Mealey's Catastrophic Loss : Mealey's : Legal News & Analysis

Mealey's Catastrophic Loss

November 13, 2023
Reserve Information In COVID-19 Coverage Suit Not Relevant To Bad Faith Claim

SANTA ANA, Calif. — A California federal magistrate judge denied an insured’s motion to compel documents related to the reserve set by an insurer in response to the insured’s claim for business losses sustained in the wake of the COVID-19 pandemic after determining that the reserve information is not relevant to the insured’s bad faith claim because only a nominal reserve was set by the insurer and no changes were made to the reserve since the coverage claim was filed.
November 10, 2023
11th Circuit Denies As Moot Insurer’s Petition For Panel Rehearing In Irma Dispute

ATLANTA — On its own motion, the 11th Circuit U.S. Court of Appeals vacated an opinion, entered a new opinion and denied as moot an insurer’s petition for panel rehearing in an appraisal dispute over Hurricane Irma damage.
November 08, 2023
Judge Modifies Class In Driver’s Suit Against GEICO For Unfair COVID Premiums

SAN FRANCISCO — A California federal judge on Nov. 7 granted an insured’s motion to modify a previously certified class of automotive policy holders in the insured’s suit claiming that GEICO violated California’s unfair competition law (UCL) by profiting from a premium giveback program initiated during the COVID-19 pandemic, with the judge agreeing based on evidence produced to change the class time period.
November 06, 2023
4th Circuit Tosses Appeal In COVID-19 Coverage Suit After Parties Agree To Dismiss

RICHMOND, Va. — One day after an insured and its insurer filed a stipulation of voluntary dismissal, the Fourth Circuit U.S. Court of Appeals dismissed the insured’s appeal of a Maryland federal court’s denial of its motion for leave to file a second amended complaint to address the standard for physical loss that was provided by the Maryland Supreme Court in answer to a certified question in a COVID-19 coverage dispute.
November 06, 2023
No Coverage Owed For Roof Collapse Following Thunderstorm, 5th Circuit Affirms

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Nov. 3 affirmed a lower federal court’s summary judgment ruling in favor of an insurer in a building owner insured’s breach of contract and bad faith lawsuit seeking coverage for damage caused by a collapsed roof following a thunderstorm, rejecting the insured’s contention that its principal’s deposition testimony created a genuine issue of material fact regarding whether the damage was caused by wind or rain.
November 03, 2023
Breach Of Contract, Bad Faith Suit Will Remain In Louisiana Federal Court

NEW ORLEANS — An insured’s breach of contract and bad faith suit arising out of a hurricane damage coverage dispute will remain in federal court because the property insurer met its burden of showing that the federal jurisdictional amount in controversy requirement has been exceeded, a Louisiana federal judge said in denying the insured’s motion to remand to state court.
November 03, 2023
Insured’s Suit Seeking Coverage For Hurricane Damages Cannot Survive, Judge Says

LAKE CHARLES, La. — A Louisiana federal judge dismissed an insured’s suit against her homeowners insurer after determining that the breach of contract claim cannot survive based on the policy’s 24-month suit limitations provisions and that the bad faith and negligent infliction of emotional distress claims cannot survive because the insured failed to provide any support for the claims.
November 02, 2023
Hurricane Coverage Row With Insolvent Insurer Dismissed After Counsel Suspended

LAKE CHARLES, La. — A Louisiana federal judge adopted a federal magistrate judge’s report and recommendation advising dismissal of a homeowner’s hurricane coverage suit against her now-insolvent insurer when the homeowner failed to appear following the court’s suspension of her legal counsel due to the firm’s alleged misconduct in handling hurricane coverage cases.
November 02, 2023
Louisiana Majority Refuses To Disturb Reversal Of Default Judgment In Ida Dispute

NEW ORLEANS — A majority of the Louisiana Supreme Court denied insureds’ petition for a writ of certiorari in a Hurricane Ida coverage dispute, standing by its reversal and remand of a default judgment awarding the insureds $694,072.63 in outstanding sums purportedly due under a homeowners insurance policy, penalties, attorney fees and general damages.
October 30, 2023
Force Majeure Provision Does Not Excuse Rent Payment, Panel Says In Coronavirus Suit

SANTA ANA, Calif. — A California appeals panel affirmed a lower court’s ruling that an appellant cannot recoup rent payments for periods during which it was prevented from operating its indoor health and fitness facility due to the government orders in response to the coronavirus pandemic, rejecting the appellant’s argument that the commercial lease's force majeure provision excused it from paying rent.
October 26, 2023
Policy’s Business Income Coverage Language Is Ambiguous, Federal Judge Rules

LOS ANGELES — A California federal judge partly denied a commercial property insurer’s motion for summary judgment in a breach of contract lawsuit arising from a now defunct restaurant’s suspension of operations, finding that the policy’s business income coverage language is ambiguous.
October 25, 2023
8th Circuit Refuses To Reconsider Remand Of Coronavirus Coverage Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Oct. 24 denied an insurer’s petition seeking rehearing or rehearing en banc of its Sept. 11 ruling that reversed and remanded a coronavirus coverage ruling for an Iowa federal court to determine whether federal diversity jurisdiction exists.
October 25, 2023
Panel Remands For Entry Of Take-Nothing Judgment In Hurricane Harvey Coverage Suit

BEAUMONT, Texas — A Texas appeals panel reversed a lower court’s summary judgment ruling in favor of insureds in a coverage lawsuit arising from Hurricane Harvey damage and remanded for the lower court to enter a take-nothing judgment in favor of the insurer.
October 23, 2023
Majority Substitutes Opinion, Denies Panel Rehearing As Moot In Irma Coverage Suit

ATLANTA — A majority of the 11th Circuit U.S. Court of Appeals on its own motion on Oct. 20 vacated a May 31 opinion, substituted a new opinion and denied as moot an insurer’s motion for panel rehearing en banc, standing by its finding that a lower federal court’s order compelling appraisal and staying a Hurricane Irma coverage dispute pending the appraisal is an interlocutory order that is not immediately appealable under Title 28 U.S. Code Section 1292(a)(1), 28 U.S.C. § 1292(a)(1), or under the Federal Arbitration Act.
October 23, 2023
Insureds Seek Dismissal In Hurricane Coverage Row Involving Liquidated Insurer

ST. CROIX, Virgin Islands — Homeowners notified a federal court in the Virgin Islands that because one of the insurer defendants was never served, the case against it should be dismissed in the insureds’ Hurricane Maria coverage suit involving an insurer in liquidation.
October 23, 2023
5th Circuit Affirms Refusal To Remand And Dismissal Of Coronavirus Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower federal court’s denial of insureds’ motion to remand a coronavirus coverage dispute and its grant of the commercial property insurer’s motion to dismiss a breach of contract lawsuit seeking coverage for losses arising from the coronavirus pandemic, finding that the insureds failed to plausibly plead that the coronavirus caused direct physical damage to their insured property.
October 23, 2023
Louisiana Panel Affirms Rulings For Insureds In Hurricanes Laura, Delta Dispute

LAKE CHARLES, La. — A Louisiana appeals panel affirmed a lower court’s rulings following a jury verdict in favor of insureds in a coverage dispute arising from Hurricanes Laura and Delta damage, rejecting the insurer’s argument on appeal that the jury's finding that its payments were untimely is not supported by the evidence or testimony.
October 18, 2023
5th Circuit Affirms Court’s Decision To Vacate ‘Void’ Judgment In Coverage Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 17 affirmed a lower federal court’s ruling vacating a prior order dismissing a commercial shopping center owner insured’s breach of contract and bad faith lawsuit arising from Hurricane Ida damage, finding that the federal court lacked diversity jurisdiction.
October 18, 2023
New York Justice Dismisses Counterclaims Against Insurers In COVID-19 Coverage Suit

NEW YORK — A New York justice granted insurers’ motion to dismiss their insurers’ counterclaims in a coronavirus coverage dispute, finding that the case is “factually indistinguishable” from Consolidated Rest. Operations, Inc. v. Westport Ins. Corp. as to “policyholder COVID-19 claims based on a policy covering ‘direct physical loss, damage or destruction to property.’”
October 16, 2023
Maryland Panel: Insurer’s Negligence Claims Against Subcontractors Are Not Barred

ANNAPOLIS, Md. — Reversing a lower court in part, a Maryland appeals panel held Oct. 13 that contractual waivers of subrogation do not bar an all-risk insurer’s claims alleging that tornado damage to an Amazon warehouse was caused by subcontractors’ negligence in designing and building the warehouse because the subcontractors were not intended third-party beneficiaries of the subrogation waiver.
October 13, 2023
Policy’s 2-Year Prescriptive Period Provision Not Applicable To Bad Faith Claim

LAKE CHARLES, La. — A bad faith claim alleged by insureds against their homeowners insurer can proceed because the policy’s two-year prescriptive period applies only to the insureds’ breach of contract claim, a Louisiana federal judge said after determining that the bad faith claim is subject to a 10-year prescriptive period based on precedent set forth by the Louisiana Supreme Court.
October 13, 2023
Reconsideration Denied In Bid To Substitute Guaranty Association For Insurer

NEW ORLEANS — A Louisiana federal judge denied a request to reconsider an order denying substituting a now-insolvent insurer with the Louisiana Insurance Guaranty Association (LIGA) in a suit seeking coverage for purported damage to a home caused by Hurricane Ida, finding that there are no obligations transferred from an insolvent insurer to LIGA permitting it to “step into the shoes of the insolvent insurer.”
October 10, 2023
California Federal Judge Finds Contractor Cannot Bring Bad Faith Claim

LOS ANGELES — Because there has been no excess judgment in underlying arbitration proceedings stemming from a general contractor’s alleged failure to properly secure a building under construction in advance of a hurricane, the contractor cannot state a claim against a commercial general liability insurer for bad faith, a federal judge in California ruled in granting the insurer’s motion for partial summary judgment on the claim.
October 10, 2023
Citing Mudpie, 9th Circuit Affirms Virus Exclusion Bars Coverage For COVID-19 Losses

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of insureds’ lawsuit seeking coverage for their losses arising from the coronavirus pandemic and subsequent governmental orders, finding that, as in Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., the insureds failed to plausibly assert that “the efficient cause” of their losses was anything other than the spread of the COVID-19 virus throughout California.
October 06, 2023
Panel Affirms Dismissal Of Coverage Suit For Insureds’ Failure To Comply With Rule

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 5 affirmed a lower federal court’s dismissal without prejudice of a coverage dispute over the insureds’ claims for tornado and wind and hailstorm damage, finding that the lower court did not abuse its discretion in finding that the insureds failed to comply with a local rule that required the retention of local counsel.