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Headline Catastrophic Loss Legal News from LexisNexis®
Judge Rules That Letter Is Written Denial That Triggered SFIP's Statutory Period
CAMDEN, N.J. - A federal judge in New Jersey on Feb. 2 found that a federal flood insurer's letter that rejected its insured's proof of loss for Superstorm Sandy damage constituted a written denial of the claim and, therefore, triggered a Standard Flood Insurance Policy's (SFIP) one-year statute of limitations to bring a lawsuit (Anthony Migliaro v. Fidelity National Indemnity Insurance Co., No. 15-5688, D. N.J., 2017 U.S. Dist. LEXIS 15497).
Judge: Assignee Of Mortgage Is Not Entitled To SFIP Coverage For Sandy Damage
CAMDEN, N.J. - A New Jersey federal judge held on Feb. 1 that an assignee of a mortgage cannot collect on the insured mortgagee's standard flood insurance policies (SFIP) for a Superstorm Sandy loss that predates the assignment, granting two federal flood insurers' motions for summary judgment (Goldstein Group Holdings, Inc. v. Hartford Insurance Company of the Midwest, et al., No. 15-03851, D. N.J.; 2017 U.S. Dist. LEXIS 14560).
Federal Judge: Fact Issues Exist As To Proof Of Loss In Superstorm Sandy Dispute
CAMDEN, N.J. - Finding that there are genuine issues of material fact as to whether an insured submitted and an insurer received a proof of loss for the insured's Superstorm Sandy damage, a New Jersey federal judge on Jan. 31 denied the insurer's motion for summary judgment in the resulting coverage dispute (Gregg S. Balin v. New Jersey Manufacturers Insurance Co., No. 14-5001, D. N.J., 2017 U.S. Dist. LEXIS 12952).
Judge: Insureds' Claim Is 'Directly Contradicted' By Federal Law And Regulations
CAMDEN, N.J. - A New Jersey federal judge on Jan. 25 granted a federal flood insurer's motion for summary judgment in its insureds' lawsuit seeking coverage for additional Superstorm Sandy damages, finding that the insureds' failure to submit a supplemental proof of loss defeats their claim (Thomas Rossetti and Yana Rossetti v. Selective Insurance Company of America, No. 15-5737, D. N.J.; 2017 U.S. Dist. LEXIS 10670).
New York Justice Allows Breach Of Contract Claim To Stand In Superstorm Sandy Suit
STATEN ISLAND, N.Y. - A New York justice on Jan. 23 dismissed five out of six claims against an insurer in a Superstorm Sandy coverage dispute but allowed the breach of contract claim to proceed (Elite Catering Company, Inc. v. National Specialty Insurance Co., No. 101041/2013, N.Y. Sup., Richmond Co., 2017 N.Y. Misc. LEXIS 239).
Majority Affirms Ruling In Coverage Dispute Over $2.6M Tornado Damage
NEW ORLEANS - A majority of the Fifth Circuit U.S. Court of Appeals on Jan. 23 affirmed a lower federal court's ruling that an insurer failed to provide sufficient notice that it was canceling a commercial property insurance policy, further affirming that the insurer had an arguable basis for its decision to deny coverage for the alleged $2.6 million tornado damage to a church building (GuideOne Elite Insurance Co., et al. v. Mount Carmel Ministries, et al., No. 15-60915, 5th Cir.; 2017 U.S. App. LEXIS 1147).
Panel Certifies 2 Questions To N.Y. High Court In Dispute Arising From 9/11 Attacks
NEW YORK - The Second Circuit U.S. Court of Appeals on Jan. 19 certified two questions to the New York Court of Appeals in a dispute over whether a public benefit corporation has the capacity to challenge as unconstitutional a New York statute that revived claims against public corporations for personal injuries incurred during the rescue, recovery and cleanup efforts following the Sept. 11, 2001, terrorist attacks (In re: World Trade Center Lower Manhattan Disaster Site Litigation, Nos. 15-2181, 15-2283, 15-2285, 15-2487, 15-2506 and 15-2687, 2nd Cir.).
California High Court: Statutory Authority Supports Replacement Cost Regulation
SAN FRANCISCO - The Supreme Court of California on Jan. 23 held that statutory authority supports the California Insurance commissioner's 2011 regulation covering replacement cost estimates for homeowners insurance, reversing and remanding an appeals court's judgment that invalidated the regulation (Association of California Insurance Companies et al., v. Dave Jones, as commissioner, etc., No. S226529, Calif. Sup.; 2017 Cal. LEXIS 217).
Judge: Insurer's Delay In Appraisal Process Supports Insureds' Bad Faith Claim
PHILADELPHIA - Although insureds have failed to plead their claim for breach of contract against their insurer, they have shown that the insurer's delay in taking part in a mandatory appraisal process was in bad faith, a federal judge in Pennsylvania ruled Jan. 30 in granting in part and denying in part the insurer's motion to dismiss (Charles Dagit, et al .v. Allstate Property and Casualty Insurance Co., No. 16-3843, E.D. Pa., 2017 U.S. Dist. LEXIS 12124).
7th Circuit: Insured Fails To Show Causal Relationship Between Windstorm, Damage
CHICAGO - The Seventh Circuit U.S. Court of Appeals on Jan. 13 affirmed a lower federal court's ruling that a church insured has failed to adduce evidence of a causal relationship between a March 1, 2011, windstorm and its purported property damage (Olivet Baptist Church v. Church Mutual Insurance Co., No. 16-1689, 7th Cir.; 2017 U.S. App. LEXIS 647).
Federal Judge Dismisses All But Breach Of Contract Claim In Flood Coverage Dispute
HOUSTON - A Texas federal judge on Feb. 2 granted a federal flood insurer's motion to dismiss all extracontractual state law claims brought by an insured in a coverage dispute arising from a heavy rainfall (Jianhua Ling v. Farmers Insurance Group d/b/a Fire Insurance Exchange, No. 16-2961, S.D. Texas, 2017 U.S. Dist. LEXIS 14882).
Judge: Insured Pleaded More Than 'Mere Conclusions' In Pleading Bad Faith
SIOUX FALLS, S.D. - An insured has sufficiently pleaded more than just "mere conclusions" in making his insurance bad faith claim against his homeowners insurance carrier and, thus, his claim is sufficient pursuant to Federal Rule of Civil Procedure 8(a)(2), a federal judge in South Dakota ruled Feb. 3 in denying the insurer's motion to dismiss (Steven Haney v. American Family Mutual Insurance Co., No. 16-4113, D. S.D., 2017 U.S. Dist. LEXIS 15154).
Judge: Claims Adjuster, Employee Were Properly Joined In Bad Faith Suit
SAN ANTONIO - An insured has shown that a claims adjuster and its employee violated provisions of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA) and, thus, that those defendants were properly joined in an insurance breach of contract and bad faith lawsuit, a federal judge in Texas ruled Jan. 31 in granting an insured's motion to remand the action to state court (Kris Hospitality LLC, d/b/a Days Inn, v. Tri-State Insurance Co. of Minnesota, et al., No. 16-1229, W.D. Texas, 2017 U.S. Dist. LEXIS 13532).
Judge: Insured's Breach Of Contract Is Barred By 2- Year Statute Of Limitations
DENVER - An insurance policy's two-year statute of limitations precludes an insured's breach of contract claim regarding denied additional coverage for hailstorm claims, a Colorado federal judge ruled Jan. 13 (The Pinewood Townhome Association Inc. v. Auto-Owners Insurance Co., No. 15-01604, D. Colo.; 2017 U.S. Dist. LEXIS 5456).
Plaintiff Not Owed Coverage As Additional Insured, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Jan. 11 affirmed a lower federal court's ruling in favor of an insurer in a breach of contract lawsuit seeking coverage for property and business interruption losses (Bita Trading Inc. v. Nationwide Mutual Insurance Co., et al., No. 15-55371, 9th Cir.; 2017 U.S. App. LEXIS 521).
Parties Ask 4th Circuit To Determine Whether Bad Faith Suit Was Time-Barred
RICHMOND, Va. - Parties in an insurance dispute recently asked the Fourth Circuit U.S. Court of Appeals to determine whether an insurance breach of contract and bad faith suit was time-barred when filed and whether it met the presuit "claims presentment requirements of the insureds' Standard Flood Insurance Policy (SFIP) (Gary Woodson, et al. v. Allstate Insurance Co., No. 16-2018, 4th Cir.).
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).