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Preview: LexisNexis® Mealey's™ Insurance Legal News

LexisNexis® Mealey's™ Insurance Legal News

Headline Insurance Legal News from LexisNexis®


Underlying Asbestos Claims Arose Out Of Single Occurrence, Illinois Panel Says
CHICAGO - The First District Illinois Appellate Court on Dec. 5 affirmed a trial court's ruling that underlying asbestos bodily injury claims constitute only one occurrence under an insurer's policies because the underlying claims arose from the single cause of the insured's manufacturing of ash-handling conveyor systems for coal plants (United Conveyor Corp. v. Allstate Insurance Co., et al., No. 1-16-2314, Ill. App., 1st Dist., 2nd Div., 2017 Ill. App. LEXIS 744).

Insurer Argues Delaware Judge Properly Found Excess Policies Were Not Triggered
WILMINGTON, Del. - Review of a Delaware judge's ruling that a number of excess insurance policies are not triggered by underlying asbestos claims filed against an insured is not warranted because the primary policies at issue were not exhausted, an insurer asserts in a Dec. 8 joinder brief filed in the Delaware Supreme Court (Motors Liquidation Co. DIP Lenders Trust v. Allstate Insurance Co., et al., No. 381, 2017, Del. Sup.).

Georgia Federal Judge Says Insurer Had Reasonable Basis To Dispute Mold Claim
AUGUSTA, Ga. - A Georgia federal judge on Dec. 6 denied an insurer's motion for summary judgment on a breach of contract claim but granted the insurer's motion on a bad faith claim after determining that the insurer had a reasonable basis to deny the insured's claim for coverage of mold and water damages incurred to her home as a result of a hailstorm (Carrie Finch v. Owners Insurance Co., No. 16-169, S.D. Ga., 2017 U.S. Dist. LEXIS 200934).

Federal Judge Denies Motion To Dismiss In Chemical Exposure Coverage Dispute
CHICAGO - An Illinois federal judge on Dec. 7 denied an insurer's motion to dismiss after rejecting the insurer's argument that the potential indemnitor for underlying liabilities arising out of exposure to polychlorinated biphenyls should be named as the defendant pursuant to a 1999 settlement between the insurer and the potential indemnitor because the coverage dispute is based on the insured's contracts with the insurer (Magnetek Inc. v. The Travelers Indemnity Co., et al., No. 17-3173, N.D. Ill.).

Coverage Barred For Claims Arising Out Contaminated Pet Food, Insurer Asserts
CHICAGO - No coverage is owed to an insured manufacturer of pet food for underlying claims alleging damages caused by pet food manufactured by the insured and contaminated with pentobarbital because the insured made material misrepresentations in its application for insurance and because the policies at issue clearly preclude coverage for the underlying claims, an insurer asserts in a Dec. 5 complaint filed in Illinois federal court (Colony Insurance Co. v. Evanger's Dog and Cat Food Co. Inc., et al., No. 17-8756, N.D. Ill.).

Parties Settle Bird Flu Damages Coverage Suit Prior To Start Of Trial
MINNEAPOLIS - A Minnesota federal judge on Dec. 4 dismissed a coverage dispute arising out of the infection of egg-laying birds with pathogenic avian influenza after the parties notified the court that they settled the coverage dispute (Rembrandt Enterprises Inc. v. Illinois Union Insurance Co., No. 15-2913, D. Minn.).

With Expert Opinions Allowed, Insurer Denied Judgment On Home Damage Claims
NASHVILLE, Tenn. - A Tennessee federal judge on Dec. 4 denied summary judgment to an insurer in a lawsuit over coverage for a damaged home after finding that testimony by the homeowners' expert is admissible and raises a material factual dispute about whether a sinkhole caused the damage (Debra Daniels, et al. v. Erie Insurance Group, No. 3:16-cv-01977, M.D. Tenn., 2017 U.S. Dist. LEXIS 198906).

Coverage Triggered By Exposure To Asbestos, New York Justice Determines
NEW YORK - Coverage for underlying asbestos claims arising out of the construction of the original World Trade Center towers is triggered if the underlying claims allege that the exposure occurred during the construction of the towers even if the disease did not develop until years later, a New York County Supreme Court justice said Nov. 29, noting that the policy at issue provides coverage for any injury arising out of the construction project (American Home Assurance Co. v. The Port Authority of New York and New Jersey, et al., No. No. 651096/2012, N.Y. Sup., New York Co.).

Subrogation, Unjust Enrichment Claims Properly Dismissed, Illinois Panel Says
CHICAGO - A trial court did not err in dismissing a primary insurer's counterclaim seeking contractual subrogation and alleging unjust enrichment against an insured's excess insurers in an asbestos coverage dispute because the primary insurer did not have a legal obligation to pay for any of the insured's liabilities incurred as a result of the underlying asbestos claims, the First District Illinois Appellate Court, Third Division, said Nov. 29 (Century Indemnity Co., et al. v. American Home Assurance Co., et. al., No. 1-16-3311, Ill. App., 1st Dist., 3rd Div., 2017 Ill. App. Unpub. LEXIS 2428).

Issues Of Fact Exist On Insurer's Liability, New York Appellate Division Says
NEW YORK - The First Department New York Supreme Court Appellate Division on Nov. 28 reversed a trial court's denial of a motion to dismiss an insurer's claim seeking a declaration that no coverage is owed to its insured for an underlying contribution claim in an environmental contamination dispute because issues in the underlying suit must be litigated before the insurer's claim can be decided (National Union Fire Insurance Company of Pittsburgh, Pa. v. Compaction Systems Corporation of New Jersey, et al., No. 5066, 107838/09, N.Y. Sup., App. Div., 1st Dept., 2017 N.Y. App. Div. LEXIS 8352).

Insurer Not Precluded From Arguing Bird Flu Damages Are Excluded Under Policy
MINNEAPOLIS - A Minnesota federal judge on Nov. 30 determined that an insurer is not precluded at trial from claiming that pathogenic avian influenza is caused by a naturally occurring material because the court previously held that fact issues exist on the applicability of the naturally occurring material exclusion (Rembrandt Enterprises Inc. v. Illinois Union Insurance Co., No. 15-2913, D. Minn., 2017 U.S. Dist. LEXIS 196924).

Connecticut Federal Judge: Cracks In Foundation Are Not Sudden And Accidental Loss
BRIDGEPORT, Conn. - No coverage is owed to insureds seeking coverage for cracks discovered in their basement walls and caused by the presence of a mineral used in the concrete because the insureds' loss was not sudden and accidental as required under the policy, a Connecticut federal judge said Nov. 30 (Alan D. Lees, et al. v. Allstate Insurance Co., No. 15-1050, D. Conn., 2017 U.S. Dist. LEXIS 196728).

New Jersey Panel: Policy Bars Coverage For Damages Caused By Sewer Backup
TRENTON, N.J. - The Appellate Division of the New Jersey Superior Court on Nov. 29 affirmed a trial court's ruling that no coverage is owed for water damages caused by a sewer backup because the policy's exclusion for water that backs up through sewers or drains clearly bars coverage (Shree Riddhi Siddhi Hospitality LLC v. Scottsdale Insurance Co., No. A-5210-15T2, N.J. Super., App. Div., 2017 N.J. Super. Unpub. LEXIS 2940).

No Evidence Offered To Support Breach Of Contract, Bad Faith Claims, Federal Judge Says
SHERMAN, Texas - Because insureds failed to offer evidence supporting their claims for breach of contract and bad faith arising out of an insurer's denial of coverage for a water damage claim, a Texas federal judge on Nov. 29 granted the insurer's motion for summary judgment (Jon and Leslie Young v. Allstate Vehicle and Property Insurance Co., No. 17-87, E.D. Texas, 2017 U.S. Dist. LEXIS 196094).

Illinois Federal Judge Says Exception To Pollution Exclusion May Apply
CHICAGO - An Illinois federal judge on Nov. 22 denied an insurer's motion for summary judgment as it pertained to the policy's pollution exclusion after determining that an exception to the exclusion for loss caused by a hostile fire may apply to provide coverage (Richard Building Supply I LLC v. The North River Insurance Co., No. 16-9053, N.D. Ill., 2017 U.S. Dist. LEXIS 193033).

Garlock, Safety National Dispute Policy Interpretation In Coverage Lawsuit
CHARLOTTE, N.C. - A magistrate judge correctly found that an insurance policy does not provide for arbitration in a dispute with former Chapter 11 debtor Garlock Sealing Technologies LLC and affiliates over coverage for asbestos claims, the companies argue in a Nov. 9 response to the insurer's objections to the magistrate's ruling in North Carolina federal court (Safety National Casualty Corp. v. Garlock Sealing Technologies LLC, et al., No. 3:17-cv-00458, W.D. N.C.).

Insurers Seek Relief From Kaiser Gypsum's Stay To Pursue Costs In Coverage Row
CHARLOTTE, N.C. - Insurers of Chapter 11 debtor Kaiser Gypsum Co. sought relief Oct. 24 from the automatic stay in the debtor's case in North Carolina federal bankruptcy court so they can pursue the repayment of their costs from the debtor's primary insurer in a 15-year-old coverage action in a California state court (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

Judge Strikes Third-Party Witness Testimony In Insurer, Reinsurer's Coverage Dispute
UTICA, N.Y. - Before trial in a dispute over a $325 million settlement of asbestos claims, a New York federal judge on Nov. 21 granted an insurer's request to strike a reinsurer's submission of deposition testimony in another case by a third-party witness as inadmissible hearsay (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y.).

No Coverage Owed For Mold Contamination Caused By Faulty Workmanship
CONCORD, N.H. - An insurer owes no coverage to its insureds for a loss-of-use claim arising out of mold contamination because the mold contamination was caused by faulty workmanship, an excluded cause of loss under the policy's mold endorsement, the New Hampshire Supreme Court said Nov. 15 (Michelle Russell, et al. v. NGM Insurance Co., No. 2016-054, N.H. Sup., 2017 N.H. LEXIS 218).

Insurer Must Cover Damage By Wind, Not Construction Defects, Appeals Panel Says
DETROIT - An insurer is responsible to cover damage from wind-driven rain to condominium units but is not responsible for damage caused by construction defects, a Michigan appeals panel held Nov. 16, reversing summary disposition to the insurer (Walters Beach Condominium Association v. Home-Owners Insurance Co., No. 335172, Mich. App., 2017 Mich. App. LEXIS 1810).

Issues Of Fact Related To Roof Collapse Preclude Summary Judgment, Panel Majority Says
CLEVELAND - The majority of an Eighth District Ohio Court of Appeals panel on Nov. 22 determined that a trial court erred in granting an insurer's motion for summary judgment because genuine issues of material fact exist related to coverage under the policy's collapse provisions (Intergroup International Ltd. v. Cincinnati Insurance Cos., No. 105290, Ohio App., 8th Dist., Cuyahoga Co., 2017 Ohio App. LEXIS 5099).

No Coverage Owed For Underlying Suit Arising Out Of Cleanup Of Lead Paint Dust
ST. LOUIS - No coverage is afforded for an underlying suit alleging claims related to the cleanup of lead dust after the removal of lead paint from a high school because the policy's pollution endorsement applies only in limited circumstances and the policy's lead exclusion clearly bars coverage, a Missouri federal judge said Nov. 20 (Rice Painting Co. Inc. v. Depositors Insurance Co., No. 15-1064, E.D. Mo., 2017 U.S. Dist. LEXIS 191355).

Oklahoma Federal Judge Strikes Affirmative Defenses In Contamination Dispute
TULSA, Okla. - An Oklahoma federal judge on Nov. 17 granted an insured's motion to strike five of its insurer's affirmative defenses after finding that the individual counts asserted by the insurer are redundant (Explorer Pipeline Co. v. American Guarantee & Liability Insurance Co., No. 17-330, N.D. Okla., 2017 U.S. Dist. LEXIS 190550).

Connecticut High Court To Review Rulings In Asbestos, Silica Coverage Dispute
HARTFORD, Conn. - The Connecticut Supreme Court on Oct. 18 agreed to review a number of issues decided by the Connecticut Appellate Court in an asbestos and silica coverage dispute after a number of the insurers and the insured petitioned the high court for review (R.T. Vanderbilt Co. Inc. v. Hartford Accident & Indemnity Co., et al., Nos. SC 20000, SC20001, SC20003, Conn. Sup., 2017 Conn. LEXIS 320, 2017 Conn. LEXIS 326, 2017 Conn. LEXIS 322).

Insurer Owes Trustee $3.5M In Policy Limits, Attorney Fees For Coverage Dispute
OAKLAND, Calif. - A California federal bankruptcy judge on Nov. 16 entered a judgment of more than $3.5 million against an insurance company in a dispute over the amount of coverage owed to a company's liquidating trust for asbestos personal injury claims, including attorney fees and a $60,000 penalty for the insurer's "vexatious and unreasonable conduct" in the case (In re CFB Liquidating Corporation, f/k/a Chicago Fire Brick Co., et al., No. 01-45483, [Barry A. Chatz, as Trustee for the CFB/WFB Liquidating Trust v. Continental Casualty Company, No. 15-4136] N.D. Calif. Bkcy., 2017 Bankr. LEXIS 3938).

Judge Resolves Motions To Exclude Testimony, Evidence In Reinsurer, Insurer Dispute
UTICA, N.Y. - In a dispute over a $325 million settlement of asbestos claims, a New York federal judge on Nov. 16 addressed a number of motions filed by an insurer and a reinsurer to preclude expert testimony and certain arguments from trial (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y., 2017 U.S. Dist. LEXIS 189911).

No Additional Coverage Owed For Mold Damage, New Jersey Panel Says
TRENTON, N.J. - An insurer owes no additional coverage to its insureds for mold damages caused by a leaking water pipe in the wall of a shower because the policy at issue clearly limited coverage for mold damage to $10,000 under a mold rider, the Appellate Division of the New Jersey Superior Court said Nov. 15 (Eugene J. Payor, et al. v. New Jersey Manufacturers Insurance Co., No. A-0345-16T2, N.J. Super., App. Div., 2017 N.J. Super. Unpub. LEXIS 2851).

Washington Federal Judge Says Questions Of Fact Exist In Water Damages Suit
SEATTLE - A Washington federal judge on Nov. 16 determined that questions of material fact exist regarding the application of an insurer's exclusions for deterioration and rot to an insured condominium association's claim for water intrusion damages that occurred over time to the exterior cladding of two of the association's buildings (Sunwood Condominium Association v. Travelers Casualty Insurance Company of America, et al., No. 16-1012, W.D. Wash., 2017 U.S. Dist. LEXIS 189892).

Known Defects Relieve Insurer Of Duty To Pay For Repairs, Panel Finds
LOS ANGELES - A homeowner "who is aware, long before a rainstorm occurs and causes damage, of possible leakage" caused by construction defects cannot reasonably expect an insurer to pay for repairs on the theory that rainwater, and not the defects, caused the damage, a California appeals panel affirmed Nov. 14 (Simon Cohen, et al. v. Pacific Specialty Insurance Co., No. B276060, Calif. App., 2nd Dist., Div. 8, 2017 Cal. App. Unpub. LEXIS 7779).