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Mealey's Insurance

April 10, 2024
Reconsideration Bid Denied, Default Judgment Granted In Reimbursement Dispute

OMAHA, Neb. — Deciding against a Brazil-based reinsurer on two motions in a March 9 amended ruling, a Nebraska federal judge entered judgment for plaintiff National Indemnity Co. (NICO) on all claims in a suit over reimbursement for a settlement reached with Montana regarding alleged asbestos exposure.
April 08, 2024
Primary, Excess Insurer Says Pollution Exclusion Bars Coverage For Silica Lawsuits

MINNEAPOLIS — No coverage is owed to an insured manufacturer of quartz surface slabs for underlying bodily injury lawsuits arising out of exposure to silica dust while working with the quartz slabs because coverage is barred by the pollution exclusion, a primary and excess insurer says in a complaint filed in Minnesota federal court.
April 09, 2024
Insureds Say Remand In Pollution Dispute Is Necessary, Appeal Is Premature

SAN FRANCISCO — Insureds involved in an environmental contamination coverage suit urge the Ninth Circuit U.S. Court of Appeals to remand its suit to the district court, contending that the insurer’s notice of appeal was premature because the district court did not rule on the insureds’ motion to alter or amend the judgment entered in favor of the insureds on the applicability of the pollution exclusion.
April 04, 2024
Insurer Says District Court Properly Found Coverage Is Barred For Cleanup Costs

ATLANTA — A district court’s ruling that no coverage is owed to an insured for contamination cleanup costs caused by the release of petroleum and other contaminants from an underground storage tank at a gas station must be affirmed because the district court correctly found that the claim for contamination cleanup costs incepted prior to the issuance of the policy and is, therefore, barred from coverage, the insurer says in its appellee brief filed in the 11th Circuit Court of Appeal.
April 04, 2024
Coverage Owed For Mold Damages, Insureds Reiterate In Corrected Reply Brief

ATLANTA — In a corrected reply brief, filed with the permission of the 11th Circuit U.S. Court of Appeals, insureds reiterate their argument that a district court erred in finding that no coverage is owed for mold damage discovered in an insured hotel because the policy at issue provides coverage for losses caused by a construction defect even if the cost to fix the defect is not covered.
April 03, 2024
Connecticut Panel Affirms Ruling In Insurer’s Favor In Tribe’s Coronavirus Suit

HARTFORD, Conn. — A Connecticut appeals court on April 2 affirmed a lower court’s judgment in favor of an insurer in an Indian tribe’s declaratory judgment lawsuit arising from the COVID-19 pandemic, rejecting the tribe’s contention that the lower court improperly determined that the policy’s contamination exclusion applied to bar the majority of its coverage.
April 02, 2024
Reinsurer Wins Collateral Estoppel Ruling In Defense Costs Dispute With Insurer

DETROIT — Saying that collateral estoppel applies because the “issue was actually litigated and decided during” the plaintiff insurer’s arbitration with a different entity, a Michigan federal judge ruled for a reinsurer in a defense costs dispute concerning asbestos lawsuits.
April 01, 2024
Illinois Law Applies In Environmental Contamination Coverage Dispute, Judge Says

EAST ST. LOUIS, Ill. — Illinois law must be applied in an environmental contamination coverage dispute because Illinois has a more “substantial interest” in the resolution of the coverage dispute arising out of the insureds’ obligations for remediation costs related to a Superfund site located in Illinois than does the commonwealth of Massachusetts, the location where some of the policies were issued, an Illinois federal judge said March 29 in granting the insureds’ motion to apply Illinois law and in denying the insurers’ motion to apply Massachusetts law.
March 29, 2024
Insureds Cannot Mention Cost Of Mold Damage Or Mold Repairs During Trial

PHILADELPHIA — Insureds who allege that their homeowners insurer breached its contract and acted in bad faith by refusing to pay for all damages caused by a tornado and rain during Hurricane Ida are precluded from mentioning the cost and scope of mold damages and repairs to their home during trial because the mold damages are clearly excluded under the homeowners policy, a Pennsylvania federal judge said.
March 28, 2024
Communicable Disease Exclusion Does Not Apply To Legionnaires’ Disease Lawsuits

NEW YORK — A commercial lines insurer’s communicable disease exclusion does not bar coverage for three underlying lawsuits alleging that residents of the insured properties contracted Legionnaires’ disease following exposure to Legionella bacteria at the properties because Legionnaires’ disease is not a communicable disease, a New York federal judge said in granting the insured’s motion for summary judgment.
March 27, 2024
Radioactive Materials Exclusion Applies; Breach Of Contract, Bad Faith Claims Fail

MILWAUKEE — Breach of contract and bad faith claims against two commercial general liability insurers fail because the policies’ radioactive materials exclusion bars coverage for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers, a Wisconsin federal judge said in granting the insurers’ motion for summary judgment.
March 26, 2024
4th Circuit Says No Rehearing In Asbestos Coverage Row With Guaranty Association

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied an insurer’s request for rehearing and rehearing en banc of the court’s ruling dismissing the insurer’s appeal of a district court’s order remanding to state court a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.
March 26, 2024
Insurers Win Summary Judgment On Bad Faith Claim In Case Over Settlement

CINCINNATI — Ruling that Marginian v. Allstate Ins. Co. “plainly bars” the sole remaining bad faith claim under Ohio law “[a]nd no amount of discovery could change that,” an Ohio federal judge granted summary judgment for defendant insurers in litigation over the settlement of a third-party personal injury lawsuit.
March 26, 2024
Expert Report Is Relevant To Issue Of Whether Raw Sewage Is Pollutant

NEW YORK — A New York state justice denied a motion to preclude a primary insurer’s expert report after determining that the testimony is relevant in the dispute over equitable contribution for an underlying water contamination suit because the report addresses the issue of whether raw sewage in drinking water is a pollutant or contaminant.
March 25, 2024
Indiana Federal Judge Awards Insured Prejudgment Interest In Cleanup Suit

SOUTH BEND, Ind. — An Indiana federal judge on March 22 denied insurers’ post-trial motions, upheld a jury’s verdict of $112 million in favor of the insured and awarded the insured approximately $3 million in prejudgment interest in a breach of contract and bad faith suit stemming from the insured’s request for coverage costs related to the cleanup of polychlorinated biphenyls (PCBs).
March 25, 2024
Insurer Says Lower Court Erred In Placing Burden On Insurer In Pollution Dispute

SAN FRANCISCO — A district court erred in placing the burden on an insurer to prove that a pollution exclusion barred coverage for underlying environmental contamination lawsuits because the burden should have been placed on the insureds to prove that the exclusion did not apply as a bar to coverage, an insurer argues in its March 22 appellant brief filed in the Ninth Circuit U.S. Court of Appeals.
March 21, 2024
Earth Movement Exclusion Bars Coverage For Foundation Settling, Federal Judge Says

DENVER — Breach of contract and bad faith claims alleged against a homeowners insurer cannot survive because the policy’s earth movement exclusion clearly bars coverage for damages caused by settling in the foundation of the home, a Colorado federal judge said March 20 in granting the insurer’s motion for summary judgment.
March 21, 2024
AFFF Maker Seeks Ruling That Pollution Exclusions Do Not Bar Liability Claims

CHARLESTON, S.C. — A company that makes the firefighting agent known as aqueous film-forming foam (AFFF) has moved in South Carolina federal court for partial summary judgment against a group of insurers asking the court to find that the product liability and common-law causes of action alleging bodily injury and/or property damage that have been asserted against the company in the multidistrict litigation are not excluded from coverage by pollution exclusions.
March 21, 2024
Insurer Failed To Show Faulty Work, Fungi Exclusions Bar Coverage For Assembly Work

AUGUSTA, Ga. — Summary judgment in favor of a commercial general liability insurer is not warranted because the insurer failed to show that its policy exclusions for faulty work and for fungi or bacteria apply to bar coverage for an underlying negligence suit stemming from the insureds’ assembly of a manufactured home that sustained water and mold damages following the delivery and assembly of the home, a Georgia federal judge ruled.
March 20, 2024
Standing To Object To Chapter 11 Plan Argued In Supreme Court

WASHINGTON, D.C. — The question of who has standing to object to a Chapter 11 plan of reorganization was debated March 19 in the U.S. Supreme Court, with some justices questioning why asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. are opposed to having their main liability insurer speak out against their bankruptcy plan.
March 19, 2024
Pollution Exclusion Clearly Bars Coverage For Wastewater Discharge, Panel Says

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 18 affirmed a district court’s ruling that a pollution exclusion in a directors and officers liability policy bars coverage for underlying lawsuits alleging that the insureds illegally discharged wastewater into city sewage treatment facilities because the exclusion is not ambiguous and clearly bars coverage for the wastewater.
March 19, 2024
3rd Circuit Affirms Ruling For Homeowners Insurer In Water Damage Coverage Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a district court’s ruling in favor of a homeowners insurer on breach of contract and bad faith claims in a water damage coverage dispute, agreeing with the insurer that the policy’s one-year suit limitation provision bars the breach of contract claim and that there is no evidence that the insurer’s denial of coverage was unreasonable.
March 19, 2024
Certification Of Pollution Exclusion Question Will Be Considered As Part Of Appeal

BISMARCK, N.D. — The Eighth Circuit U.S. Court of Appeals will consider certifying a question to the North Dakota Supreme Court on whether a pollution exclusion bars coverage for an underlying carbon monoxide exposure suit filed against insureds as part of its consideration of the insureds’ appeal on the merits of a district judge’s ruling in favor of the insurer on the pollution exclusion, according to an order issued by the court.
March 15, 2024
Washington High Court: Policy Exception Revives Coverage For Condo’s Roof Collapse

OLYMPIA, Wash. — The Washington Supreme Court on March 14 found that an appeals court correctly reversed a lower court’s grant of summary judgment in an all-risk insurer’s favor in a coverage dispute stemming from condensation damage to a condominium’s roof, finding that a resulting loss exception in the insurance policy revives coverage, even if it would otherwise be precluded by a faulty workmanship exclusion.
March 15, 2024
Arbitration Provision Does Not Apply To Parties’ Settlement Agreement, Texas Panel Says

DALLAS — A trial court did not err in denying an insurer’s motion to compel arbitration of a dispute over the terms of a 2015 settlement because the dispute over the satisfaction of a self-insured retention limit for benzene-related claims filed against the insured involves the interpretation of the settlement agreement and not the interpretation of the insurance policy at issue, the Fifth District Texas Court of Appeals said in affirming the trial court’s ruling that the arbitration provision applies only to disputes arising under the insurance policy and not under the settlement agreement.