit, Says Tennessee Federal Suit Was First Filed
PORTLAND, Ore. - An Oregon federal judge on Aug. 29 dismissed an insured's suit seeking a coverage declaration for underlying environmental contamination cleanup claims because the insurer's suit, filed in Tennessee federal court, was filed first and addresses the same claims as the insured's suit (IBC Manufacturing Co. v. Berkshire Hathaway Specialty Insurance Co. et al., No. 16-908, D. Ore.; 2016 U.S. Dist. LEXIS 115240).
Del. Judge Says Insurer Did Not Fulfill Duty To Defend Insured For Asbestos Suits
WILMINGTON, Del. - A Delaware state judge on Aug. 19 granted an insured's motion for summary judgment after determining that the insurer did not fulfill its duty to defend the insured against underlying asbestos suits because the insurer did not follow applicable Wisconsin law in contesting its duty to defend (CNH Industrial America LLC v. American Casualty Company of Pennsylvania, et al., No. N12C-07-108, Del. Super., New Castle Co.; 2016 Del. Super. LEXIS 418).
5th Circuit Vacates Remand, Orders Consideration Of Jurisdiction Issues
NEW ORLEANS - An asbestos case removed on other grounds may remain in federal court where dismissal leaves only parties with complete diversity, but on remand a federal court must determine if that situation applies to the case before it, a Fifth Circuit U.S. Court of Appeals panel held Aug. 25 (Joannie L. Jefferson, et al. v. Certain Underwriters at Lloyd's London, No. 15-30211, 5th Cir.; 2016 U.S. App. LEXIS 15867).
Asbestos Claimants Object To Insurer Deals, Say More Coverage Available
CHICAGO - Two settlements of disputes over insurance coverage for asbestos claims between Chapter 11 debtor Oakfabco Inc. and two groups of insurers should not be approved because the deals "appreciably undervalue the Insurers' obligations to the estate under insurance policies issued to the Debtor," the Asbestos Claimants' Committee on Oakfabco's case told an Illinois federal bankruptcy court Aug. 1 (In re: Oakfabco, Inc., No. 15-27062, N.D. Ill. Bkcy.).
Judge: Insurer Owes Defense For Covered Water Claims, Noncovered Mold Claims
SAN FRANCISCO - A commercial general liability insurer owed a defense in an underlying action for both covered water damage claims and noncovered mold damage claims, a California federal judge ruled Aug. 19, finding that neither a mold exclusion or a "continuous or progressive injury or damage" exclusion applies to bar coverage (Saarman Construction Ltd. v. Ironshore Specialty Insurance Co., No. 15-03548, N.D. Calif.; 2016 U.S. Dist. LEXIS 110921).