Mealey's Catastrophic Loss : Mealey's : Legal News & Analysis

Mealey's Catastrophic Loss

December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
December 08, 2023
Home Inspector Can Testify In Dispute Over Insurance Payout, Repairs

TULSA, Okla. — A federal magistrate judge in Oklahoma on Dec. 7 denied an insured couple’s motion to exclude expert testimony by a property inspector who was hired by the insurer to review work done on a home damaged by a storm after the couple filed a breach of contract suit against the insurer.
December 05, 2023
Insurer Seeks Reimbursement From Government For Losses Caused By Contaminated Water

HONOLULU — In a complaint filed in Hawaii federal court, an insurer claims that the U.S. government must reimburse it for more than $500,000 paid to its insured for business losses after a fuel spill at a jet fuel storage facility operated by the U.S, Navy contaminated local drinking water and forced the insured to close its fast food restaurants for approximately four months.
December 04, 2023
Judge Allows Insurers To Amend To Add Fraud Defense For Pre-Hurricane Damage

NEW YORK — A New York federal judge on Dec. 1 issued an order granting a motion to amend an answer in a breach of contract suit filed against a commercial property insurer and an insurance syndicate over their failure to cover a condominium’s hurricane-related losses, finding that the proposed fraud defenses were sufficiently pleaded after discovery revealed that the alleged hurricane-related damage purportedly occurred before the hurricane.
December 04, 2023
Insureds’ Motion To Remand Breach Of Contract, Bad Faith Suit Denied

BATON ROUGE, La. — A Louisiana federal judge adopted a report recommending the denial of a motion to remand a hurricane damage coverage suit filed by insureds against a homeowners insurer, agreeing with the magistrate judge’s finding that complete diversity of citizenship exists because the insureds’ claims against a non-diverse, Louisiana insurance agent fail.
November 28, 2023
No Coverage Owed For Clothing Retailer’s COVID-19 Losses, N.C. Panel Affirms

RALEIGH, N.C. — The North Carolina Court of Appeals affirmed a lower court’s dismissal of an insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the insured failed to allege a tangible alteration to its more than 1,300 clothing stores to trigger coverage.
November 28, 2023
No Coverage Owed For COVID-19 Losses Under Pollution Policy, Court Says

NEW YORK — No coverage is owed for business interruption losses caused by the coronavirus because the virus is not a pollution condition and does not constitute an indoor environmental condition as defined in the pollution and remediation policy, a New York appellate panel said in affirming a trial court’s ruling.
November 28, 2023
Additional Work Not Barred By Policy’s Mold Sublimit Provision, Judge Says

PHILADELPHIA — A claim for additional coverage for mold remediation work required by a local building code is not subject to a policy’s mold sublimit provision because the policy’s ordinance or law provision provides coverage for the additional work that was required by the enforcement of a local building code, a Pennsylvania federal judge said in partially granting the insureds’ motion for summary judgment.
November 28, 2023
Expert On Hail Damage Admissible, But Federal Judge Orders 2nd Deposition

DALLAS — A forensic engineer retained in an insurance coverage dispute can testify, a federal judge in Texas ruled, rejecting a motion filed by the insurer to exclude his testimony, but the judge ordered that the expert be made available for a second deposition at the insured’s expense.
November 27, 2023
Judge Grants Substitution Motion In Hurricane Coverage Row With Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted a motion to substitute the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a property owner’s breach of contract and bad faith suit against its now-insolvent insurer that purportedly failed to cover alleged losses from Hurricane Ida, finding that substituting LIGA as a defendant is permitted in an action seeking to resolve covered claims.
November 20, 2023
Judge Issues Opinion Reaffirming Order In Landlord’s Coronavirus Coverage Suit

NEW YORK — A federal judge in New York issued an opinion reaffirming its Sept. 29 order granting a commercial property insurer’s motion for summary judgment in a coronavirus coverage suit, finding that a commercial landlord insured failed to meet the contractual prerequisites to recover under the insurance policy’s two communicable disease provisions.
November 16, 2023
Insurer Says Dismissal Of Claims In Hurricane Damage Suit Must Be Affirmed

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals should affirm a district court’s dismissal of claims alleging breach of contract, bad faith and violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) against a homeowners insurer because the district court properly found that the insured’s amended complaint did not allege sufficient facts in support of the insureds’ claims, the insurer contends in its appellee brief.
November 16, 2023
Bad Faith, Unfair Practices Claims In Hurricane Coverage Suit Are Time-Barred

NEW BERN, N.C. — An insured’s claims for bad faith and for violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) arising out of claims for property damages caused by Hurricanes Matthew and Florence cannot proceed because the claims are barred by the applicable statute of limitations, a North Carolina federal judge said in partially granting a commercial property insurer’s motion for judgment on the pleadings.
November 16, 2023
Judge Grants Request To Amend Complaint To Add Guaranty Association, Issues Remand

NEW ORLEANS — One day after a Louisiana federal judge granted a homeowner’s motion to add the Louisiana Insurance Guaranty Association (LIGA) to his hurricane coverage suit against his now-insolvent insurer, the homeowner added LIGA as a defendant in his amended complaint.
November 16, 2023
Judge Allows Insured To Add Guaranty Association, Says No ‘Dilatory Purpose’

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to amend his complaint and add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a hurricane coverage suit against his now-insolvent insurer, finding in part that though LIGA is a nondiverse party, the homeowner had no “dilatory purpose” in amending the complaint.
November 16, 2023
Policy’s Virus Exclusion Bars Coverage For Coronavirus Losses, 9th Circuit Affirms

PHOENIX — The Ninth Circuit U.S. Court of Appeals on Nov. 15 held that an insured failed to plausibly allege that anything other than the COVID-19 pandemic is the efficient proximate cause of its losses, affirming a federal court’s dismissal of the insured’s commercial insurance coverage lawsuit.
November 16, 2023
Insurer Granted Summary Judgment On Breach Of Contract, Bad Faith Claims

DALLAS — A Texas federal judge granted a homeowners insurer’s motion for summary judgment on an insured’s breach of contract claim and extracontractual claims but stayed a ruling on the motion as it pertained to the insured’s claim for violation of the Texas Prompt Payment of Claims Act (TPPCA) to allow the Texas Supreme Court to answer a certified question posed by the Fifth Circuit U.S. Court of Appeals regarding recovery under the TPPCA.
November 15, 2023
Judge Denies Dismissal In Hurricane Coverage Suit, Says Substitution Has No Impact

LAKE CHARLES, La. — A Louisiana federal judge denied dismissal of a homeowners’ bad faith suit against their now-insolvent homeowners insurer for purportedly failing to adequately compensate them for damages caused by Hurricane Laura, finding that substituting the Louisiana Insurance Guaranty Association (LIGA) does not impact the court’s subject matter jurisdiction.
November 14, 2023
5th Circuit: Court Erred In Failing To Address Expert Testimony As To Roof Damage

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Nov. 13 held that a lower federal court erred when it did not address the insured’s expert testimony that his roof suffered functional damage and, therefore, there is a question of fact as to whether the insured’s damage was cosmetic or functional, reversing, vacating and remanding the lower court’s judgment in favor of a homeowners insurer in a coverage dispute stemming from the insurer’s denial of coverage for wind and hail damage.
November 14, 2023
Judge Tosses Hurricane Ida Suit Against Insurer, Cites No Basis For Jurisdiction

NEW ORLEANS — A Louisiana federal judge dismissed a breach of contract suit filed by a homeowner against his now-insolvent insurer for failure to adequately compensate the homeowner for purported damage from Hurricane Ida, finding that the court no longer has subject matter jurisdiction after the homeowner named the Louisiana Insurance Guaranty Association (LIGA) as a defendant.
November 13, 2023
Insured Files Supplemental Authority On Applicability Of Pollution Exclusion

SAN FRANCISCO — A few days before oral arguments were held in the Ninth Circuit U.S. Court of Appeals in a dispute over the applicability of the pollution exclusion, the insured, seeking coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris, filed a notice of supplemental authority, urging the Ninth Circuit to consider a ruling by the Second District California Court of Appeal in support of its argument that the pollution exclusion does not bar coverage for the underlying suit.
November 13, 2023
Insurer Again Seeks Rehearing In Appraisal Dispute Over Hurricane Irma Damage

ATLANTA — An insurer on Nov. 10 filed a second petition for rehearing en banc challenging the 11th Circuit U.S. Court of Appeals’ ruling that a lower federal court’s order compelling appraisal and staying a Hurricane Irma coverage dispute pending the appraisal is an interlocutory order that is not immediately appealable under Title 28 U.S. Code Section 1292(a)(1), 28 U.S.C. § 1292(a)(1), or under the Federal Arbitration Act (FAA).
November 13, 2023
Reserve Information In COVID-19 Coverage Suit Not Relevant To Bad Faith Claim

SANTA ANA, Calif. — A California federal magistrate judge denied an insured’s motion to compel documents related to the reserve set by an insurer in response to the insured’s claim for business losses sustained in the wake of the COVID-19 pandemic after determining that the reserve information is not relevant to the insured’s bad faith claim because only a nominal reserve was set by the insurer and no changes were made to the reserve since the coverage claim was filed.
November 10, 2023
11th Circuit Denies As Moot Insurer’s Petition For Panel Rehearing In Irma Dispute

ATLANTA — On its own motion, the 11th Circuit U.S. Court of Appeals vacated an opinion, entered a new opinion and denied as moot an insurer’s petition for panel rehearing in an appraisal dispute over Hurricane Irma damage.
November 08, 2023
Judge Modifies Class In Driver’s Suit Against GEICO For Unfair COVID Premiums

SAN FRANCISCO — A California federal judge on Nov. 7 granted an insured’s motion to modify a previously certified class of automotive policy holders in the insured’s suit claiming that GEICO violated California’s unfair competition law (UCL) by profiting from a premium giveback program initiated during the COVID-19 pandemic, with the judge agreeing based on evidence produced to change the class time period.