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Mealey's Insurance

July 24, 2024
Mass. High Court: ‘Surface Water’ Meaning Is Ambiguous As To Rainwater Accumulation

BOSTON — Answering a question from the First Circuit U.S. Court of Appeals, the Massachusetts Supreme Judicial Court concluded July 23 that rainwater that lands and accumulates on an insured hospital building’s second-floor outdoor rooftop courtyard or its parapet roof does not unambiguously constitute “surface waters” under Massachusetts law pursuant to the commercial insurance policy, resolving the ambiguity in favor of the insured in a water damage coverage dispute.
July 23, 2024
Pollution Exclusion Bars Coverage For Gasoline Leak, Panel Says In Reversing

FRANKFORT, Ky. — The Kentucky Court of Appeals reversed a trial court’s ruling entered against an insurer in a coverage dispute over damages caused by a gasoline leak because the policy’s pollution exclusion applies as a bar to coverage based on the conclusion that gasoline is a pollutant when it leaks from an underground storage tank and damages a neighboring property.
July 22, 2024
Contamination, Pollution Exclusion Bars Coverage For Coronavirus Losses

TOPEKA, Kan. — The Kansas Court of Appeals on July 19 affirmed a trial court’s ruling in favor of all-risk insurers that denied coverage for COVID-19 losses sustained by an insured because the policies’ contamination or pollution exclusion bars coverage for any contamination, seepage or pollution that endangers or threatens to endanger the health, safety or welfare of individuals.
July 22, 2024
Decades-Old MOU Is Focus Of Lawsuit Over Reinsurance Billings Dispute

LOS ANGELES — Suing two English reinsurers in a California court in a dispute over “millions” in reinsurance billings arising from asbestos bodily injury claims, an insurer alleges that an incorrect interpretation of a 1984 memorandum of understanding (MOU) is at the root of their refusal to pay.
July 19, 2024
Questions Of Fact Remain In Asbestos Bodily Injury Coverage Suit, Judge Says

ROME, Ga. — A Georgia federal judge denied an insured’s motion for judgment on the pleadings in a suit seeking a declaration that coverage is owed for an underlying asbestos bodily injury suit after determining that questions of fact exist regarding whether asbestos exclusions apply as a bar to coverage and whether the underlying plaintiff’s injuries were caused by asbestos in the insured’s talc products.
July 18, 2024
4th Circuit Denies Petition For Rehearing In Chemical Exposure Coverage Dispute

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied an insurer’s petition for rehearing and for rehearing en banc after determining that the insurer’s petition was not timely filed following the appeals panel’s ruling in the chemical exposure coverage suit.
July 17, 2024
Judge Allows Unfair Settlement Practices Claim To Proceed Against Insurer

CHARLESTON, W.Va. — A West Virginia federal judge denied a pollution liability insurer’s motion to dismiss a claim alleging violation of the West Virginia Unfair Claim Settlement Practices Act (UCSPA) because the insureds sufficiently stated facts in support of the claim and because it is not clear from the face of the insureds’ amended complaint that the UCSPA claim is time-barred under the applicable statute of limitations.
July 17, 2024
Fact Issues Remain On Whether Pollution Exclusion Applies To Coronavirus Losses

SANTA ANA, Calif. — A California federal judge denied an insurer’s motion for summary judgment on the issue of the applicability of a pollution and contamination exclusion after determining that questions of fact exist as to whether the exclusion bars coverage for business losses sustained by an insured in the wake of the COVID-19 pandemic; however, the judge granted the insurer’s motion on a bad faith claim after determining that the claim cannot survive because a legitimate coverage dispute exists.
July 16, 2024
Stay In Asbestos Liability Suit Lifted Following Arbitrator’s Ruling

WILMINGTON, Del. — A Delaware federal judge lifted a stay in an insured’s suit seeking coverage for more than $12 million in defense and indemnity costs for asbestos claims following an arbitrator’s ruling that the policies at issue are not subject to mandatory arbitration.
July 16, 2024
Texas High Court Requests Response From Insurer In Benzene Coverage Dispute

AUSTIN, Texas — The Texas Supreme Court requested that an insured file a response to an insurer’s petition for review of a Texas appellate court’s ruling that a policy’s arbitration provision applies only to disputes arising under the insurance policy and not to disputes arising under a settlement pertaining to benzene-related claims filed against the insured.
July 16, 2024
General Contractor Appeals No Coverage Ruling In Suit Over Faulty Stucco Claims

CHARLESTON, S.C. — A general contractor filed a notice in a South Carolina federal court indicating that it is seeking the Fourth Circuit U.S. Court of Appeals’ review of the court’s finding that an insurer owed no coverage for damages caused after stormwater seeped through faulty stucco because the damage is not the result of an “occurrence” under the terms of the policy.
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.