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Mealey's Insurance

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.
July 10, 2023
Insured Entitled To Only $5,000 For Water Damage Claim, 11th Circuit Panel Says

ATLANTA — The 11th Circuit U.S. Court of Appeals on July 7 affirmed a district court’s ruling in favor of a commercial liability insurer in a water damage coverage dispute after determining that the insured is entitled to only $5,000 in coverage pursuant to a policy’s sewer coverage extension as the remainder of the damages are excluded by the policy’s water exclusion.
July 10, 2023
Insurer Is Entitled To Equitable Contribution In Environmental Coverage Dispute

PORTLAND, Ore. — An Oregon federal judge granted an insurer’s supplemental motion for summary judgment on the issue of allocation of defense and indemnity costs and equitable contribution after determining that an interim cost-sharing agreement between two insurers in an environmental contamination coverage dispute prevents the insurer from being reimbursed for excess costs that the insurer paid on behalf of the mutual insured.
July 10, 2023
No Coverage Owed For Contamination Caused By Release Of Petroleum

JACKSONVILLE, Fla. — 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 because the insured failed to notify its insurer within seven days of learning of the presence of the contaminants in the groundwater as required by the policy, a Florida federal judge said in granting the insurer’s motion for summary judgment.
July 07, 2023
N.J. High Court Refuses To Review Ruling In Environmental Contamination Suit

TRENTON, N.J. — The New Jersey Supreme Court denied an insured’s petition for certification, refusing to review the New Jersey Superior Court Appellate Division’s ruling that a prior or pending litigation exclusion bars coverage for an environmental contamination lawsuit filed against the insured by the New Jersey Department of Environmental Protection (NJDEP).
June 30, 2023
Panel Reverses Ruling As To Collapse Claim, Affirms As To Hurricane Irma Claim

WEST PALM BEACH, Fla. — A Florida appeals panel held that insureds failed to satisfy their burden of showing hidden and unknown decay or insect damage to cause their ceiling collapse but met their burden of proof to support a jury’s verdict in their favor on their Hurricane Irma claim, reversing in part and affirming in part the insureds’ lawsuit against their homeowners insurer.
June 30, 2023
Insurer Says 3rd Circuit Properly Found Faulty Workmanship Is Not Occurrence

PHILADELPHIA — Rehearing of the Third Circuit U.S. Court of Appeals’ ruling in favor of an insurer in a dispute over coverage for damages to natural gas wells caused by the insured’s fracking work is not warranted because the panel correctly found that neither faulty workmanship nor failure to perform a contract in a workmanlike manner can be construed as an occurrence under the policy at issue, an insurer says in response to the insured’s petition for panel rehearing and rehearing en banc.
June 30, 2023
District Court Decision In Mold Coverage Suit Must Be Reversed, Insureds Say

ATLANTA — A district court’s ruling that no coverage is owed for mold damage discovered in an insured hotel should be reversed 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, the insureds say in an appellant reply brief filed in the 11th Circuit U.S. Court of Appeals.
June 30, 2023
Insurer Says No Coverage Owed For Bodily Injury Suit Caused By Rodent Droppings

RALEIGH, N.C. — A commercial general liability insurer asserts in a complaint filed in North Carolina federal court that it has no duty to defend or indemnify its insured for an underlying suit claiming that the insured’s failure to inspect its storage pod for rodent droppings resulted in the underlying plaintiff becoming infected with bacterial meningitis because its policies’ exclusions for communicable disease, fungi and bacteria and mold apply as a bar to coverage.
June 30, 2023
Insurer Owes Duty To Defend Against Legionnaires’ Disease Suit, Panel Says

ATLANTA — A district court correctly determined that an insurer has a duty to defend its insured against an underlying negligence suit arising out of exposure to legionella bacteria because the policies’ fungi and bacteria exclusions do not bar coverage, the 11th Circuit U.S. Court of Appeals said in agreeing with the district court’s finding that the exposure did not occur within a building or structure as required by the exclusions.
June 29, 2023
California Federal Judge Says Stay Of Water Damage Coverage Suit Not Warranted

RIVERSIDE, Calif. — A California federal judge denied a motion to stay filed by insureds in a water damage coverage suit alleging claims for breach of contract and bad faith after determining that the insureds failed to show that their insurer’s notice of removal to federal court was fraudulent.