Newsletter RSS

Mealey's Catastrophic Loss

  • January 23, 2020

    Reinsurers Oppose Motion To Alter Ruling Sending $150M Loss Case To Arbitration

    SAN JUAN, Puerto Rico — Reinsurers in Jan. 21 opposition briefs argue that a Puerto Rico federal judge should deny an insolvent insurer’s liquidator motion to alter a decision sending a $150 million hurricane loss case to arbitration because there was no manifest error with the ruling (Integrand Assurance Co. v. Everest Reinsurance Co., et al., No. 19-01111, D. Puerto Rico).

  • January 15, 2020

    Panel:  Court Should Have Applied Poulis Factors Before Imposing ‘Drastic Sanction’

    PHILADELPHIA —The Third Circuit U.S. Court of Appeals on Jan. 14 held that a lower federal court did not evaluate its insured’s failure to appear in court under Poulis v. State Farm Fire & Casualty Co. before dismissing the insured’s claims as a sanction, reversing the lower court’s dismissal of claims against a homeowners insurer for the insured’s failure to prosecute (Robert Jacobsen, et al. v. Hartford Insurance Company Flood & Home, No. 19-2381, 3rd Cir.).

  • January 15, 2020

    Limited Waiver Of FEMA’s Sovereign Immunity Does Not Apply, Federal Judge Rules

    BATON ROUGE, La. — A federal judge in Louisiana on Jan. 10 granted the Federal Emergency Management Agency’s motion to dismiss an insured’s breach of contract lawsuit arising from flood damage, rejecting the insured’s contention that the limited waiver of FEMA's sovereign immunity applied (Matthew Poirrier v. Federal Emergency Management Agency, et al., No. 18-00434, M.D. La., 2020 U.S. Dist. LEXIS 4586).

  • January 15, 2020

    Insured Asks Texas High Court To Reverse Ruling As To Bad Faith, PPCA Claims

    AUSTIN, Texas — An insured recently asked the Texas Supreme Court to reverse a lower court’s ruling in favor of its commercial property insurer on its claims for bad faith and under Texas’ Prompt Payment of Claims Act (PPCA) arising from wind and hail property damage (Steven Biasatti, et al. v. GuideOne National Insurance Company, et al., No. 18-0911, Texas Sup.).

  • January 14, 2020

    Judge Compels Arbitration Of $5.66M Hurricane Case With English Underwriters

    TACOMA, Wash. — The Convention on the Recognition of Foreign Arbitral Awards is not preempted by Washington law, a federal judge in Washington ruled Dec. 26, compelling arbitration of an insurance coverage dispute against English underwriters over $5.66 million in hurricane damage (CLMS Management Services Limited Partnership, et al. v. AmWins Brokerage of Georgia, LLC, et al., No. 19-05785, W.D. Wash., 2019 U.S. Dist. LEXIS 221122).

  • January 13, 2020

    Known Loss Doctrine Bars Business Interruption Coverage, Illinois Panel Affirms

    CHICAGO — An Illinois appeals panel on Jan. 10 affirmed a lower court’s summary judgment ruling in favor of a business owners insurer based on the known loss doctrine because the insured knew that a construction project prompted by building code violations would cause a loss of business income before the inception of its insurance policy and the insured failed to disclose the construction project to the insurer (Dining Heritage, Inc. v. Leading Insurance Group Insurance Company, Ltd., et al., Ill. App., 1st Dist., 5th Div., 2020 Ill. App. Unpub. LEXIS 22).

  • January 13, 2020

    Supreme Court Denies Review Of Ruling That Flood Claim Is Time-Barred Under NFIA

    WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 13 denied an insured's petition for certiorari seeking review of a Fifth Circuit U.S. Court of Appeals’ majority ruling that the one-year statute of limitations under the National Flood Insurance Act (NFIA) barred his federal flood insurance claim arising from a May 2015 storm in Houston (Ali Ekhlassi v. National Lloyds Insurance Co., et al., No. 19-312, U.S. Sup.).

  • January 10, 2020

    Suit Over Elevator Damaged By Hurricane Irma Closed After Settlement Reached

    KEY WEST, Fla. — A federal judge in Florida on Dec. 6 administratively closed an insured’s lawsuit seeking coverage for the replacement of its elevator that was damaged by Hurricane Irma one day after the insured announced that the parties reached a settlement (Chesapeake Motel & Villas, Inc. v. Wright National Flood Insurance Company, No. 18-10161, S.D. Fla., 2019 U.S. Dist. LEXIS 223296).

  • January 10, 2020

    No Coverage For Water Damage To Exterior Insulation Finishing System, Panel Affirms

    DENVER — The 10th Circuit U.S. Court of Appeals on Jan. 9 held that the “flawed design” of a home’s exterior insulation finishing system (EIFS) constitutes “faulty design” and, therefore, there is no coverage for water damage discovered within the EIFS (Mark Mock, et al. v. Allstate Insurance Company, No. 18-1407, 10th Cir.).

  • January 10, 2020

    Barn’s Rebuilding Expenses Are Not Covered, Vermont High Court Says In Reversal

    MONTPELIER, Vt. — Partially reversing a lower court, the Vermont Supreme Court on Dec. 13 held that a contractor insured’s rebuilding expenses of a barn structure that collapsed due to strong winds are not covered under an insurance policy (Commercial Construction Endeavors, Inc. v. Ohio Security Insurance Company, No. 19-045, Vt. Sup., 2019 Vt. LEXIS 173).

  • January 10, 2020

    California Winery Operator Seeks Coverage For ‘Smoke Taint’ Caused By Wildfires

    OAKLAND, Calif. — An operator of vineyards and winemaking operations in California on Jan. 3 sued London insurers for breach of contract and bad faith in a California federal court, alleging that they wrongfully refused to pay for smoke exposure damage to its finished wines caused by the October 2017 wildfires in Sonoma and Napa County, Calif., and seeking $12 million for its loss (Vintage Wine Estates, Inc. v. Royal & Sun Alliance Insurance PLC, et al., No. 20-00101, N.D. Calif.).

  • January 09, 2020

    Magistrate:  Insureds Have Not Shown Sovereign Immunity’s ‘Limited Waiver’ Applies

    MIAMI — A federal magistrate judge in Florida on Jan. 7 held that insureds’ breach of contract lawsuit against the Federal Emergency Management Agency over Hurricane Irma damage must be dismissed without prejudice for lack of jurisdiction because the insureds have failed to satisfy their burden of establishing that the “limited waiver” of sovereign immunity applies (Jose Garcia-Pedrosa, et al., Plaintiffs, v. Federal Emergency Management Agency, et al., No. 18-24626, S.D. Fla., 2020 U.S. Dist. LEXIS 3010).

  • January 08, 2020

    Panel Affirms Insurer Did Not Breach Policy By Paying ACV For Windstorm Damage

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Jan. 6 affirmed a lower federal court’s ruling in favor of an insurer in a lawsuit alleging that it breached the homeowners insurance policy by using the actual cash value and not replacement cost when it assessed the amount owed to the insured for roof damage caused by a windstorm (Murray Richelson v. Liberty Insurance Corp., No. 19-3035, 6th Cir.).

  • January 06, 2020

    8th Circuit Affirms No Coverage Ruling For Losses Related To Rock Falls

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Jan. 3 affirmed a lower federal court's ruling in favor of primary and excess insurers in the insurers' lawsuit disputing coverage for its losses related to four rock falls, rejecting the insured’s argument that the dome-outs were caused by “building decay” under the policy (Westchester Surplus Lines Insurance Company, et al. v. Interstate Underground Warehouse & Storage Inc., No. 18-3448, 8th Cir.).

  • January 06, 2020

    Navigational Limit Bars Coverage For Yacht Damage, 11th Circuit Says In Reversal

    ATLANTA — The 11th Circuit U.S. Court of Appeals on Dec. 17 held that coverage for storm damage to a 65-foot sailboat in Florida is excluded because the marine insurance policy’s navigation limit required the vessel to be north of Cape Hatteras, N.C., during hurricane season, reversing and remanding a lower court’s ruling against the insurer (Geico Marine Insurance Co. v. James Shackleford, No. 18-12105, 11th Cir., 2019 U.S. App. LEXIS 37228).

  • December 31, 2019

    Judge Dismisses Insured’s Third-Party Complaint Against Reinsurers

    SAN JUAN, Puerto Rico — A federal judge in Puerto Rico on Dec. 27 dismissed an insured’s third-party complaint against reinsurers regarding allegations of breaches to reinsurance agreements and denied the insured’s motion to dismiss an insolvent insurer’s main action against the insured (Integrand Assurance Co. v. Puma Energy Caribe, LLC; Puma Energy Caribe, LLC v. Everest Reinsurance Co., et al., No. 19-1195, D. Puerto Rico, 2019 U.S. Dist. LEXIS 221766).

  • December 31, 2019

    Judge Denies Liquidator’s Bid To Stay Arbitration With Reinsurers Over $150M Loss

    SAN JUAN, Puerto Rico — Without explanation, a Puerto Rico federal judge on Dec. 26 denied an insolvent insurer’s liquidator’s motion alter or amend a ruling in order to stay arbitration proceedings in a case over $150 million in losses from two hurricanes against its reinsurers (Integrand Assurance Co. v. Everest Reinsurance Co., et al., No. 19-01111, D. Puerto Rico).

  • December 13, 2019

    Georgia Couple, Florida Company Sue Hurricane Strap Maker Over Premature Corrosion

    SAN FRANCISCO — A Georgia couple and a company that own homes in Florida filed a class action in federal court in California on Dec. 2 against the maker of hurricane straps that were attached to their homes, alleging that the straps are defective because they prematurely corrode and do not protect homes against damages caused by hurricane-force winds (Cary W. Cooper, et al. v. Simpson Strong-Tie Co. Inc., et al., No. 19-cv-7901, N.D. Calif.).

  • December 11, 2019

    Court Reverses Dismissal Of Bad Faith Counterclaim In Business Interruption Suit

    NEW YORK — A New York appeals court on Dec. 5 unanimously reversed a lower court’s dismissal of an insured’s bad faith counterclaim in its insurers’ lawsuit seeking a declaration that the insured’s business interruption loss arising from a fire that destroyed its manufacturing plant is limited to $15.1 million (Certain Underwriters at Lloyd's, et al. v Bioenergy Development Group LLC, et al., No. 10505 655792/17, N.Y. Sup., App., Div. 1st Dept.).

  • December 11, 2019

    Insurer Moves To Dismiss Breach Of Contract Suit Arising From Hurricane Irma Damage

    JACKSONVILLE, Fla. — An insurer on Dec. 10 asked a federal court in Florida to dismiss its insureds’ amended breach of contract complaint arising from Hurricane Irma damage to their St. Augustine, Fla., residential property, arguing that the express language of the lender-placed insurance policy unambiguously bars the plaintiffs from bringing the breach of contract claim as either named insureds or intended third-party beneficiaries to the policy (Jeffrey G. Meyer, et al. v. Integon National Insurance Company, No. 19-1397,  M.D. Fla.).