Mealey's Insurance

  • March 27, 2020

    Underlying Suit Did Not Arise Out Of Pollution Condition, Judge Says

    RICHMOND, Va. — A Virginia federal judge on March 25 granted an insurer’s motion to dismiss after determining that no coverage is afforded for an underlying product contamination suit because the contamination was not caused by a pollution condition as required under the policy at issue (Atlantic Bulk Carrier Corp. v. AIG Specialty Insurance Co., No. 19-318, E.D. Va., 2020 U.S. Dist. LEXIS 52297).

  • March 27, 2020

    Earth Movement, Water Damage Exclusions Bar Coverage, Judge Says

    DOVER, Del. — A Delaware state judge on March 18 granted a homeowners insurer’s motion for summary judgment after determining that no coverage is owed for a pedestrian bridge and wall that was damaged during a rainstorm because the policy’s exclusions for earth movement and water damage preclude coverage (Eric Monzo, et al. v. Nationwide Property & Casualty Insurance Co., No. K18C-11-003 NEP, Del. Super., Kent Co., 2020 Del. Super. LEXIS 144).

  • March 27, 2020

    Insurer Failed To Prove It Is Entitled To Offset In Oil Spill Contamination Suit

    BROOKLYN, N.Y.  — An insurer failed to prove that it is entitled to offset any liability owed to a former client for a severed fuel oil line as the result of its settlement with the client’s insurer, the a New York appellate panel said March 18 (Richard Bennett, et al. v. State Farm Fire and Casualty Co., et al., No. 2018-11072, N.Y. Sup., App. Div., 2nd Dept., 2020 N.Y. App. Div. LEXIS 1941). 

  • March 26, 2020

    Breach Of Contract Claim Fails, Bad Faith Claim Proceeds In Ammonia Leak Dispute

    ROCHESTER, N.Y. — A New York federal judge on March 25 determined that an insured’s breach of contract claim cannot proceed but said that the insured’s bad faith claim can proceed because questions of fact exist regarding the insurer’s investigation and handling of the insured’s claim for product contamination following an ammonia leak in its warehouse (SatisPie LLC v. Travelers Property Casualty Company of America, No. 17-6234, W.D. N.Y., 2020 U.S. Dist. LEXIS 51861).

  • March 25, 2020

    5th Circuit Finds Subrogation Waiver Applies To Property Damage From Fire

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on March 9 reversed a federal judge’s ruling that a waiver of subrogation did not apply to damages to nonwork property that resulted from a fire that occurred while window restoration work was being done at a building after pointing out that the Mississippi Supreme Court decided Feb. 20 that the subrogation waiver was applicable (Liberty Mutual Fire Insurance Co., as subrogee of Chickasaw County School District v. Fowlkes Plumbing LLC, No. 18-60608, 5th Cir., 2020 U.S. App. LEXIS 7427).

  • March 25, 2020

    No Coverage Owed For Underlying Mold Exposure Suit, Judge Determines

    EAST ST. LOUIS, Ill. — A commercial general liability insurer has no duty to defend its insured against an underlying suit alleging injuries as a result of mold exposure in an insured building because the policy’s fungi or bacteria exclusion clearly precludes coverage, an Illinois federal judge said March 24 (Penn-Star Insurance Co. v. Zeller Properties Inc., et al., No. 17-1264, S.D. Ill., 2020 U.S. Dist. LEXIS 50548).

  • March 24, 2020

    California Federal Magistrate Judge Stays Water Damage Coverage Suit

    SAN FRANCISCO — A California federal magistrate judge on March 22 granted a homeowners insurer’s motion to stay a water damage coverage suit after determining that the parties will not be prejudiced by a stay (Lawrence Lui, et al. v. State Farm Fire and Casualty Co., No. 19-6337, N.D. Calif., 2020 U.S. Dist. LEXIS 49946).

  • March 23, 2020

    Property Damage Caused By Falling Cliff Excluded By Earth Movement Exclusion

    GREENBELT, Md. — An earth movement exclusion bars coverage for property damage claims submitted by insureds after their home was torn down following the collapse of a portion of a cliff because the falling of the cliff was clearly caused by earth movement, a Maryland federal judge said March 20 (James McWhorter, et al. v. Bankers Standard Insurance Co., No. 18-2452, D. Md., 2020 U.S. Dist. LEXIS 48668).

  • March 23, 2020

    Insurer Met Indemnity, Defense Obligations To Insured, Panel Affirms

    ATLANTA — The 11th Circuit U.S. Court of Appeals on March 13 affirmed a district court’s ruling in favor of an insurer because the insurer met its defense and indemnity obligations to its insured in an underlying suit arising out of the insured’s scrap metal shredding facility (QBE Specialty Insurance Co. v. Scrap Inc., Nos. 18-13926, 19-13894, 11th Cir., 2020 U.S. App. LEXIS 8015).

  • March 20, 2020

    No Coverage Owed For Insured’s Water Damages, 6th Circuit Majority Says

    CINCINNATI — The majority of the Sixth Circuit U.S. Court of Appeals on March 20 affirmed a district court’s ruling that an insurer was materially prejudiced by an insured’s late notice of a claim for water damage caused by burst water pipes because the insurer was not able to view the damage to the home as a result of the homeowner’s decision not to provide notice of the claim until after demolishing and repairing the damage (Timika Keathley v. Grange Insurance Company of Michigan, No. 19-1242, 6th Cir.).

  • March 20, 2020

    Kaiser Gypsum Insurers To Pay $50.6 Million For Superfund Site Cleanup Costs

    CHARLOTTE, N.C. — Ten settlements with insurers of Chapter 11 debtor Kaiser Gypsum Co. Inc. that will bring more than $50 million to an escrow fund to pay for the cleanup of two polluted sites in Washington state received approval March 12, according to a North Carolina federal bankruptcy court docket entry (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

  • March 19, 2020

    North Carolina Judge Says Insurer Lacks Standing To Assert Counterclaim

    RALEIGH, N.C. — A North Carolina judge on March 18 dismissed an excess insurer’s counterclaim in a coverage dispute arising out of the insured’s operation of a hog farm because the excess insurer failed to prove that it has standing to assert the counterclaim (Murphy-Brown LLC, et al. v. ACE American Insurance Co., et al., No. 19-2793, N.C. Super, Wake Co., 2020 NCBC LEXIS 32).

  • March 19, 2020

    Restaurant Argues Policy Covers Loss From Potential Shutdown Due To Coronavirus

    NEW ORLEANS — A French Quarter restaurant on March 16 sued its insurer, the state of Louisiana and the governor in a Louisiana court, seeking a declaration that its “all risk” insurance policy “extends coverage from direct physical loss and/or from a civil authority shut-down due to a global pandemic virus” and provides business income coverage if the coronavirus contaminates its restaurant (Cajun Conti LLC, et al. v. Certain Underwriters at Lloyd’s London, et al., No. 20-02558, La. Civ. Dist., Orleans Parish).

  • March 19, 2020

    Question Of Fact Exists On Policy’s Uncontrollable Fire Exception, Judge Says

    ANN ARBOR, Mich. — A Michigan federal judge on March 17 partially granted an insurer’s motion for summary judgment after determining that the policy’s pollution exclusion applies to an underlying carbon monoxide poisoning claim but denied the motion as it pertained to the policy’s uncontrollable fire exception because a question of fact exists as to whether the exception applies to provide coverage (Housing Enterprise Insurance Co. v. Hope Park Homes Limited Dividend Housing Association Limited Partnership., et al., No. 18-14022, E.D. Mich., 2020 U.S. Dist. LEXIS 45690).

  • March 17, 2020

    Judge Grants Homeowners Insurer’s Motion To Compel In Water, Mold Damage Suit

    CHARLESTON, S.C. — A South Carolina federal judge on March 16 granted a homeowners insurer’s motion to compel the deposition of an insured after determining that the insurer’s request is relevant to the water and mold damage coverage dispute (Steven Nielsen, et al. v. United Property & Casualty Insurance Co., No. 18-2310, D. S.C., 2020 U.S. Dist. LEXIS 45097).

  • March 17, 2020

    Asbestos Claimant’s Firm Seeks Rehearing In Effort To Hold Manville Broker Liable

    NEW YORK — A Second Circuit U.S. Court of Appeals panel could not have possibly determined whether published notice of Johns-Manville Corp.’s bankruptcy afforded adequate due process to future asbestos claimants of the company’s insurance broker because a copy of the actual notice was never entered into evidence, a claimant’s law firm says in a March 5 petition for rehearing (In re Johns-Manville Corp., Marsh USA, Inc. v. The Bogdan Law Firm, No. 18-2531, 2nd Cir.).

  • March 17, 2020

    Oregon High Court To Review Ruling In Asbestos, Contamination Coverage Dispute

    SALEM, Ore. — The Oregon Supreme Court on Feb. 21 agreed to hear a petition asking the  court to review an appeals court’s ruling that primary and excess insurers do not have to contribute to defense and indemnify costs for an insured’s environmental contamination and asbestos liabilities because the insurers did not assume the insured’s liabilities during a purchase agreement (Allianz Global Risks US Insurance Co. v. ACE Property & Casualty Insurance Co., No. S067017, Ore. Sup., 2020 Ore. LEXIS 119).

  • March 16, 2020

    No Coverage Owed For Contamination Costs Under Excess Policies, Panel Says

    NEW YORK — The Second Circuit U.S. Court of Appeals on March 12 affirmed a district court ruling that an insured seeking coverage for environmental remediation costs is not entitled to coverage under excess policies because the costs, when allocated on a pro rata basis over a 40-year period, do not reach the attachments points of the excess policies (Olin Corp. v. Certain Underwriters at Lloyd’s, London, et al., No. 19-424, 2nd Cir., 2020 U.S. App. LEXIS 8137).

  • March 13, 2020

    Rhode Island Judge Finds Coverage Exists; Fact Issues Remain As To Bad Faith Claim

    WARWICK, R.I. — A Rhode Island judge on March 11 granted summary judgment as to an insured’s breach of contract claim against its insurer, finding that coverage is not barred by a pollution exclusion, but denied summary judgment as to its bad faith claim because questions of fact remain (Dutchman Dental LLC v. The Providence Mutual Fire Insurance Company, No. KC-2016-1281, R.I. Super., Kent Co., 2020 R.I. Super. LEXIS 23).

  • March 13, 2020

    No Coverage Owed For Water Leak, Panel Says; Policy Excluded Coverage

    TRENTON, N.J. — The Appellate Division of the New Jersey Superior Court on March 3 reversed a ruling in favor of insured homeowners in a water damage coverage dispute after determining that the property insurance policy at issue clearly precludes coverage for water damages (Robert Cusamano, et al. v. New Jersey Insurance Underwriting Association, No. A-1704-18T2, N.J. Super., App. Div., 2020 N.J. Super. Unpub. LEXIS 438).