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Mealey's Insurance

May 30, 2023
Policy Clearly Excludes Damages Caused By Surface Water, Federal Judge Says

DETROIT — No coverage is afforded for water damage in an insured home because the homeowners policy at issue clearly excludes coverage for damages caused by surface water, a Michigan federal judge said in granting the insurer’s motion for summary judgment and dismissing the suit against the insurer.
May 25, 2023
Counterclaims Against Excess Insurer In Explosion Coverage Suit Must Be Dismissed

TRENTON, N.J. — An insured’s counterclaims for breach of contract and bad faith alleged against its excess insurer, which relied on its policy’s total pollution exclusion to deny coverage for underlying suits arising out of an explosion set off by the use of the insured’s magnesium powder, must be dismissed for failure to allege sufficient facts in support of the claims, a New Jersey federal judge said in granting the insurer’s motion to dismiss.
May 24, 2023
No Coverage Owed For Home’s Foundation Collapse, New Jersey Panel Affirms

TRENTON, N.J. — A trial court did not err in determining that an insured’s claim for the collapse of his home’s foundation is not covered because experts hired by both the homeowners insurer and the insured determined that the collapse was caused by water seepage and earth movement, both of which are excluded causes of loss under the policy, the New Jersey Superior Court Appellate Division said May 23.
May 24, 2023
Insurer Seeks JMOL Or New Trial After $170,000 Verdict In Water Damage Suit

MOBILE, Ala. — In the wake of a nearly $170,000 verdict against it in an insurance dispute over the handling of a property damage claim after Hurricane Sally, an insurer has filed a renewed motion for judgment as a matter of law or a new trial, arguing that an insured church failed to establish that its claimed losses were covered under the policy, that the insured’s expert testimony was not reliable and that the “jury instructions were incomplete.”
May 23, 2023
No Coverage Owed For Discharges Into City Sewer System, Panel Says

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 22 affirmed a district court’s ruling that a pollution liability insurer owes no coverage to an insured for an underlying lawsuit alleging that the insured illegally discharged wastewater into a city sewage treatment facility because the underlying suit does not allege an occurrence for which coverage exists.
May 23, 2023
2nd Circuit Upholds Ruling Against English Reinsurer In All-Sums Allocation Row

NEW YORK — In a May 22 ruling that represents its best guess as to what the United Kingdom Supreme Court would do, a Second Circuit U.S. Court of Appeals panel upheld a decision against an English facultative reinsurer over all-sums allocation of an environmental claims settlement.
May 22, 2023
Homeowners Appeal Ruling That Contractor’s Insurer Owes No Coverage For Mold Injuries

PHILADELPHIA — Homeowners and a contractor are appealing to the Third Circuit U.S. Court of Appeals a federal judge in Pennsylvania’s determination that the contractor’s insurer owes them no coverage for personal injuries one of the homeowners sustained as a result of a mold infestation caused by the contractor’s negligent workmanship.
May 22, 2023
Panel Affirms Dismissal Of Consolidated Class Actions Seeking Coronavirus Coverage

SEATTLE — In three rulings, the Ninth Circuit U.S. Court of Appeals on May 19 affirmed a Washington federal judge’s ruling that granted insurers’ motion to dismiss consolidated class actions brought by western Washington businesses seeking coverage for lost income stemming from the coronavirus pandemic, agreeing that COVID-19 does not cause the physical loss or damage to the insureds’ property that is required to trigger coverage.
May 22, 2023
Insured Says Policy Limit Applies For Each Year Of Policy For Environmental Claims

DETROIT — An insured counters in a response to an umbrella liability insurer’s motion for summary judgment filed in Michigan federal court that the plain language of a three-year policy provides that the policy’s $5 million limit applies separately to each of the policy’s three years for underlying environmental contamination suits filed against the insured and does not only provide one $5 million policy limit for all three years.
May 22, 2023
Motion To Amend Complaint In Toxic Emissions Suit Denied; Bad Faith Claims Not Ripe

MIAMI — A Florida federal judge denied an insured’s motion for leave to amend its complaint to add claims for statutory and common-law bad faith against its insurer in a coverage dispute arising out of toxic emissions created by the insured’s practice of sugarcane burning after determining that the bad faith claims are not yet ripe as the court has not resolved the issue of damages.
May 19, 2023
Excess Insurer’s Policies Provide Only Duty To Indemnify, Not Defend, Judge Says

RIVERSIDE, Calif. — An excess insurer’s policies only require the insurer to indemnify its insured for covered claims and does not require the insurer to defend against claims, a California federal judge said in partly granting the excess insurer’s motion for summary judgment in a groundwater contamination coverage suit.
May 18, 2023
Insurer Says No Coverage Due For Costs Incurred As A Result Of Oil Pipeline Rupture

DALLAS — An insured is not entitled to coverage for cleanup and remediation costs incurred as a result of a crude oil pipeline rupture because the excess policy at issue contains a pollution endorsement that bars coverage for the costs incurred by the insured, a second-layer excess liability insurer maintains in a complaint filed in Texas federal court.
May 18, 2023
Insurer Says District Court Erred In Finding Bacteria Exclusion Is Ambiguous

RICHMOND, Va. — A district court erred in finding that a primary insurer owes a duty to defend its insured against an underlying suit arising out of exposure to Legionella bacteria at an insured hotel because the phrase “good or product intended for bodily consumption” as used in the policy’s bacteria exclusion is not ambiguous, the primary insurer contends in its appellant brief filed in the Fourth Circuit U.S. Court of Appeals.
May 18, 2023
5th Circuit Panel Denies Panel Rehearing In Mold Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals denied a petition for panel rehearing filed by insureds and refused to reconsider its finding that a mold exclusion in a homeowners policy bars coverage for the insureds’ mold damages.
May 16, 2023
Insurer Does Not Oppose 1 Of 3 Stay Requests In Asbestos Liabilities Row

OMAHA, Neb. — After three defendants cited Pennsylvania liquidation proceedings in asking a Nebraska federal court for stays in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures, NICO says in a May 15 filing that it does not oppose a stay against one of the defendants.
May 16, 2023
Umbrella Insurer Says 1 Policy Limit Applies For Environmental Claims

DETROIT — An umbrella liability insurer filed a motion for partial summary in Michigan federal court, contending that its three-year policy includes only one $5 million policy limit for all three years and not three separate $5 million limits if it is found to owe coverage for underlying environmental contamination suits filed against the insured.
May 15, 2023
Federal Magistrate Judge Denies Motion For Entry Of Default In Water, Mold Suit

HARRISBURG, Pa. — A Pennsylvania federal magistrate judge denied a homeowners insurer’s motion for entry of default in a suit seeking a coverage declaration for water and mold damages and, instead, granted the insureds’ motion for an extension of time to file an answer to the insurer’s declaratory judgment complaint.
May 15, 2023
No Coverage Owed For Asbestos Bodily Injury Suit Based On Untimely Notice

NEWARK, N.J. — An insured seeking coverage for an underlying asbestos bodily injury suit is not entitled to coverage under primary and excess policies because the insured breached the policies’ notice provisions by failing to notify its insurers of the underlying lawsuit until after a jury verdict was entered, a New Jersey federal judge said in granted the insurers’ motion for summary judgment.
May 11, 2023
Ohio High Court To Consider Damages Issue In Lead Paint Abatement Suit

COLUMBUS, Ohio — The Ohio Supreme Court accepted review of state appellate court’s ruling that an insured’s obligation to contribute to a lead paint abatement fund constitutes damages under the applicable insurance policies.
May 11, 2023
Parties Dispute Coverage Issues In Groundwater Contamination Suit

RIVERSIDE, Calif. — In reply briefs filed in support of competing motions for summary judgment in a groundwater contamination coverage suit, an insured and its excess insurer seek a ruling from a California federal court on whether judgment should be entered on the insured’s breach of contract claim arising out of the insurer’s termination of coverage based on the insurer’s position that coverage is owed for only one occurrence under the applicable policies.
May 09, 2023
Citing Liquidation Order, Reinsurer Seeks Stay Of Claims In Liabilities Row

OMAHA, Neb. — Arguing that two abstention doctrines apply because of Pennsylvania liquidation proceedings, a reinsurer moved in Nebraska federal court to stay claims against it in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures.
May 09, 2023
Kaiser Insurer Petitions For Review Of 4th Circuit’s Ruling On Lack Of Standing

WASHINGTON, D.C. — The Fourth Circuit U.S. Court of Appeals erred in veering from the “plain text” of the U.S. Bankruptcy Code, which allows a “‘party in interest’” to “‘appear and be heard on any issue’” in a Chapter 11 case, the primary insurer for debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. tells the U.S. Supreme Court in a petition challenging the Fourth Circuit’s finding that it lacks standing to oppose the debtors’ confirmed plan of reorganization.
May 05, 2023
Insurer Says No Coverage Due For Tenant’s Suit Arising Out Of Legionnaire’s Disease

LOUISVILLE, Ky. — No coverage is afforded for an underlying bodily injury suit arising out of an apartment tenant’s contraction of Legionnaire’s disease while residing in an insured apartment building because the policy at issue excludes coverage for bodily injury claims related to the exposure to any fungi, wet rot, dry rot or bacteria, the insurer says in a complaint filed in Kentucky federal court.
May 05, 2023
Insureds Seek Panel Rehearing In Mold Damage Coverage Suit Before 5th Circuit

NEW ORLEANS — A panel rehearing of the Fifth Circuit U.S. Court of Appeals’ finding that a mold exclusion in a homeowners policy bars coverage is warranted because the mold damages are covered under the policy’s exception to the mold exclusion since water intrusion, which is a covered cause of loss under the policy, caused the mold growth in the insureds’ home, the insureds say in a petition for panel rehearing.
May 04, 2023
Church Seeks Costs After $170,000 Verdict In Water Damage Coverage Suit

MOBILE, Ala. — On the heels of a nearly $170,000 judgment entered in its favor in an insurance dispute over an insurer’s handling of a property damage claim after Hurricane Sally, a church is seeking an additional $7,998.74 in costs litigating the action, according to a bill of costs the church submitted in Alabama federal court.