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Mealey's Insurance

August 28, 2023
Pollution Liability Insurer Says Bad Faith Suit Must Be Heard In Federal Court

SEATTLE — An insured’s complaint alleging claims for breach of contract and bad faith arising out of a commercial general liability and pollution liability insurer’s denial of coverage for underlying bodily injury suits stemming from exposure to chemicals distributed by the insured must be removed to Washington federal court because diversity of citizenship exists and the amount in controversy exceeds the federal jurisdictional minimum of $75,000, the insurer says in a notice of removal.
August 25, 2023
Washington Panel Affirms Ruling For Insurer In Shower Leak Coverage Suit

SEATTLE — A homeowners insurer provided sufficient evidence that rot damage from a leaking shower was caused by construction defects and, therefore, not covered, a Washington appellate panel found in affirming a trial court’s summary judgment ruling and findings of fact and conclusions of law following a bench trial.
August 25, 2023
Reinsurer Wins Permission To Seal 2 Agreements In Cleanup Costs Coverage Row

PADUCAH, Ky. — A Kentucky federal magistrate judge on Aug. 24 granted a motion to seal a third-party administrative services agreement (ASA) and a reinsurance agreement, saying the entities involved have a compelling interest that “outweighs the public’s interest in accessing” the documents and that redaction would be “impractical.”
August 24, 2023
No Coverage For Underlying Chlorinated Solvents Exposure Suit, Indiana Panel Affirms

INDIANAPOLIS — The Indiana Court of Appeals affirmed a trial court’s ruling that no coverage exists for an underlying bodily injury suit arising out of the exposure to chlorinated solvents at an insured’s Taiwan factories because Taiwan is not part of the coverage territory covered under the policies at issue.
August 22, 2023
Judge Partly Dismisses Insurer’s Coverage Suit Against Medical Product Manufacturer

CONCORD, N.H. —A federal judge in New Hampshire granted a medical product manufacturer insured’s motion to dismiss the portion of commercial general liability insurer’s declaratory judgment lawsuit pertaining to 10 underlying class action lawsuits alleging that the insured manufactured and marketed continuous positive airway pressure (CPAP) and bi-level positive airway pressure devices that were not safe, healthy or effective, finding that the insurer’s coverage claim as to these underlying suits is untimely.
August 22, 2023
8th Circuit Affirms No Coverage Ruling In Kansas City Restaurants’ COVID-19 Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Aug. 21 affirmed a Missouri federal court’s judgment in favor of a commercial property insurer in a breach of contract lawsuit brought by the owner of several Kansas City restaurants and bars that were forced to close or reduce their operations as a result of the COVID-19 pandemic, finding that even if the insured discovered the coronavirus at its insured properties, it failed to meet the standard for physicality.
August 22, 2023
Mold Exclusion Bars Coverage For Negligence Suit Filed Against Plumber, Judge Says

TAMPA, Fla. — An insurer has no duty to defend its insured in an underlying suit alleging that the insured’s negligence in performing plumbing services caused a water leak that resulted in mold growth in the underlying plaintiff’s home because a mold exclusion in the insurer’s policies clearly bars coverage for the underlying suit, a Florida federal judge said.
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.