Mealey's Insurance
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June 21, 2018
Coverage May Exist; Policy Covers Collapse Caused By Hidden Decay, Judge Says
BRIDGEPORT, Conn. — An insurer’s motion to dismiss a complaint filed by insureds seeking coverage for their cracking foundation walls caused by a chemical reaction in the concrete must be denied because a possibility for coverage exists as the policy at issue provides coverage for collapse caused by hidden decay and defective construction materials, a Connecticut federal judge said June 20 (Mark C. Maki, et al. v. Allstate Insurance Co., No. 17-1219, D. Conn., 2018 U.S. Dist. LEXIS 102708).
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June 21, 2018
Insurer, Claims Company Deny Fraud Claims, Seek To Remove Bankruptcy Reference
CHICAGO — Fraud allegations leveled by the Oakfabco Inc. Asbestos Claimants’ Committee against insurers and a claims management company involving missing asbestos policies fail because the committee cannot even prove that the policies exist, the insurers and company say May 30 in an Illinois federal bankruptcy adversary case (Asbestos Claimants Committee v. American Casualty Company of Reading, PA, et al., No. 18-00002, N.D. Ill. Bkcy.).
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June 21, 2018
Appraisal Not Appropriate Until Issue Of Coverage For Water Damage Is Resolved
BRIDGEPORT, Conn. — An insured’s motion to compel appraisal in a water damage coverage suit is premature because the issue of whether additional coverage exists for the damages must first be resolved, a Connecticut federal judge said June 18 (Ice Cube Building LLC v. Scottsdale Insurance Co., d/b/a Scottsdale Insurance Group, No. 17-973, D. Conn., 2018 U.S. Dist. LEXIS 101308).
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June 20, 2018
11th Circuit Dismisses Appeal In Mold Damages Suit, Says Orders Are Not Appealable
ATLANTA — The 11th Circuit U.S. Court of Appeal on June 18 dismissed an appeal by insureds seeking coverage for mold damages after determining that jurisdiction does not exist because the district court did not issue a final and appealable judgment against the insureds (A. Denise Aldridge, et al. v. Travelers Home and Marine Insurance Co., No. 18-11310, 11th Cir., 2018 U.S. App. LEXIS 16406).
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June 19, 2018
Settlement Agreement Included 2 Insurers’ Policies, Federal Judge Says
SEATTLE — A Washington federal judge on June 11 granted a motion for summary judgment filed by two insurers in an environmental contamination allocation proceeding after determining that a 1997 settlement agreement and release clearly included the policies issued to the insured and released the insurers from liability (King County v. Travelers Indemnity Co., et al., No. 14-1957, W.D. Wash., 2018 U.S. Dist. LEXIS 97868).
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June 19, 2018
Insurer Says Coverage For Asbestos Exposure Barred By Pollution Exclusions
ST. LOUIS — No coverage is afforded for the settlement of an underlying asbestos exposure suit because the policies’ pollution exclusions bar coverage and the allocation of the underlying settlement does not exceed the policies’ deductibles, an insurer argues in a June 11 motion for summary judgment filed in Missouri federal court (Zurich American Insurance Co. v. Insurance Company of North America, No. 14-1112, E.D. Mo.).
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June 19, 2018
Insurer’s Lead Coverage Suit Permitted To Proceed; Motion To Stay Denied
SAN FRANCISCO — A stay of an insurer’s suit seeking a declaration regarding its duty to defend an insured in an underlying lead exposure suit is not warranted because the insurer’s coverage suit does not present the same issues as the underlying lead exposure suit and the insured will not be prejudiced if the insurer’s suit proceeds, a California federal judge said June 18 in denying the insured’s motion to stay (James River Insurance Co. v. W.A. Rose Construction, et al., No. 18-2030, N.D. Calif., 2018 U.S. Dist. LEXIS 101698).
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June 19, 2018
Maryland Casualty Says Latest Insurer Liability Action Should Get The Boot
WILMINGTON, Del. — A recent lawsuit in a string of actions seeking to hold insurers of former Chapter 11 debtor W.R. Grace & Co. liable for claimants’ asbestos diseases should be dismissed because a Delaware federal bankruptcy judge has already found that the claims are barred by the protections afforded the insurers in W.R. Grace’s reorganization, one insurer argues in a June 15 filing (Barbara Hunt, et al. v. Maryland Casualty Company, No. 18-50402, D. Del. Bkcy.).
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June 19, 2018
Insurers Ask U.S. High Court Question In Dispute Over Faulty Workmanship
WASHINGTON, D.C. — Insurers petitioned the U.S. Supreme Court on June 6 to answer a question in a dispute in which a federal appellate court predicted how a state high court would rule over whether a subcontractor’s faulty work that caused damage to an insured’s own work can constitute an “occurrence” (Aspen Insurance [UK] Ltd, et al. v. Black & Veatch Corp., No. 17-1662, U.S. Sup., 2018 U.S. S. Ct. Briefs LEXIS 2279).
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June 18, 2018
Judge Certifies Question On Collapse In Insureds’ Breach Of Contract Suit
HARTFORD, Conn. — In a breach of contract dispute over coverage for cracking in a basement, a Connecticut federal judge certified on June 15 a question to the state’s high court on what constitutes “substantial impairment of structural integrity” for purposes of applying a collapse provision in a homeowners insurance policy (Steven L. Vera, et al. v. Liberty Mutual Fire Insurance Co., No. 16-72, D. Conn., 2018 U.S. Dist. LEXIS 100548).
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June 15, 2018
Insureds Validly Assigned Rights Under Policies To Water Restoration Company
PHOENIX — Insureds whose homes sustained water damages validly assigned their rights under their homeowners policies to a water restoration company to collect payment for the remediation work, an Arizona appellate court said June 12 in rejecting the insurer’s argument that the assignments were not valid (Farmers Insurance Exchange v. The Honorable David Udall, et al., No. 18-0081, Ariz. App., Div. 1, 2018 Ariz. App. LEXIS 94).
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June 13, 2018
Ruling In Favor Of Insured In Environmental Suit Is Not Appealable, Judge Says
NEW YORK — A New York federal judge on June 7 clarified that a prior ruling that an excess insurer owes its insured more than $55 million for environmental contamination costs incurred by the insured is not a final and appealable judgment (Olin Corp. v. Lamorak Insurance Co., et al., No. 84-1968, S.D. N.Y.).
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June 12, 2018
Federal Magistrate Judge Recommends Granting Motion On Insurance Law Claims
BUFFALO, N.Y. — A New York federal magistrate judge on May 30 recommended that plaintiffs’ motions for summary judgment in an asbestos coverage dispute be granted on claims asserted under New York’s Insurance Law because the plaintiffs’ settlement agreements with the insured do not preclude the plaintiffs’ from asserting claims under Section 3420 of the law (Edna K. Mineweaser, et al. v. OneBeacon America Insurance Co., et al., Nos. 14-585, 14-1093, 15-177, 16-89, W.D. N.Y.; 2018 U.S. Dist. LEXIS 91203).
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June 12, 2018
Diversity Of Citizenship Does Not Exist; Water, Mold Coverage Suit Dismissed
WHITE PLAINS, N.Y. — A New York federal judge on June 11 dismissed an insured’s suit seeking coverage for water and mold damages following a sewage backup after determining that subject matter jurisdiction does not exist because both the insured and insurer are citizens of New York (Alexandra Tran, et al. v. Farmers Group Inc., et al., No. 17-3907, S.D. N.Y., 2018 U.S. Dist. LEXIS 97717).
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June 12, 2018
Impaired Property Exclusion Does Not Bar Coverage For Damage To Contents
STAMFORD, Conn. — A policy’s impaired property exclusion does not apply to bar damage to the contents of a restaurant following the collapse of a roof because the contents of the restaurant cannot be restored by repairing the building, a Connecticut Superior Court judge said May 22 (Seneca Insurance Co. Inc., v. Q Sono II LLC, No. FSTCV156024973, Conn. Super., 2018 Conn. Super. LEXIS 1005).
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June 11, 2018
Representation, Standing Debated In Bid To Hold Johns-Manville Broker Liable
NEW YORK — The future claimants’ representative (FCR) in the landmark bankruptcy case of Johns-Manville Corp. did not represent an asbestos claimants’ in personam claims against the company’s insurance broker, so the broker can be held independently liable for asbestos personal injury claims, a claimant’s law firm says June 8 on appeal in New York federal court (The Bogdan Law Firm v. Marsh USA, Inc., No. 1:18-cv-01228, S.D. N.Y.).
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June 11, 2018
Water Back-Up Endorsement Applies; Insurer Only Owes Limited Coverage, Judge Says
CHARLOTTE, N.C. — A North Carolina federal judge on June 6 granted an insurer’s motion for summary judgment in a water damage coverage suit after determining that the policy’s endorsement for water and sewage backup clearly limits coverage to $10,000 (Nancy Troutman, et al. v. QBE Insurance Corp., No. 17-464, W.D. N.C., 2018 U.S. Dist. LEXIS 96115).
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June 11, 2018
Bad Faith Claim Dismissed; Coverage Denial For Cracking Walls Was Fairly Debatable
BRIDGEPORT, Conn. — A Connecticut federal judge on June 6 dismissed claims alleging bad faith and violations of Connecticut’s Unfair Trade Practices Act and Unfair Insurance Practices Act alleged against a homeowners insurer because the insurer’s coverage denial was fairly debatable; however, the judge refused to dismiss the breach of contract claim against an insurer after determining that there is a possibility that coverage exists under policies issued before 2006 for cracking in the insureds’ basement walls as a result of a chemical reaction (Stephen Rosenberger, et al. v. Amica Mutual Insurance Co., No. 17-612, D. Conn., 2018 U.S. Dist. LEXIS 95345).
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June 7, 2018
Reinsurer, Insurer File Trial Briefs In $3.2M Asbestos Claims Dispute
SYRACUSE, N.Y. — A reinsurer and an insurer filed trial briefs June 5 with a New York federal court in a dispute over whether the reinsurer is obligated to pay $3.2 million in reinsurance proceeds for the insurer’s defense expenses from an asbestos claims settlement (Utica Mutual Insurance Co. v. Munich Reinsurance America Inc., Nos. 12-00196 & 13-00743, N.D. N.Y.).
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June 6, 2018
Parties Ordered To Outline Remaining Issues In Amtrak Contamination Cleanup Suit
BROOKLYN, N.Y. — A New York federal judge on June 1 ordered Amtrak and its insurers to submit a joint letter to the court outlining all issues that need to be resolved before a judgment can be issued in stage one of the environmental contamination dispute (Certain Underwriters at Lloyd’s, et al. v. National Railroad Passenger Corp., et al., No. 14-4717, E.D. N.Y., 2018 U.S. Dist. LEXIS 92150).