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Mealey's Insurance

August 22, 2023
4th Circuit Denies Insurer’s Motion For Rehearing In Silo Collapse Dispute

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeal denied a petition for rehearing or rehearing en banc filed by insurers in a coverage dispute arising out of the collapse of the insured’s silo, refusing to reconsider its finding that a district court erred in reducing a jury’s $7.6 million award in favor of the insured based on the conclusion that the district court did not properly calculate the period of restoration pursuant to the policy’s terms.
August 22, 2023
Parties In Reinsurance Row Dispute Bifurcating Declaratory Judgment Claim

LOS ANGELES — Parties in a dispute over reinsurance billings have filed responses in a California court disagreeing on whether a declaratory judgment claim should be bifurcated, with the plaintiff saying it does not object to bifurcation and the defendants opposing bifurcation but saying it would be appropriate for the court to decide some factual issues before a jury trial.
August 18, 2023
Expert Will Help Advance Asbestos Coverage Suit, Nash Chapter 7 Trustee Says

NEW HAVEN, Conn. — Once the Chapter 7 trustee for debtor The Nash Engineering Co. hires an expert to analyze the company’s insurance coverage for asbestos claims, he will seek to have the automatic stay lifted so certain insurers can continue to prosecute their declaratory judgment coverage action, the trustee says in a status report filed in Connecticut federal court.
August 17, 2023
Reinsurer Seeks Leave To Seal Agreements In Cleanup Costs Coverage Row

PADUCAH, Ky. — Arguing that “the agreements are riddled with the sensitive competitive information,” a reinsurer in a coverage dispute filed an unopposed motion in Kentucky federal court seeking leave to seal redacted versions of a third-party administrative services agreement (ASA) and a reinsurance agreement.
August 16, 2023
Judge: Insurers’ Bids To Nix AFFF Coverage Case Moot In Light Of Amended Complaint

CHARLESTON, S.C. — A federal judge in South Carolina on Aug. 15 issued a text order on the docket ruling that all pending motions to dismiss an insurance coverage action brought by a defendant in the multidistrict litigation for the firefighting agent aqueous film forming foam (AFFF) are moot in light of the manufacturer’s amended complaint.
August 15, 2023
All-Risk Policies Provide Coverage For Wind-Driven Rain, Federal Judge Says

SEATTLE — A Washington federal judge granted an insured condominium association’s motion for summary judgment in a coverage dispute over millions of dollars of hidden water damage sustained by the association’s buildings by wind-driven rain after determining that coverage is owed under two sets of policies for wind-driven rain when interpreting the policies’ language based on an ensuing loss provision and the efficient proximate rule.
August 15, 2023
Requests For Compensatory, Emotional Distress Damages In Mold, Water Suit Dismissed

PHILADELPHIA — A Pennsylvania federal judge dismissed an insured’s requests for compensatory damages and emotional distress damages in a water and mold damage coverage suit because compensatory damages are not available in connection with a bad faith claim and emotional distress damages are not available in connection with a breach of contract claim.
August 15, 2023
Insurer Says District Court’s Ruling On Misrepresentations Must Be Reversed

ATLANTA — A district court’s ruling that an insurer could not demonstrate reliance upon its insureds’ fraudulent misrepresentations regarding mold damage in an insured hotel must be reversed because the district court failed to view the evidence in the insurer’s favor as the nonmoving party, an insurer argues in a cross-appeal reply brief filed in the 11th Circuit U.S. Court of Appeals.
August 14, 2023
Pro Rata Method Of Allocation Applies In Coverage Suit Over Hog Farm Operation

RALEIGH, N.C. — In two separate opinions, a North Carolina judge determined that underlying property damage and bodily injury lawsuits stemming from the operation of a hog farm must be construed as arising out of a single occurrence and that a pro rata method of allocation must be applied to excess policies because a pro rata method of allocation is consistent with the allocation method set forth by the North Carolina Supreme Court.
August 11, 2023
Georgia Panel Affirms Dismissal Of Coronavirus Coverage Dispute

ATLANTA — A Georgia appeals panel affirmed a lower court’s grant of insurers’ motion to dismiss their mutual insured’s breach of contract lawsuit seeking coverage for its losses arising from the COVID-19 pandemic, saying the “overwhelming majority” of federal and state courts have rejected similar pandemic coverage claims.
August 09, 2023
Justice Seals Communications With Liquidated Insurer, But Not Asbestos Settlement

NEW YORK — A New York justice found no good reason to seal or redact the amount a liquidator settled asbestos claims for, but said communications among the liquidator, counsel and the referee who oversaw the settlements included discussion of litigation strategy and would be sealed.
August 08, 2023
State Farm: AI Claims Handling Allegations Don’t Establish Fair Housing Case

CHICAGO — Property insurance lacks sufficient connection to the sale of a home for liability under the Fair Housing Act (FHA), an insurer tells a federal judge in Illinois in urging dismissal of claims alleging that the company employs a discriminatory artificial intelligence during the claims handling process.
August 07, 2023
Insurer Owes $3.5M For Defense Costs, Fees Incurred In Toxic Emissions Suit

MIAMI — An insurer owes its insured approximately $3.5 million in damages and attorney fees and costs incurred by the insured for an underlying lawsuit alleging that toxic emissions created by the insured’s practice of sugarcane burning caused property damage and bodily injuries, a Florida federal judge said in partly granting the insured’s motion for summary judgment.
August 07, 2023
No Coverage Owed For Underlying PFAS Contamination Suit, Insurer Says In Complaint

HOUSTON — No coverage is owed to an insured for an underlying suit arising out of the contamination of containers with perfluoroalkyl and polyfluoroalkyl substances (PFAS) because the contamination occurred prior to the effective date of a primary pollution liability policy and an environmental excess liability policy, an insured maintains in a complaint filed Aug. 4 in Texas federal court.
August 07, 2023
Connecticut Judge Rules For Insurer In Coronavirus Coverage Dispute

HARTFORD, Conn. — A Connecticut judge granted a business owner insurer’s motion for summary judgment in its insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic, rejecting the insured’s argument that the adhesion of coronavirus-infected respiratory droplets to its property caused direct physical loss or damage.
August 03, 2023
Judge Denies Insurer JMOL Or New Trial, Insured Interest After Water Damage Verdict

MOBILE, Ala. — A federal judge in Alabama on Aug. 2 denied an insurer’s renewed motion for judgment as a matter of law or a new trial following a nearly $170,000 verdict against it in an insurance dispute over the handling of a property damage claim after Hurricane Sally, adopting as its own the insured church’s argument that it proved through expert testimony that its claimed losses were covered under the policy and that the jury was properly instructed as to causation.
August 02, 2023
Breach Of Contract, Bad Faith Claims Fail In Water, Mold Damage Suit

MOBILE, Ala. — Breach of contract and bad faith claims against a homeowners insurer fail because the insureds did not show that their home sustained a direct physical loss as a result of a hurricane or that a material issue of dispute exists as to whether the insurer acted in bad faith in investigating and adjusting their claim for water and mold damages, an Alabama federal judge said in granting the insurer’s motion for summary judgment.
August 01, 2023
Panel Affirms Ruling In Favor Of Insurer In Pollution Suit On Duty To Defend Issue

NEW ORLEANS — No coverage is afforded for an underlying suit against an insured alleging that the insured’s junkyard operations polluted stormwater runoff because the policies’ pollution exclusion bars coverage for the underlying allegations, the Fifth Circuit U.S. Court of Appeal said July 31 in affirming a district court’s ruling.
August 01, 2023
Panel Affirms Ruling In Insurer’s Favor In Medical Provider’s COVID-19 Suit

PORTLAND, Ore. — After the Oregon Supreme Court declined to answer a certified question in a coronavirus coverage dispute, the Ninth Circuit U.S. Court of Appeals on July 31 reassumed jurisdiction and concluded that the Oregon high court would interpret the phrase “direct physical loss or damage” to require physical alteration of the insured property and affirmed a federal court’s finding that a medical provider insured failed to state a claim for coverage for its losses arising from the pandemic.
August 01, 2023
Insured Seeks 11th Circuit Panel Rehearing In Water Damage Suit

ATLANTA — An insured says panel rehearing of the 11th Circuit U.S. Court of Appeals’ decision affirming a district court’s ruling in favor of a commercial liability insurer in a water damage coverage dispute is warranted because the 11th Circuit panel did not properly interpret a policy’s water exclusion.
July 31, 2023
Insurer Files Complaint, Says No Coverage Owed For Underlying Lead Poisoning Suit

DETROIT — No coverage is owed to insureds for an underlying bodily injury suit arising out of lead paint exposure because the commercial general liability policy’s lead and hazardous properties exclusion bars coverage, the insurer asserts in a complaint filed in Michigan federal court.
July 31, 2023
3rd Circuit Dismisses Appeals In Asbestos Coverage Suit For Lack Of Jurisdiction

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on July 28 dismissed an excess insurer and an insured’s appeals in an asbestos coverage dispute for lack of jurisdiction after determining that the orders issued by the district court are injunctive orders that are subject to appellate review.
July 27, 2023
Insurer Owes More Than $90M For Past Defense Costs In Chemical Exposure Suit

CHICAGO — An insurer must reimburse its insureds for more than $90 million in defense costs incurred by the insureds for an underlying chemical exposure lawsuit arising out of discharges of ethylene oxide (EtO) from the insureds’ sterilization facilities, an Illinois federal judge said.
July 26, 2023
Damage Caused By Insured’s Fracking Work Is Not Occurrence, Panel Reiterates

PHILADELPHIA — Following a panel rehearing, a Third Circuit U.S. Court of Appeals panel on July 25 reiterated that an insurer owes no coverage to its insured for damages to natural gas wells caused by the insured’s fracking work because neither faulty workmanship nor failure to perform a contract in a workmanlike manner can be construed as an occurrence as required by the policy.
July 24, 2023
No Coverage Owed For Gas Station’s Losses Arising From Coronavirus, Panel Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of a gas station owner insured’s lawsuit seeking coverage for its economic losses arising from the coronavirus pandemic, concluding that the virus exclusion bars coverage because COVID-19 “is the efficient proximate cause” of the insured’s purported losses.