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Mealey's Insurance

  • June 24, 2019

    Indiana Appeals Panel Says Insured’s Bad Faith Suit Is Barred By Res Judicata

    INDIANAPOLIS — The Indiana Court of Appeals on June 20 affirmed the dismissal of an insured’s breach of contract and bad faith complaint against her homeowners insurer after determining that the insured’s complaint, seeking coverage for water and mold damage, is barred by the doctrine of res judicata because the same claims between the same parties were litigated to a final conclusion on the merits in a prior lawsuit filed by the insured (Brenda White v. American Family Mutual Insurance Co., No. 18A-CT-2874, Ind. App., 2019 Ind. App. Unpub. LEXIS 766).

  • June 24, 2019

    Insured Failed To Support Claim For Punitive Damages In Water Coverage Dispute

    NEWARK, N.J. — An insured homeowner seeking coverage for water damage to her home cannot maintain a claim for punitive damages against her insurer because the insured failed to allege that the insurer’s actions in partially denying her claim were driven by actual malice or a wanton and willful disregard, a New Jersey federal judge said June 20 in dismissing the claim for punitive damages (Elizabeth Johnson v. Encompass Insurance Co., No. 17-3527, D. N.J., 2019 U.S. Dist. LEXIS 103290).

  • June 24, 2019

    Bad Faith Dispute Over Flood Damage Remanded To State Court

    RIVERSIDE, Calif. — A federal judge in California on June 12 ruled that an adjuster was not improperly joined in an insurance breach of contract and bad faith lawsuit against a homeowners insurance provider and remanded the action to state court (Maria Gast v. Universal North America Insurance Co., et al., No. 19-0647, C.D. Calif., 2019 U.S. Dist. LEXIS 99582).

  • June 21, 2019

    Fraser’s Insurers Battle Over Reopening State Court Contribution Action

    TACOMA, Wash. — A group of insurers of Chapter 11 asbestos debtor Fraser’s Boiler Service Inc. who are awaiting a decision from the Ninth Circuit U.S. Court of Appeals on whether their settlement with the debtor is valid on June 19 objected to a bid by a nonsettling insurer to allow state court contribution claims against the settling insurers to continue, calling the effort misguided and premature (In re:  Fraser’s Boiler Service, Inc., No. 18-41245, W.D. Wash. Bkcy.).

  • June 19, 2019

    Bad Faith Claim To Proceed; Questions Of Fact Exist On Assessment Of Injuries

    ORLANDO, Fla. — An auto insurer is not entitled to summary judgment on a bad faith claim brought against the insurer by a third-party claimant who was injured by an insured in an auto accident because questions of fact exist regarding the insurer’s assessment of the claimant’s injuries, a Florida federal judge said June 18 (Robyn Holtzapple v. Nationwide Mutual Fire Insurance Co., No. 17-2026, M.D. Fla., 2019 U.S. Dist. LEXIS 101494).

  • June 18, 2019

    No Coverage Afforded Under 3 Homeowners Policies For Cracking Foundation Walls

    VERNON, Conn. — A Connecticut judge on May 30 determined that no coverage is afforded under three homeowners policies for the cracking of the insured’s basement walls as a result of the use of defective concrete; however, the judge said a question of fact exists as to whether coverage is afforded under a fourth homeowners policy (Joseph Dinardo, et al. v. Pacific Indemnity Co., et al., No. CV-16-6010979-S, Conn. Super., Tolland Jud. Dist., 2019 Conn. Super. LEXIS 1206).

  • June 18, 2019

    Insurer Sues Insurer For Equitable Contribution Of Construction Defect Case

    LOS ANGELES — A general contractor’s insurer sued a subcontractor’s insurer on June 14 in a California federal court, asserting claims for declaratory relief and equitable contribution regarding coverage for an underlying construction defect case against the general contractor and subcontractor (Kinsale Insurance Co. v. HDI Global Specialty SE, No. 19-05219, C.D. Calif.).

  • June 17, 2019

    Majority Affirms Allocation Of $6M Settlement In Product Liability Coverage Dispute

    ST. LOUIS — A majority of the Eighth Circuit U.S. Court of Appeals on June 14 affirmed a lower federal court’s ruling that an excess insurer owes a designer and manufacturer insured $2.76 million for an underlying $6 million settlement of an underlying product liability lawsuit involving defective air ducts, rejecting the excess insurer’s argument that the lower court improperly interpreted the batch clause endorsement (National Union Fire Insurance Company of Pittsburgh, PA, et al. v. Donaldson Company Inc. v. Federal Insurance Co., No. 18-1063, 8th Cir., 2019 U.S. App. LEXIS 17897).

  • June 17, 2019

    South Carolina Federal Judge Realigns Parties In Asbestos Coverage Suit, Denies Remand

    GREENVILLE, S.C. — A South Carolina federal judge on June 14 determined that underlying claimants seeking damages as a result of exposure to asbestos must be realigned as plaintiffs in an  insured’s suit filed against its insurers because the insured and the underlying claimants seek the same relief of coverage under the defendant insurers’ policies (Covil Corp., by its duly appointed receiver, Peter D. Protopapas,  v. Zurich American  Insurance Co. et al., No. 18-3291, D. S.C., 2019 U.S. Dist. LEXIS 100023).

  • June 17, 2019

    Motion To Remand Water, Mold Damage Suit Denied; Judge Says Damages Exceed $75K

    BIRMINGHAM, Ala. — An Alabama federal judge on June 14 denied a motion to remand filed by insureds alleging claims for breach of contract and bad faith arising out of a water and mold damage claim after determining that the insurers produced sufficient evidence showing that the amount in controversy exceeds the federal jurisdictional minimum of $75,000 (Matthew B. Menendez, et al. v. American Strategic Insurance Corp., et al., No. 19-443, N.D. Ala., 2019 U.S. Dist. LEXIS 99975).

  • June 14, 2019

    New York Panel: Delay In Notice Of Environmental Claim Was Not Reasonable

    ALBANY, N.Y. — A New York appellate panel on June 13 affirmed a ruling in favor of two insurers in an environmental contamination suit after determining that the insurers were not timely notified of the claim filed against their insured and that no reasonable explanation was provided for the more than three-year delay in notifying the insurers of the claim (New York v. Diana L. Flora, et al., No. 526787, N.Y. Sup., App. Div., 3rd Dept., 2019 N.Y. App. Div. LEXIS 4768).

  • June 13, 2019

    Continuous Trigger Of Coverage Theory Applies To Asbestos Claims

    MILWAUKEE — A Wisconsin federal judge on June 10 determined that under applicable Wisconsin law, a continuous trigger of coverage theory must be applied to underlying asbestos personal injury claims filed against an insured and that an all-sums method of allocation must be applied to each insurance policy triggered by a claim (Eaton Corp. v. Westport Insurance Co., et al., No. 15-1157, E.D. Wis., 2019 U.S. Dist. LEXIS 97891).

  • June 11, 2019

    Parties Ordered To Participate In Settlement Conference In Contamination Coverage Suit

    MINNEAPOLIS — An insured and an insurer involved in a dispute over coverage for environmental contamination cleanup costs must participate in a settlement conference, a Minnesota federal magistrate judge ordered May 30 (Soo Line Railroad Co., doing business as Canadian Pacific v. The Travelers Indemnity Co., No. 18-1989, D. Minn.).

  • June 11, 2019

    5th Circuit Panel Refuses To Rehear Environmental Damage Coverage Dispute

    NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals on June 3 denied  a petition for rehearing filed by a company that conducted fracking operations on an insured's facility asking it to reconsider its ruling that reversed a federal court's finding that a site pollution legal liability insurer waived its subrogation rights under an onshore master services agreement (MSA) (Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir.).

  • June 10, 2019

    Pollution Exclusion Does Not Apply To Oil Contaminated By Insured’s Work, Appellant Says

    LOS ANGELES — A trial court correctly determined that a pollution exclusion does not bar coverage for contamination of oil in a storage tank caused by an insured’s work; however, the trial court incorrectly determined that the insurer was entitled to rescind the insured’s policy, the party seeking coverage for damage caused by the insured’s work argues in a May 22 brief to the Second District California Court of Appeal (NRG Delta LLC v. Endurance American Specialty Insurance Co., No. B285909, Calif. App., 2nd Dist., Div. 5, 2019 CA App. Ct. Briefs LEXIS 1450).

  • June 10, 2019

    Insurers: Coverage Barred Based On Lead Liability, Pollution Exclusions

    CHICAGO — No coverage is owed to an insured for claims asserted against the insured by the U.S. Environmental Protection Agency because the policies at issue bar coverage, the insurers maintain in a May 31 complaint filed in Illinois federal court (Markel Insurance Co., et al. v. J. Solotken & Co. Inc., No. 19-3661, N.D. Ill.).

  • June 6, 2019

    California High Court Hears Arguments On Notice Provision In Environmental Dispute

    SAN FRANCISCO — The California Supreme Court on June 4 heard oral arguments regarding whether California’s common-law notice-prejudice rule is a fundamental public policy and should be applied to a policy’s notice provision and consent provision in an environmental contamination coverage suit (Pitzer College v. Indian Harbor Insurance Co., No. S239510, Calif. Sup.).

  • June 6, 2019

    Insured Argues Coverage Owed For Underlying Chemical Exposure Liability Suits

    CHICAGO — An insured seeking coverage for underlying liabilities arising out of exposure to polychlorinated biphenyls argues in a June 3 response brief filed in Illinois federal court that an insurer’s motion for summary judgment should be denied because the insured was not a party to two settlement agreements, which the insurer claims releases it from liability (Magnetek Inc. v. The Travelers Indemnity Co., et al., No. 17-3173, N.D. Ill.).

  • June 5, 2019

    Texas High Court Denies Rehearing On Applicability Of Joint Venture Provision

    AUSTIN, Texas — The Texas high court on May 31 denied a petition for rehearing filed by insurers in a coverage dispute arising out of the Deepwater Horizon oil spill in the Gulf of Mexico, refusing to reconsider its decision that an exception to a policy’s joint venture provision does not limit excess coverage for defense costs incurred by the insured (Anadarko Petroleum Corp., et al. v. Houston Casualty Co., et al., No. 16-1013, Texas Sup., 2019 Tex. LEXIS 526).

  • May 31, 2019

    Insured Ordered To Produce Additional Documents In Contamination Coverage Suit

    MINNEAPOLIS — Information related to an insured’s communications with its other insurers regarding coverage liabilities for environmental contamination cleanup costs incurred at the insured’s railyard are relevant to the insured’s dispute with another one of its insurers, a Minneapolis federal magistrate judge said May 29 in partially granting the insurer’s motion to  compel the production of interrogatory responses and documents (Soo Line Railroad Co., doing business as Canadian Pacific, v. The Travelers Indemnity Co., No. 18-1989, D. Minn.,  2019 U.S. Dist. LEXIS 90279).