Mealey's Insurance : Mealey's : Legal News & Analysis

Mealey's Insurance

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.
July 24, 2023
No Additional Abrupt Collapse Coverage Owed, Insurer Argues To 10th Circuit

DENVER — An insurer and its claims service manager argue to the 10th Circuit U.S. Court of Appeals that a building owner insured is owed no coverage under an insurance policy’s additional abrupt collapse coverage, contending that the insured’s building “did not collapse because its structural capacity was not ‘substantially’ or ‘significantly’ impaired.”
July 24, 2023
District Court Erred In Reducing Contract Damages Award In Silo Collapse Suit

RICHMOND, Va. — A district court erred in reducing a jury’s $7.6 million award in favor of an insured in a coverage dispute arising out of the collapse of the insured’s silo because the court did not properly calculate the period of restoration pursuant to the policy’s terms, the Fourth Circuit U.S. Court of Appeals said in reversing a portion of the lower court’s ruling following the jury verdict.
July 24, 2023
New Hampshire High Court Majority Says Water Exclusion Is Ambiguous

CONCORD, N.H. — A water exclusion must be construed in favor of providing coverage for water damage sustained in an insured apartment building because the exclusion is ambiguous as to whether the word “drain” applies to shower and toilet drains, the majority of the New Hampshire Supreme Court said in affirming a trial court’s ruling in favor of the insured.
July 21, 2023
Insurers Urge Ohio High Court To Reverse Ruling In Lead Paint Coverage Suit

COLUMBUS, Ohio — The Ohio Supreme Court should reverse a state appellate court’s ruling that an insured’s obligation to contribute to a lead paint abatement fund constitutes damages under applicable insurance policies because the decision nullifies prior rulings made by the Ohio high court, the insurers maintain in a brief on the merits.
July 20, 2023
Insurer Says No Coverage Owed For Underlying Contamination Suit

SAN ANTONIO — No coverage is owed to an insured for an underlying suit alleging that discharges from the insured’s wastewater disposal well contaminated nearby land because the discharges were not sudden and accidental as required for the policy’s exception to a pollution exclusion to apply, an insurer contends in a complaint filed in Texas federal court.
July 19, 2023
11th Circuit Dismisses Developer’s Appeal Of Judgment For Insurer

ATLANTA — The 11th Circuit U.S. Court of Appeals has dismissed with prejudice a development company and its owner’s appeal of a lower court ruling granting summary judgment in favor of its commercial general liability insurer in a declaratory relief action over damage caused to a neighboring pond during a construction project after the parties jointly stipulated to the dismissal.
July 18, 2023
No Coverage For Contamination Suit Based On Claims In Progress Exclusion

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a district court’s ruling in favor of a commercial general liability insurer, agreeing with the lower court’s conclusion that insurer has no duty to defend its insured against an underlying environmental contamination suit because the policies at issue bar coverage for property damage claims that were in progress before the start date of coverage.
July 17, 2023
Panel: Personal Injury Suits Over Chemical Exposure Did Not Trigger CGL Coverage

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on July 14 affirmed a lower federal court’s dismissal of breach of contract claims against primary and excess commercial general liability insurers, finding that the insurers have no duty to defend or indemnify the appellants against underlying personal injury lawsuits as either additional insureds or third-party beneficiaries.
July 17, 2023
Panel Reverses, Says Insurers Have Duty To Defend Seller Of Contaminated Land

LOS ANGELES — A California appellate panel ruled that a trial court erred by granting summary adjudication in favor of two insurers on the duty to defend a lawsuit against an insured for violation of California’s unfair competition law (UCL) and other laws due to ongoing groundwater contamination at an industrial property it sold in 1995.
July 13, 2023
Insurer Breached Duty To Defend; Fact Issues Exist On Damages, Panel Says

HARRISBURG, Pa. — A panel of the Pennsylvania Commonwealth Court determined that an insurer breached its duty to defend its insured from 2006 through 2010 against environmental contamination claims asserted by the Pennsylvania Department of Environmental Protection (DEP); however, the panel said it is unclear whether the damages sought by the insured were caused by the insurer’s breach of the duty to defend.
July 13, 2023
Supreme Court Directs Response To Insurer’s Challenge To Asbestos Bankruptcy Plan

WASHINGTON, D.C. — The U.S. Supreme Court has asked Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. to respond to a petition for certiorari filed by their primary insurer asking the court to decide whether the insurer has standing to challenge the debtors’ reorganization plan, after the debtors failed to file any opposition to the petition or waive their response.
July 13, 2023
No Coverage For Shareholder Suit Arising Out Of Listeria Contamination In Ice Cream

NEW ORLEANS — Insurers owe no coverage for a shareholder’s derivative suit filed against an ice cream manufacturer following the discovery of Listeria contamination in the insured’s ice cream products because the underlying shareholder suit fails to allege an occurrence and does not seek damages caused by bodily injury as required for coverage to exist, the Fifth Circuit U.S. Court of Appeal said in affirming a district court’s ruling.
July 11, 2023
Toxic Exposure Suit Must Be Dismissed For Failure To Show Causation, Judge Says

MADISON, Wis. — A lawsuit alleging that a property owner was negligent in storing gas and propane containers in a garage below one of the property’s bedrooms must be dismissed because the plaintiffs failed to show that their exposure to gas and propane fumes was the cause of their illness, a Wisconsin federal judge said in granting a motion for summary judgment filed by the property owner and an insurer.
July 11, 2023
No Coverage Owed For Negligence, Wrongful Death Suits Filed After Gas Explosion

SCRANTON, Pa. — A Pennsylvania federal magistrate judge granted an insurer’s motion for summary judgment after determining that no coverage is owed for underlying negligence and wrongful death suits arising out of a gas explosion allegedly caused by an insured’s negligent inspections because the insured’s successor company is not a named insured on the policies and because there was no occurrence during the applicable policies’ period.
July 10, 2023
Black Homeowners Say State Farm’s AI Discriminates Against Them

CHICAGO — State Farm Fire & Casualty Co. trained the artificial intelligence at the heart of its claims processing system with historically biased housing and claims data, making the program much more likely to flag claims by black homeowners and causing delays in repairs and other harms, plaintiffs tell a federal judge in Illinois in opposing dismissal of a class action.