Mealey's Catastrophic Loss : Mealey's : Legal News & Analysis

Mealey's Catastrophic Loss

May 05, 2023
Insurance Guaranty Association Intervention Denied In Hurricane Coverage Suit

LAKE CHARLES, La. — A Louisiana federal magistrate judge denied the Louisiana Insurance Guaranty Association’s (LIGA’s) motion to intervene in a homeowner’s suit against a now-insolvent insurer seeking coverage for hurricane damage to her home, finding that LIGA “is not an intervenor of right” because LIGA’s statutory rights as an intervenor did not apply until after the insurer was deemed insolvent, which occurred after the suit was filed.
May 05, 2023
Insurer Asks Texas Appeals Court To Reverse Ruling In Storm Damage Coverage Suit

EDINBURG, Texas — An insurer asked a Texas appeals court to reverse a lower court’s summary judgment ruling in favor of an insured in a coverage dispute over storm damage, arguing that the lower court improperly granted the insured no-evidence summary judgment on whether it filed its storm damage claim within the policy’s one-year coverage period.
May 04, 2023
Insurer’s Declaratory Relief Suit Over Building Collapse Coverage Dismissed

ALEXANDRIA, La. — Ruling only that he concurred with a federal magistrate judge’s recommendation, a federal judge in Louisiana issued a judgment dismissing an insurer’s declaratory relief action against its insured contractor and a property owner in a coverage dispute stemming from the collapse of the property owner’s building during renovation work.
May 04, 2023
Church Seeks Costs After $170,000 Verdict In Water Damage Coverage Suit

MOBILE, Ala. — On the heels of a nearly $170,000 judgment entered in its favor in an insurance dispute over an insurer’s handling of a property damage claim after Hurricane Sally, a church is seeking an additional $7,998.74 in costs litigating the action, according to a bill of costs the church submitted in Alabama federal court.
May 04, 2023
Pollution, Contamination Exclusion Bars Coverage For Virus Claims, Judge Reiterates

PHILADELPHIA — A pollution and contamination exclusion included in primary and excess all-risk policies bars coverage for an insured hotel operator’s business losses sustained in the wake of the COVID-19 pandemic, a Pennsylvania judge said in denying the insured’s motion for reconsideration and rejecting the insured’s argument that the exclusion applies only to traditional environmental pollution claims.
May 04, 2023
Breach Of Contract, Bad Faith Claims Fail Against Insurer In COVID-19 Coverage Suit

NEW ORLEANS — Breach of contract and bad faith claims alleged against a commercial property insurer cannot proceed because the insureds failed to show that their properties sustained a direct physical loss as a result of governmental shutdown orders issued in the wake of the COVID-19 pandemic, a Louisiana federal judge said in granting the insurer’s motion to dismiss.
May 03, 2023
Bad Faith Claim Cannot Proceed In Tornado Damage Coverage Dispute, Judge Says

ANNISTON, Ala. — A claim for bad faith alleged against a homeowners insurer and arising out of a coverage dispute for tornado damages cannot proceed because the evidence does not support a finding that the insurer intentionally failed to conduct an inspection of the damages and that the insurer did not have a reasonable basis to deny coverage for additional damages, an Alabama federal judge said in partially granting the insurer’s motion for summary judgment.
May 03, 2023
Panel: Insureds Fail To Allege Physical Alteration To California Movie Theaters

LOS ANGELES — A California appeals panel held that movie theater owner insureds have failed to allege a covered loss under their “‘all risk’” commercial property and general liability insurance policy because they have not demonstrated a physical alteration of their insured property, affirming a lower court’s grant of the insurer’s motion for judgment on the pleadings in the insured’s breach of contract and bad faith lawsuit arising from the coronavirus pandemic.
May 03, 2023
Partial Grant Issued To Insurer Over Fraud Alleged In Bad Faith Fire Dispute Claim

DENVER — A Colorado federal judge granted in part an insurer’s summary judgment motion in a homeowner’s bad faith and breach of contract suit against it after the insurer denied a claim for coverage following an electrical fire, finding that the motion is granted as to the bad faith and unreasonable denial claims because the insurer’s “conduct was reasonable” when it deemed her policy void for failing to tell the insurer that she no longer resided at the property.
May 01, 2023
5th Circuit To Review Challenge To Arbitrability Of $7M Hurricane Ida Claims

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeal has granted an unopposed request to review a federal court’s ruling compelling arbitration of a dispute over an insured’s claims for millions of dollars in damages caused by Hurricane Ida and for bad faith against its foreign and domestic insurers, after the insured and insurers both stated that the arbitrability of such claims is the subject of a “split among the Louisiana federal district courts.”
April 28, 2023
Panel: Tribe Fails To Show COVID-19 Caused Physical Property Damage To Casino

VENTURA, Calif. — A California appeals court panel on April 27 found that an insured Indian tribe and its experts failed to present sufficient evidence to demonstrate that the COVID-19 virus caused property damage to the tribe’s casino and resort, affirming a summary judgment ruling in favor of the insurer in the tribe’s breach of contract and bad faith lawsuit seeking coverage for its losses arising from the pandemic.
April 28, 2023
8th Circuit Affirms Dismissal Of Minnesota Medical Center’s COVID-19 Coverage Suit

ST. LOUIS —The Eighth Circuit U.S. Court of Appeals affirmed a federal court’s dismissal of a medical center insured’s breach of contract and declaratory judgment lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding the insured failed to assert that SARS-CoV-2 had any effect on its property.
April 26, 2023
Panel Reverses Choice-Of-Law Analysis, Affirms No Coverage Ruling In COVID-19 Suit

TRENTON, N.J. — A New Jersey appeals panel held that a lower court improperly applied a choice-of-law analysis in a coronavirus coverage dispute but properly held that the existence of the virus in the hotel air or on hotel surfaces fails to constitute direct physical loss or damage to the insured premises, affirming in part and reversing in part.
April 25, 2023
Illinois Judge: Unclear Whether Retirement Facilities Incurred Covered Crisis Event

CHICAGO — An Illinois judge granted insurers’ motion to dismiss insureds’ claims seeking a declaratory judgment as to Interruption by Communicable Disease, Contaminated Food/Communicable Disease and Preservation of Property (PP) coverage for their losses incurred by their continuing care retirement facilities following the coronavirus outbreak but refused to dismiss the insureds’ declaratory judgment and breach of contract claims as to the Crisis Management coverage and their breach of contract claim as to the Contaminated Food/Communicable Disease coverage under the primary insurance policies.
April 25, 2023
Denial Of Guaranty Association Intervention Bid Affirmed In Hurricane Coverage Row

LAKE CHARLES, La. — A Louisiana federal judge affirmed a magistrate judge’s denial of the Louisiana Insurance Guaranty Association’s (LIGA) motion to intervene as a statutory obliger in a bad faith insurance coverage suit filed against a homeowners insurer over purported hurricane damages, finding that the magistrate correctly determined that LIGA failed to explain its interest in the suit.
April 21, 2023
Questions Of Fact Exist As To Whether Property Insurer Acted In Good Faith

LAKE CHARLES, La. — A Louisiana federal judge denied an insured property owner’s motion for summary in a hurricane damage coverage dispute after determining that questions of fact exist regarding whether the insured properly submitted a satisfactory proof of loss and whether the insurer acted in good faith in failing to timely tender payment for the losses incurred.
April 21, 2023
Hurricane Coverage Suit Remanded For Failure To Show More Than $75,000 Is In Dispute

NEW ORLEANS — A breach of contract and bad faith lawsuit filed against a property insurer seeking additional coverage for damages sustained to insured properties during Hurricane Ida must be remanded to state court because the insurer failed to show that the amount in controversy exceeds the federal jurisdictional minimum amount of $75,000.
April 20, 2023
Bound by 10012 Holdings, Panel Affirms Dismissal Of Hotel’s COVID-19 Coverage Suit

NEW YORK — The Second Circuit U.S. Court of Appeals on April 20 affirmed a federal court’s dismissal of a hotel owner insured’s lawsuit seeking coverage for its business losses arising from the coronavirus pandemic, saying that 10012 Holdings, Inc. v. Sentinel Insurance Company, Ltd. bounds the panel to rule that no coverage was triggered.
April 19, 2023
9th Circuit Denies Burger Chain’s Petition For Rehearing In COVID-19 Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 18 unanimously denied In-N-Out Burgers’ petition for panel rehearing and rehearing en banc challenging its March 10 ruling that affirmed a lower court’s dismissal of its breach of contract lawsuit against its commercial property insurer seeking business interruption coverage for its coronavirus losses.
April 19, 2023
Judge Approves $17.3M Settlement Between Receiver, Insurers In Collapse Suit

MIAMI — A Florida judge signed an order granting a joint motion for approval of a $17.3 million settlement and release agreement between a receiver and the insurers of the Champlain Towers South (CTS) Condominium Association in a consolidated case over the June 2021 partial collapse of the CTS condominium building in Surfside, Fla..
April 18, 2023
Bound By Connecticut High Court Ruling, Panel Says No Coverage For COVID-19 Losses

NEW YORK — The Second Circuit U.S. Court of Appeals on April 17 affirmed a lower federal court’s finding that insureds failed to plausibly assert “direct physical loss or damage” to their insured property to trigger business interruption and extra expense coverage under their policy, noting that it is bound by the Connecticut Supreme Court’s recent holding in Connecticut Dermatology Group, PC v. Twin City Fire Insurance Company as to the meaning of the phrase “direct physical loss.”
April 17, 2023
9th Circuit Affirms Dismissal Of Restaurant’s Coronavirus Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court’s grant of an insurer’s motion to dismiss a restaurant and banquet hall insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the virus exclusion bars coverage.
April 17, 2023
Insured Fails To Assert Efficient Cause Of Its Losses Is Anything But Coronavirus

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court’s dismissal of a commercial real estate investment company’s breach of contract and bad faith lawsuit seeking coverage for its economic losses arising from the coronavirus pandemic, finding that the policy’s virus exclusion bars all coverage because the insured fails to plausibly assert that the efficient cause of its losses is anything but the coronavirus.
April 14, 2023
Policies Cover Named Windstorms, 11th Circuit Says, Reverses Ruling For Insurer

ATLANTA — The 11th Circuit U.S. Court of Appeals on April 13 held that a Florida church insured’s 2016 and 2017 insurance policies cover named windstorms, reversing a federal court’s summary judgment ruling in favor of the insurer in a coverage dispute arising from hurricanes Matthew and Irma.
April 14, 2023
Florida Panel Reverses JNOV In Favor Of Insured In Hurricane Irma Coverage Suit

WEST PALM BEACH, Fla. — A Florida appeals panel held that the evidence taken in the light most favorable to an insurer supported a jury verdict in its favor and a lower erred in granting a judgment notwithstanding the verdict (JNOV) to the insured in its breach of contract lawsuit over Hurricane Irma damage, reversing the lower court and directing it to reinstate the jury verdict.