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Mealey's Insurance

October 19, 2023
Decision To Include Insurance Case In Firefighting Foam MDL Belongs With JPMDL

CHARLESTON, S.C. — A federal judge in South Carolina has denied motions to dismiss the insurance coverage dispute brought by defendant Tyco Fire Products LP related to injuries from the firefighting substance aqueous film forming foam (AFFF) in the multidistrict litigation for AFFF, citing the doctrine of forum non conveniens and South Carolina’s door closing statute. However, the judge also said that although Tyco had directly filed the coverage lawsuit in the MDL, the decision to include it as part of the MDL should be made by the U.S. Judicial Panel on Multidistrict Litigation (JPMDL) and not the transferee court.
October 18, 2023
Mediator Approved For Insurance Disputes In Imerys, Cyprus Mines Bankruptcies

WILMINGTON, Del. — A Delaware federal bankruptcy judge approved a request by insurers of Chapter 11 asbestos talc debtors Imerys Talc America Inc. and Cyprus Mines Corp. to appoint a mediator for insurance issues in ongoing negotiations among the debtors and claimants on a plan of reorganization after extending the mediation through the end of the year.
October 17, 2023
Insurers Say Case Seeking Coverage For AFFF Claims Was Improperly Filed

CHARLESTON, S.C. — An insurance company on Oct. 16 filed a brief in South Carolina federal court in which it joins the arguments of other insurance companies that contend an amended complaint by Tyco Fire Products LP that seeks insurance coverage for claims arising from injuries associated with the firefighting agent aqueous film forming foam (AFFF) should be dismissed because of a related case that would require the parties to “devote time and resources to litigating two coverage actions on the same issues at the same time, at risk of inconsistent rulings on the same policies.”
October 17, 2023
3rd Circuit Dismisses Contractor’s, Homeowners’ Appeal In Mold Coverage Case

PHILADELPHIA — The Third Circuit U.S. Court of Appeals has dismissed homeowners’ and their contractor’s appeal of a lower court ruling that the contractor’s insurer owes them no coverage for personal injuries one of the homeowners sustained as a result of a mold infestation caused by the contractor’s negligent workmanship after the parties stipulated to dismissal following mediation.
October 17, 2023
Insureds’ Mold, Water Damage Suit Stayed To Allow Parties To Proceed To Appraisal

ORLANDO, Fla. — A Florida federal magistrate judge stayed a mold and water damage coverage lawsuit filed by insureds against their homeowners insurer to allow the parties to submit the dispute to appraisal.
October 16, 2023
N.J. Federal Judge Affirms Discovery Ruling In Pollution Liability Coverage Suit

NEWARK, N.J. — A New Jersey federal judge affirmed a magistrate judge’s ruling that a pollution liability insurer is not entitled to documents related to communications between the insured and its law firms about an underlying suit filed against the insured because the insurer failed to show that the magistrate judge’s ruling was clearly erroneous or contrary to law.
October 16, 2023
Federal Judge Grants Motion To Voluntarily Dismiss Pipeline Explosion Suit

BIRMINGHAM, Ala. — An Alabama federal judge granted a motion to voluntarily dismiss with prejudice a lawsuit filed by two insurers seeking a declaration that no coverage is owed for a gas pipeline explosion after the insurers notified the court that they reached a settlement with their insureds.
October 13, 2023
High Court Grants Cert For Insurer’s Challenge To Kaiser Gypsum Asbestos Bankruptcy

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 13 granted a petition for certiorari filed by the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. over a Fourth Circuit U.S. Court of Appeals’ ruling that the insurer lacks standing to challenge the debtors’ reorganization plan.
October 12, 2023
Pennsylvania Mediation Privilege Law Is Applied In Indemnification Row

TRENTON, N.J. — Ruling on a motion to compel discovery in a dispute between insurers and reinsurers over indemnification for asbestos bodily injury claims, a New Jersey federal magistrate judge denied it without prejudice as to two categories of documents but partly granted it as to a third category.
October 11, 2023
Insurer: AFFF Defendant’s Coverage Claim Fails For Lack Of Jurisdiction

CHARLESTON, S.C. — Allstate Insurance Co. on Oct. 10 filed a reply brief in South Carolina federal court arguing that Tyco Fire Products LP fails to establish that the court has jurisdiction over Allstate in Tyco’s lawsuit seeking insurance coverage for the multidistrict litigation for claims arising from injuries associated with the firefighting agent aqueous film forming foam (AFFF).
October 10, 2023
Insured Claims Property Insurer Owes Additional Coverage For Water Damage

LOS ANGELES — An insured filed suit in California state court against its property insurer, seeking a declaration that the insurer owes additional coverage to repair a property damaged when water pipes burst in the building and alleging that the insurer breached its contract and acted in bad faith by refusing to release additional fund for repairs.
October 10, 2023
Insured Condo Association Appeals Pollution Exclusion Ruling To 11th Circuit

ATLANTA — An insured filed a notice of appeal to the 11th Circuit U.S. Court of Appeals, seeking review of a Georgia federal judge’s ruling that an insurer owes no coverage for underlying suits filed by residents of a condominium building who claim that they were injured as a result of fumes exhausted from a backup power generator because the policies’ pollution exclusions bar coverage.
October 10, 2023
Insurers Move To Voluntarily Dismiss Gas Pipeline Explosion Coverage Suit

BIRMINGHAM, Ala. — Two insurers seeking a declaration that no coverage is owed for a gas pipeline explosion filed a motion to dismiss their lawsuit with prejudice in Alabama federal court after reaching a settlement with their insureds.
October 09, 2023
Diversity Of Citizenship Does Not Exist In Sewage Backup Coverage Suit

BROOKLYN, N.Y. — A premises environmental liability insurer’s suit seeking a declaration regarding its coverage obligation for an underlying bodily injury suit must be dismissed because complete diversity of citizenship does not exist as the premises environmental liability insurer and the commercial general liability insurer, named as a defendant, are both incorporated in Delaware, a New York federal judge said.
October 04, 2023
Insurer Asks 8th Circuit To Reconsider Remand Of Coronavirus Coverage Suit

ST. LOUIS — An insurer seeks rehearing or rehearing en banc of the Eighth Circuit U.S. Court of Appeals ruling that reversed and remanded a coronavirus coverage lawsuit for an Iowa federal court to determine whether federal diversity jurisdiction exists, arguing that the panel “expressly rejected the principle of federal law that parties are bound by their concessions of jurisdictional facts.”
October 03, 2023
California Panel Reverses Ruling In Insurers’ Favor In Coronavirus Coverage Suit

LOS ANGELES — A California appeals panel on Oct. 2 reversed and remanded a lower court’s order granting a group of insurers’ motion for judgment on the pleadings in a real estate investment firm’s coronavirus coverage dispute, rejecting the insurers’ argument that the pollution exclusion barred coverage.
October 03, 2023
Pollution Exclusion Bars Coverage For Damages Caused By Stormwater Runoff

ATLANTA — A Georgia federal judge granted a homebuilder liability insurer’s motion to dismiss an insured’s breach of contract suit after determining that no coverage is afforded for an underlying suit alleging property damages caused by stormwater runoff created by the insured’s construction of a townhome development because the policy’s pollution exclusion bars coverage for stormwater runoff.
October 02, 2023
COMMENTARY: Illusory Insurance Policy Coverage

By Robert M. Hall
October 02, 2023
Insurer Agrees To Dismiss Contamination Coverage Suit Following Settlement

ATHENS, Ga. — A commercial general liability insurer agreed to dismiss its suit filed against its insured and others in Georgia federal court and seeking a declaration that its policy’s pollution exclusion bars coverage for an underlying contamination and public nuisance suit arising out of the disposals made by the insured at a landfill after reaching a settlement with its insured and the other named defendants.
October 02, 2023
Kaiser Gypsum Insurer Says Cert Needed For Dispute Over Standing

WASHINGTON, D.C. — The Fourth Circuit U.S. Court of Appeals’ ruling that the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. lacks standing to challenge the debtors’ reorganization plan “exacerbates a conflict among the [U.S. circuit courts] and defies the straightforward text of the Bankruptcy Code,” the insurer says in a reply brief in support of its petition for certiorari in the U.S. Supreme Court.
October 02, 2023
Federal Judge Rules For Insurer In Landlord’s Coronavirus Coverage Suit

NEW YORK — A federal judge in New York on Sept. 29 granted a commercial property insurer’s motion for summary judgment in a coronavirus coverage suit, noting that the Second Circuit U.S. Court of Appeals has held in 11012 Holdings, Inc. v. Sentinel Ins. Co. that, pursuant to New York law, the unambiguous words “physical loss or damage” “require actual physical loss of or damage to the insured's property.”
October 02, 2023
Judge: Issues Of Fact Exist On Insurer’s Coverage Denial In Water Damage Dispute

OKLAHOMA CITY — An insured’s claim for bad faith against its commercial property insurer can proceed because issues of material fact exist as to whether the insurer’s denial of coverage for some roof damage and interior water damage was reasonable, an Oklahoma federal judge said in denying the insurer’s motion for summary judgment.
September 29, 2023
Rhode Island Federal Judge Says Bifurcation Of Bad Faith Claims Is Appropriate

PROVIDENCE, R.I. — A Rhode Island federal judge granted a homeowners insurer’s motion to bifurcate bad faith claims from a breach of contract claim alleged against the insurer by an insured seeking coverage for water damages after determining that the case will benefit if the bad faith claims are bifurcated.
September 26, 2023
Trial Court’s Breach Of Contract Finding In Water, Mold Damage Suit Was Error

SPOKANE, Wash. — The Division III Washington Court of Appeals reversed a trial court’s ruling on a breach of contract claim brought against a homeowners insurer in a mold and water damage coverage suit after determining that the breach of contract claim cannot survive because the insured failed to show that she sustained any damages as a result of the alleged breach.
September 26, 2023
Trial Court Erred In Granting Judgment For Insurer In Water Damage Suit

WAUKESHA, Wis. — The Second District Wisconsin Court of Appeals determined that a trial court erred in granting a homeowners insurer’s motion for judgment on the pleadings in a water damage coverage dispute because the insureds’ complaint does not allege that the water damage was caused by subsurface water, an excluded cause of loss, but by a sewer or drain backup, a covered cause of loss under the policy.