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

Mealey's Catastrophic Loss

July 22, 2024
5th Circuit Panel Refuses To Reconsider No Coverage Ruling In Hailstorm Suit

NEW ORLEANS — A per curiam panel of the Fifth Circuit U.S. Court of Appeals on July 19 denied insureds’ petition to reconsider its earlier finding that a lower federal court correctly determined that under Texas Supreme Court precedent, an insurer is entitled to summary judgment on insureds’ bad faith and statutory damages claims in a hailstorm coverage dispute.
July 22, 2024
Contamination, Pollution Exclusion Bars Coverage For Coronavirus Losses

TOPEKA, Kan. — The Kansas Court of Appeals on July 19 affirmed a trial court’s ruling in favor of all-risk insurers that denied coverage for COVID-19 losses sustained by an insured because the policies’ contamination or pollution exclusion bars coverage for any contamination, seepage or pollution that endangers or threatens to endanger the health, safety or welfare of individuals.
July 19, 2024
Bad Faith Claims Related To Initial Denial Of Hurricane Claim Cannot Proceed

MONROE, La. — A homeowners insurer is entitled to summary judgment on bad faith claims related to the insurer’s initial denial of coverage for hurricane damages because there is no evidence to support a finding that the initial denial of coverage was unreasonable; however, the insurer is not entitled to summary judgment on the bad faith claims related to the insurer’s post-litigation conduct because the record is not clear as to when the insurer received additional information in support of the insured’s claim for damages, a Louisiana federal judge said July 18 in partially granting the insurer’s motion for summary judgment.
July 19, 2024
Insureds File Contempt Motion In Hurricane Coverage Row With Guaranty Association

LAKE CHARLES, La. — Insureds whose rental property purportedly incurred hurricane damage filed a contempt motion in Louisiana federal court against an independent adjustor for its failure to respond to a subpoena in their hurricane coverage dispute with the Louisiana Insurance Guaranty Association (LIGA), which was substituted for their now-insolvent insurer.
July 18, 2024
Reinsurer Communication, ‘Apex Doctrine’ Discovery Disputes Decided In Coverage Row

SAN FRANCISCO — In separate orders resolving two discovery disputes in a breach of contract and bad faith suit over coverage for property damages wineries sustained during California wildfires, a California federal magistrate judge granted a motion to compel production of the insurer’s communications with reinsurers regarding the claims and denied an “apex doctrine” request to bar one of insurer’s employees from deposition.
July 17, 2024
Fact Issues Remain On Whether Pollution Exclusion Applies To Coronavirus Losses

SANTA ANA, Calif. — A California federal judge denied an insurer’s motion for summary judgment on the issue of the applicability of a pollution and contamination exclusion after determining that questions of fact exist as to whether the exclusion bars coverage for business losses sustained by an insured in the wake of the COVID-19 pandemic; however, the judge granted the insurer’s motion on a bad faith claim after determining that the claim cannot survive because a legitimate coverage dispute exists.
July 17, 2024
Subcontractors Are Not Parties To Subrogation Waiver, Maryland High Court Affirms

ANNAPOLIS, Md. — The Supreme Court of Maryland affirmed an appeals court’s finding that contractual waivers of subrogation do not bar an all-risk insurer’s claims alleging that tornado damage to an Amazon warehouse was caused by subcontractors’ negligence in designing and building the warehouse because the subcontractors were not intended third-party beneficiaries of the subrogation waiver, further affirming the appeal court’s ruling that the language of the subcontract waiver clause is ambiguous.
July 17, 2024
Stay Granted In Hurricane Coverage Row After Guaranty Association Substitution

LAKE CHARLES, La. — A Louisiana federal judge granted a motion to stay filed by defendant Louisiana Insurance Guaranty Association (LIGA), which was substituted for a now-insolvent insurer in a hurricane coverage dispute, finding the stay appropriate due to the possibility of the restoration company that intervened in federal court intervening in a similar state court suit.
July 17, 2024
11th Circuit Affirms Insured Did Not Establish Covered Loss Caused Property Damage

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a Florida federal judge’s grant of an insurance company’s motion for summary judgment in a man’s breach of contract dispute over the insurer’s denial of a claim stemming from damages his property sustained during Tropical Storm Eta, finding that there is no genuine dispute that the policy’s gradual or sudden loss exclusion applied to the insured’s claim.
July 16, 2024
Judge Orders Arbitration Of Coverage Dispute Over Hurricane Ida Damages

BATON ROUGE, La. — A Louisiana federal judge granted a group of insurers’ motion to compel arbitration of claims brought against them by a commercial property owner seeking payment for damages from Hurricane Ida, finding under principles of equitable estoppel that the arbitration agreement is enforceable as to the domestic insurer as well as the foreign insurers.
July 16, 2024
Federal Judge Rules For Homeowners Insurer In Dispute Over Tornado Damage

DALLAS — A federal judge in Texas granted a homeowners insurer’s motion for summary judgment in a insured’s breach of contract and bad faith lawsuit arising from property damage caused by a 2019 tornado, finding that summary judgment is proper because the insured has already received the benefits she is owed under her insurance policy.
July 15, 2024
Panel Affirms No Coverage Ruling In Manufacturer’s Coronavirus Coverage Suit

NEW YORK — The Second Circuit U.S. Court of Appeals on July 12 affirmed a lower federal court’s judgment in favor of an insurer in a manufacturer insured’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic, saying it is “unpersuaded” that the adsorption of coronavirus particles constitutes physical loss or damage under both the policy language and Connecticut law.
July 15, 2024
California High Court Dismisses Tribe’s Appeal In Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court dismissed an Indian tribe insured’s appeal of a state appellate court’s finding that the insured and its experts failed to present sufficient evidence to demonstrate that the coronavirus caused property damage to the tribe’s casino and resort.
July 12, 2024
Question Of Fact Exists On Coverage For Hail Damage; Bad Faith Claim Fails

SAN ANTONIO — A Texas federal judge denied an insurer’s motion for summary judgment on a breach of contract claim after determining that a question of fact exists as to whether hail damage on the roof of an insured building occurred during the applicable policy period; however, the judge granted the insurer’s motion on the claim for bad faith after determining that the bad faith claim could not survive as there is a legitimate dispute over coverage for the insured’s claim.
July 12, 2024
Panel Affirms No Coverage Ruling In Television Producer’s Coronavirus Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 11 affirmed a lower federal court’s grant of an insurer’s motion for judgment on the pleadings in a television series producer insured’s breach of contract lawsuit seeking coverage for its losses incurred from coronavirus-related disruptions and delays in the production of its show, rejecting the insured’s contention that the lower court should have permitted it to present extrinsic evidence before it granted the insurer’s motion.
July 12, 2024
Clothing Boutique, Insurer Withdraw 2nd Circuit Appeal In Coronavirus Coverage Suit

NEW YORK — An insurer and its clothing boutique owner insured stipulated that the insured’s appeal in its breach of contract and declaratory judgment lawsuit seeking business interruption and property damage coverage for its losses arising from the COVID-19 pandemic and subsequent shutdown orders has been withdrawn with prejudice from the Second Circuit U.S. Court of Appeals.
July 11, 2024
5th Circuit Affirms Court’s Refusal To Allow Insured To Amend Hurricane Laura Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on July 10 affirmed a federal court’s ruling that denied an insured’s motion to amend her complaint in a breach of contract and bad faith coverage lawsuit arising from Hurricane Laura damage, finding that the insured did not ask for leave to file an amended complaint until after her claims were dismissed and “well after” her attorney was aware of the deficiencies in her complaint.
July 11, 2024
Bad Faith Claims Barred By Homeowners Policy’s Suit Limitation Provision

LAKE CHARLES, La. — Bad faith claims alleged against a homeowners insurer by insureds in a coverage dispute over property damages caused by Hurricanes Laura and Delta must be dismissed because the insureds failed to file their suit within two years as required by the policy’s suit limitation provision, a Louisiana federal judge said in granting the insurer’s motion to dismiss.
July 10, 2024
Mississippi Federal Judge Allows Experts’ Testimony In Insurance Coverage Dispute

NATCHEZ, Miss. — A federal judge in Mississippi denied an insurer’s motion to exclude two experts retained by a couple alleging that they were not adequately reimbursed for storm damage and refused to grant summary judgment after finding that material issues are in dispute.
July 09, 2024
Panel Tosses Appeal In Hurricane Michael Appraisal Dispute For Lack Of Jurisdiction

ATLANTA — The 11th Circuit U.S. Court of Appeals concluded that a Florida federal court failed to properly certify a partial final judgment order in favor of a church insured for immediate review pursuant to Federal Rule of Civil Procedure 54(b), dismissing the commercial property insurer’s appeal in a Hurricane Matthew coverage dispute for lack of jurisdiction.
July 08, 2024
Texas Panel Affirms No Coverage Ruling In Restaurants’ Suit Arising From Pandemic

DALLAS — A Texas appeals panel affirmed a lower court’s grant of a commercial property insurer’s motion for summary judgment in two restaurant group insureds’ lawsuit seeking coverage for their business interruption losses arising from the coronavirus pandemic, concluding that the insureds failed to present “more than a scintilla of evidence to create a genuine issue of material fact that COVID-19 caused ‘direct physical loss of or damage to’” to their restaurants.
July 08, 2024
2nd Circuit Panel Affirms Appraisal Award On Issue Of Insureds’ Mold Damages

NEW YORK — The Second Circuit U.S. Court of Appeals affirmed a district court’s dismissal of an insureds’ suit seeking additional coverage for mold damages caused by Superstorm Sandy because the insureds failed to provide any evidence that an appraisal award for their mold damages was the result of fraud, bias or bad faith.
June 28, 2024
Panel: Insurer Did Not Intend To Offer ‘Eighty Thousand Dollars’ In Hurricane Suit

NEW ORLEANS — A Louisiana appeals panel held that a builders risk insurer did not intend to offer $80,000 to settle a Hurricane Zeta coverage dispute and that the insurer and its insured did not have a meeting of the minds to compromise the dispute for that amount, reversing a lower court’s grant of the insured’s motion for judgment and remanding after the insurer argued that its original offer was a mistaken typographical error and its intent was to submit an $8,000 offer.
June 28, 2024
Majority Affirms Dismissal Of Suit Seeking $192M In Losses Arising From Coronavirus

NEW ORLEANS — A majority of a Fifth Circuit U.S. Court of Appeals panel on June 27 affirmed a lower federal court’s ruling in favor of a commercial property insurer in Texas’ largest nonprofit health system’s lawsuit seeking coverage for its $192 million in business interruption losses arising from the coronavirus, but the dissenting judge found that the case is distinct because the insured pleaded tangible alterations to its property.
June 27, 2024
5th Circuit Partly Reverses Judgment In Coverage Dispute Over Hurricane Laura

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on June 26 partly reversed a lower court’s ruling in favor of a church insured following a three-day bench trial in a Hurricane Laura coverage dispute, finding that because the judgment awards damages and penalties that are based on January 2023 prices and costs in violation of the commercial policy's terms, the award must be vacated and remanded for recalculation.