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Mealey's Insurance

July 16, 2024
Stay Lifted After 7th Circuit Denies Insurers’ Petition In Environmental Suit

EAST ST. LOUIS, Ill. — Following the Seventh Circuit U.S. Court of Appeals’ denial of a petition for permission to file an interlocutory appeal in an environmental contamination coverage suit, an Illinois federal judge lifted a stay of the suit that was entered while the insurers’ petition for permission to file an interlocutory appeal was pending.
July 15, 2024
Trial Court Failed To Consider Prior Duty-To-Defend Ruling, Indiana Panel Says

INDIANAPOLIS — A trial court erred in finding that an insurer had no duty to defend its insured after it was dismissed as a defendant from an underlying chemical exposure bodily injury suit filed in Taiwan because the trial court failed to consider a prior ruling on the duty to defend one of the insured’s related entities entered in the first lawsuit filed by the insured, the Indiana Court of Appeals said in reversing and remanding the trial court’s judgment.
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 09, 2024
Silica Coverage Suit Stayed By Minnesota Judge Based On Similar Suit In California

MINNEAPOLIS — A Minnesota federal judge stayed an insurer’s suit seeking a coverage declaration for underlying bodily injury suits filed against its insured and arising out of silica dust exposure to allow a California federal court to determine whether a similar and nearly identical suit filed by the insured in California federal court should proceed in California rather than Minnesota.
July 09, 2024
Panel Affirms District Court’s Bad Faith Ruling, Judgment In Water Damage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeal affirmed a district court’s $125,000 judgment in favor of an insured in a water damage dispute after determining that the lower court did not abuse its discretion in denying the insured’s request for appraisal or in entering partial summary judgment on the insured’s bad faith claim because there is no evidence that the parties agreed to arbitrate the dispute and no evidence that the insurer acted in bad faith in handling the insured’s claim.
July 09, 2024
Judge: Insureds Failed To Show Their Damage Was Not Caused By Defect, Deterioration

LOS ANGELES — A federal judge in California held that damages to insureds’ property “were caused by a defect, weakness, inadequacy, fault, or unsoundness in design, repair, construction, or materials — which in turn caused wear, tear, . . . deterioration, and wet or dry rot” and that, as a result, their loss is excluded from coverage under their homeowners insurance policy.
July 09, 2024
No Coverage Owed For Underlying Contamination Lawsuit, Insurer Says

HOUSTON — No coverage is owed to an insured for an underlying lawsuit alleging that the insured’s gas and oil operations caused ground and water contamination because the insured did not provide notice of the lawsuit until eight years after the lawsuit was filed and after the insured agreed to settle the underlying suit, an insurer says in its complaint filed in Texas federal court.
July 08, 2024
Insureds Say 9th Circuit Should Affirm Coverage Opinion In Pollution Suit

SAN FRANCISCO — A district court correctly found that an insurer owes coverage for an underlying environmental contamination lawsuit because the insureds met their burden of proving that the underlying lawsuit alleges a potential for coverage under the policies at issue, the insureds maintain in an appellee brief filed in the Ninth Circuit U.S. Court of Appeals.
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 26, 2024
COMMENTARY: Compliance With Ambiguous Notice Requirements: A Familiar Rule “Or” An Outlier?

By Syed S. Ahmad and Yosef Y. Itkin
July 01, 2024
No Coverage Owed For Oil Contamination Suit, Texas Federal Judge Says

HOUSTON — An insurer has no duty to defend or indemnify a successor company of an insured because any assignment of rights of the insurance policies to the successor company was not valid pursuant to the policies’ anti-assignment provision, a Texas federal judge said in finding that no coverage is owed to the successor company for an underlying suit seeking damages from the successor company for oil contamination and remediation costs.
July 01, 2024
Oregon High Court Denies Primary Insurer’s Petition In Contribution Coverage Suit

SALEM, Ore. — The Oregon Supreme Court denied a primary insurer’s petition seeking review of the Oregon Court of Appeals’ reversal of a trial court’s ruling in favor of the primary insurer in a contribution coverage dispute between primary and excess insurers over the environmental contamination clean-up costs incurred by the insureds.
June 28, 2024
Panel Reverses Lower Court’s Ruling In Favor Of Insurer In Chemical Exposure Suit

RICHMOND, Va. — A district court erred in finding that policies issued to an insured in Hawaii apply only to the insured’s operations in Hawaii because the policies’ language regarding the covered locations is ambiguous, the Fourth Circuit U.S. Court of Appeals said June 27 in reversing a district court’s ruling on the insurer’s duty to defend the insured against an underlying chemical exposure suit.
June 28, 2024
Zamboni Toxic Exposure Coverage Suit Will Stay In New Jersey, Panel Says

TRENTON, N.J. — A New Jersey trial court did not err in finding that New Jersey, rather than Pennsylvania, should retain jurisdiction over an insured’s lawsuit seeking coverage for an underlying personal injury lawsuit alleging that Zamboni machines used to clean the ice rink at the Philadelphia Flyers practice facility in New Jersey exposed two athletic trainers to carcinogens because New Jersey has a strong public policy interest in the underlying suit as it involves the safety of a New Jersey workplace, a New Jersey appellate panel said June 27 in affirming the trial court’s rulings.
June 28, 2024
Citing Spizzirri, Insurer Asks 7th Circuit To Dismiss Appeal In Arbitration Estoppel Row

CHICAGO — Arguing that Smith v. Spizzirri renders deficient “the basis for this Court’s appellate jurisdiction,” an insurer filed a June 27 motion in the Seventh Circuit U.S. Court of Appeals to dismiss reinsurers’ fully briefed appeal concerning the effects of prior arbitration involving asbestos-related liabilities.
June 26, 2024
D.C. Circuit Reverses Ruling In Insurers’ Favor In Dispute Over Condensation Damage

WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals reversed a lower court’s grant of summary judgment in favor of builders risk insurers in a real estate developer and contractor’s lawsuit seeking coverage for remediation of condensation damage, finding that the policies provide coverage because the ensuing-loss clause applies to losses from water damage that was caused by the excluded perils of dampness and temperature changes.
June 26, 2024
2 Stipulated Dismissals Granted In Insurer’s Suit Over Asbestos Liabilities Row

OMAHA, Neb. — Two defendants referred to as reinsurers in a suit National Indemnity Co. (NICO) filed over a $157.2 million settlement it reached with Montana regarding alleged asbestos exposures have been dismissed with prejudice under a joint stipulation that a Nebraska federal judge granted June 24.
June 26, 2024
Special Discovery Master Does In Camera Review In Indemnification Case

TRENTON, N.J. — Following in camera review in New Jersey federal court in a dispute between insurers and reinsurers over indemnification for asbestos bodily injury claims, a special discovery master directed insurers to produce all or part of roughly two-thirds of the sample documents he considered.
June 25, 2024
Policy Exclusions Do Not Bar Coverage For Decomposing Body, Ohio Judge Says

CANTON, Ohio — An Ohio judge found that coverage is owed for damages to a rental property caused by a decomposing human body because the policies’ pollution exclusion, virus exclusion and infestation exclusion do not clearly bar coverage for the insureds’ property damage claim.
June 24, 2024
District Court’s Collapse Ruling Must Be Reversed, Contractor Tells 6th Circuit

CINCINNATI — A federal judge erred in finding that no coverage is owed for a structurally unsound wall that remained standing after a portion of the wall collapsed during a building renovation because the lower court failed to apply Tennessee law in construing the meaning of the term collapse in the insurer’s policy, a building contractor says in its June 21 appellant brief filed in the Sixth Circuit U.S. Court of Appeals.
June 24, 2024
Water Exclusion Bars Coverage For Water Damages In Insureds’ Basement, Panel Says

NEW ORLEANS — A federal district court properly entered summary judgment in favor of a homeowners insurer on breach of contract and bad faith claims because coverage for water damages to the insureds’ basement is excluded pursuant to a water exclusion in the homeowners’ policy, the Fifth Circuit U.S. Court of Appeals said.
June 20, 2024
6th Circuit Appeal Filed Over Reinsurer’s Collateral Estoppel Win In Defense Row

CINCINNATI — A defense costs dispute concerning asbestos lawsuits and prior arbitration is going to the Sixth Circuit U.S. Court of Appeals, with an insurer filing a notice of appeal regarding a Michigan federal judge’s ruling that collateral estoppel applies.
June 19, 2024
California High Court Reverses, Says Vertical Exhaustion Applies To Policies

SAN FRANCISCO — The California Supreme Court reversed an appeals court’s ruling in a long-running asbestos insurance coverage dispute after determining that a vertical exhaustion method, rather than a horizontal exhaustion method, must be applied to excess policies that sit over an insured’s primary policies because the language of the excess policies and the insured’s reasonable expectations support a vertical exhaustion method.
June 19, 2024
Illinois Panel Says No Coverage Owed For Carbon Monoxide Suits Filed Against Insured

SPRINGFIELD, Ill. — No coverage is owed for underlying personal injury lawsuits stemming from a carbon monoxide leak because the underlying allegations involve the insured’s rendering of professional services, the Fourth District Illinois Appellate Court said June 18 in finding that the policies’ professional services exclusion bars coverage.
June 18, 2024
Insurer Says No Coverage Owed For Suit Stemming From Insured’s Fertilizer Plant

TYLER, Texas — An insurer filed suit in Texas federal court against its insured, seeking a declaration that it has no duty to defend or indemnify its insured for an underlying suit arising out of the insured’s operation of a fertilizer plant because the insured failed to timely notify the insurer of the suit and because the policies’ pollution exclusion bars coverage.