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

Mealey's Catastrophic Loss

April 13, 2023
Judge: Insured Businesses ‘Fatally Undermined’ Their COVID-19 Interruption Suit

LOS ANGELES — A California federal judge dismissed without leave to amend two businesses’ lawsuits accusing their insurer of violating California’s unfair competition law (UCL) by denying them coverage for damages caused by the suspension of their operations during government-ordered shutdowns, finding that they “fatally undermined” their argument opposing application of a virus exclusion in the policies by acknowledging that the shutdowns were caused by COVID-19.
April 12, 2023
5th Circuit Affirms No Coverage Owed For Dental Insureds’ COVID-19 Losses

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 11 affirmed a lower federal court’s ruling in favor of an insurer in a coverage dispute arising from the coronavirus, finding that Cajun Conti, LLC v. Certain Underwriters at Lloyd's, London forecloses the insureds’ arguments on appeal.
April 12, 2023
No Coverage Owed For Hurricane Irma Damage To Growing Crops, 11th Circuit Affirms

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurer in its lawsuit disputing coverage for Hurricane Irma damage to a farm owner insured’s growing crops, finding that the plain language of the policy makes clear that it does not insure growing crops.
April 12, 2023
Insured’s Expert Testimony Is Curtailed In Homeowner’s Coverage Dispute

HOUSTON — A Texas federal judge has partially granted and partially denied a motion to exclude an insured’s expert in an insurance coverage dispute for damage caused by a storm after finding that certain of the expert’s opinions aren’t admissible under Federal Rule of Evidence 702.
April 12, 2023
Homeowners Sue Insolvent Insurer, Guaranty Association Over Hurricane Ida Damage

NEW ORLEANS — Louisiana homeowners sued an insolvent insurer and the Louisiana Guaranty Association (LIGA) as the purported guarantor for the insurer, asserting claims for breach of contract and breach of the duty of good faith and fair dealing related to the insurer’s alleged failure to compensate them for their damage from Hurricane Ida.
April 11, 2023
9th Circuit Certifies Coronavirus Coverage Question To Oregon Supreme Court

SEATTLE — The Ninth Circuit U.S. Court of Appeals on April 10 certified a question to the Oregon Supreme Court asking whether “the actual or potential presence of the COVID-19 virus on an insured's premises constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
April 11, 2023
Exclusions Bar Coverage For Restaurant’s COVID-19 Losses, California Panel Affirms

SANTA ANA, Calif. — A California appeals panel on April 10 held that although a restaurant operator insured has demonstrated that there is potential for coverage for its business income losses resulting from the governmental orders in response to the coronavirus pandemic, the insurer has established that the policy’s “ordinance or law” and virus exclusions precluded coverage as a matter of law.
April 10, 2023
Insured: Insurer Is Distracting N.Y. High Court From Controlling Policy Language

ALBANY, N.Y. — The owner and operator of numerous restaurants replied to a commercial property insurer’s response to its appeal of the First Department New York Supreme Court Appellate Division’s affirmation of a lower court’s dismissal of its coverage lawsuit arising from an alleged tens of millions of dollars in revenue loss prompted by the coronavirus pandemic, asking the New York Court of Appeals to reject the insurer’s attempt to distract it from the policy’s controlling language.
April 10, 2023
7th Circuit Refuses To Rehear No Coverage Ruling In $5.3M COVID-19 Suit

CHICAGO — The Seventh Circuit U.S. Court of Appeals denied an insured’s petition to rehear its March 2 ruling that affirmed a lower federal court’s dismissal of its declaratory judgment lawsuit seeking commercial insurance coverage for its more than $5.3 million in claimed derivative losses arising from the coronavirus pandemic.
April 07, 2023
California Insurance Commissioner Approves Stipulation In Premium Overcharge Dispute

LOS ANGELES — California Insurance Commissioner Ricardo Lara approved the terms of a stipulation between the California Department of Insurance (CDI) and Kemper Independence Insurance Co. settling the CDI’s allegation that the insurer violated California Insurance Code and California Code of Regulations when it failed to seek the commissioner’s prior approval of a change to its wildfire surcharge.
April 07, 2023
Federal Judge Dismisses Hurricane Harvey Coverage Dispute After Parties Settle

HOUSTON — A federal judge in Texas dismissed without prejudice a Hurricane Harvey coverage dispute after the insureds and their insurance broker and agent reached a settlement.
April 06, 2023
6th Circuit Dismisses Church’s Appeal Over Water Damage No-Coverage Ruling

CINCINNATI — The Sixth Circuit U.S. Court of Appeals granted a stipulated motion to dismiss with prejudice filed by parties in an appeal of a federal district court’s finding that an insurer did not breach its contract with a church by failing to provide coverage for water damage stemming from a leaky roof based on the policy’s negligent work exclusion, which bars coverage for the claim.
April 06, 2023
Hurricane Damage Suit Against Insolvent Insurer Remanded For Lack Of Diversity

NEW ORLEANS — A Louisiana federal judge granted insureds’ motion for leave to file an amended complaint and ordered the case to be remanded to state court in their breach of contract suit alleging that a now-insolvent insurer failed to provide adequate payment for alleged property damage related to Hurricane Ida, finding that adding the Louisiana Insurance Guaranty Association (LIGA) as the successor-in-interest to the insurer defeats “diversity of citizenship between the parties.”
April 05, 2023
California High Court Accepts Certified Question In Coronavirus Coverage Suit

SAN FRANCISCO — The California Supreme Court accepted a certified question from the Ninth Circuit U.S. Court of Appeals asking whether an insurance policy’s virus exclusion is unenforceable in a coverage lawsuit brought by owners, operators and managers of two Napa Valley, Calif., restaurants in the wake of the coronavirus pandemic.
April 04, 2023
5th Circuit Affirms Dismissal Of Orthopedic Firm’s Coronavirus Coverage Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 3 affirmed lower federal court’s dismissal of an orthopedic firm insured’s amended complaint for declaratory relief, bad faith, fraud and negligent misrepresentation over the denial of its business interruption claim related to COVID-19 shutdown orders, finding that the insured fails to satisfy the requirement of pleading an “accidental direct physical loss” to trigger coverage under the insurance policy.
March 30, 2023
Panel: Fact Issues Exist As To Whether Insurer Was Prejudiced By Untimely Notice

WEST PALM BEACH, Fla. — A Florida appeals panel on March 29 held that there is an issue of material fact regarding whether a homeowners insurer was prejudiced by the insureds’ lack of timely notice of their property damage caused by Hurricane Irma, reversing a lower court in part.
March 30, 2023
D.C. Panel: Restaurants Did Not Incur Direct Physical Loss From COVID-19 Shutdown

WASHINGTON, D.C. — The District of Columbia Court of Appeals affirmed a lower court’s denial of insureds’ expedited motion for summary judgment and grant of their all-risk insurer’s cross-motion for summary judgment in a coronavirus coverage dispute, finding that the insureds’ “loss of use” of their properties as a result of D.C. Mayor Muriel Bowser's shutdown orders was not a “direct physical loss” that triggered insurance coverage.
March 30, 2023
Federal Judge Dismisses Thunderstorm Coverage Suit After Parties Reach Settlement

JASPER, Ala. — A federal judge in Alabama dismissed with prejudice an insured’s lawsuit seeking coverage for property damage allegedly caused by a 2019 thunderstorm after the parties indicated that they reached a settlement.
March 28, 2023
Panel Affirms Judgment Against Insurer In Bad Faith Suit Over Hailstorm Damage

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 27 affirmed a lower federal court’s judgment against an insurer in an insured’s breach of contract and bad faith lawsuit arising from hailstorm damage, rejecting the insurer’s argument that a $285,000 jury award for its breach of contract is excessive.
March 27, 2023
Burger Chain Asks 9th Circuit To Rehear No Coverage Ruling For Coronavirus Losses

PASADENA, Calif. — In-N-Out Burgers filed a petition for panel rehearing and rehearing en banc challenging the Ninth Circuit U.S. Court of Appeals’ March 10 ruling that affirmed a lower court’s dismissal of its breach of contract lawsuit against its commercial property insurer, arguing that the Ninth Circuit should correct or withdraw its ruling and stay the appeal pending the California Supreme Court’s answer to the Ninth Circuit’s certified question in Another Planet Entertainment, LLC v. Vigilant Ins. Co. to determine whether “the actual or potential presence of the COVID-19 virus on an insured's premises” constitutes “direct physical loss or damage to property” to trigger coverage under an insured’s commercial property insurance policy.
March 27, 2023
Panel Affirms Dismissal Of Unjust Enrichment Suit In Travel Insurance Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on March 24 affirmed a lower federal court’s dismissal of a putative class action that was brought against an insurance plan administrator and an insurer, rejecting the plaintiff’s contention that the defendants were unjustly enriched when they retained the post-departure coverage portion of his travel insurance premium after his international trip was canceled because of the coronavirus pandemic.
March 24, 2023
Breach Of Contract, Bad Faith Claims Related To Damage Estimate Can Proceed

LAKE CHARLES, La. — An insured commercial property owner’s breach of contract and bad faith claims related to the value of the insured’s property damages and property depreciation arising out of damages caused Hurricanes Laura and Delta can proceed, a Louisiana federal judge said after determining that the insured presented evidence that the insurer’s estimate of the damages may have been undervalued.
March 23, 2023
Illinois Panel Affirms Rulings In Favor Of Insurer, Agent In COVID-19 Suit

CHICAGO — An Illinois appeals court panel on March 22 affirmed a trial court’s grant of a commercial property insurer’s motion for judgment on the pleadings and an insurance agent’s motion to dismiss a lawsuit brought by dental insureds, finding that the insureds did not incur “direct physical loss of or damage to” their properties to trigger coverage for their claimed business losses arising from their suspension of elective dental procedures during the initial outbreak of the coronavirus pandemic.
March 23, 2023
Insurer Asks 11th Circuit To Reverse Appraisal Order In Hurricane Irma Dispute

ATLANTA — An insurer asks the 11th Circuit U.S. Court of Appeals to reverse a Florida federal court’s order compelling appraisal in a Hurricane Irma coverage lawsuit brought by a condominium association insured, arguing that there “is nothing normal to this ‘new normal’ of compelling appraisal upon mere motions and argument of counsel.”
March 23, 2023
Texas High Court Grants Emergency Stay To Insurers In Winter Storm Coverage Suit

AUSTIN, Texas — The Texas Supreme Court granted insurers’ emergency motion to stay pending mandamus review of a lower court’s ruling denial of their plea for an order abating a winter storm coverage dispute until 30 days after the insured submits to an examination under oath (EUO).