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Mealey's Insurance

October 02, 2023
Judge: Issues Of Fact Exist On Insurer’s Coverage Denial In Water Damage Dispute

OKLAHOMA CITY — An insured’s claim for bad faith against its commercial property insurer can proceed because issues of material fact exist as to whether the insurer’s denial of coverage for some roof damage and interior water damage was reasonable, an Oklahoma federal judge said in denying the insurer’s motion for summary judgment.
September 29, 2023
Rhode Island Federal Judge Says Bifurcation Of Bad Faith Claims Is Appropriate

PROVIDENCE, R.I. — A Rhode Island federal judge granted a homeowners insurer’s motion to bifurcate bad faith claims from a breach of contract claim alleged against the insurer by an insured seeking coverage for water damages after determining that the case will benefit if the bad faith claims are bifurcated.
September 26, 2023
Trial Court’s Breach Of Contract Finding In Water, Mold Damage Suit Was Error

SPOKANE, Wash. — The Division III Washington Court of Appeals reversed a trial court’s ruling on a breach of contract claim brought against a homeowners insurer in a mold and water damage coverage suit after determining that the breach of contract claim cannot survive because the insured failed to show that she sustained any damages as a result of the alleged breach.
September 26, 2023
Trial Court Erred In Granting Judgment For Insurer In Water Damage Suit

WAUKESHA, Wis. — The Second District Wisconsin Court of Appeals determined that a trial court erred in granting a homeowners insurer’s motion for judgment on the pleadings in a water damage coverage dispute because the insureds’ complaint does not allege that the water damage was caused by subsurface water, an excluded cause of loss, but by a sewer or drain backup, a covered cause of loss under the policy.
September 25, 2023
Illinois Panel Affirms Ruling In Insurers’ Favor In Coronavirus Coverage Suit

CHICAGO — An Illinois panel on Sept. 22 affirmed a lower court’s grant of commercial property insurers’ motion to dismiss an insured’s lawsuit seeking coverage for its business income losses and extra expenses arising from the coronavirus, finding that no coverage was triggered because the insured failed to demonstrate that it incurred damage of a physical nature.
September 25, 2023
Questions Of Fact Exist Regarding When Insureds Knew Of Water Leak Problems

SANTA ANA, Calif. — A California federal judge denied a property insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that questions of fact exist regarding when the insureds became aware of a water leak problem within a hotel they purchased and whether the insurer acted reasonably in handling the insureds’ claim for coverage.
September 25, 2023
Default Judgments Against Insurer In Contamination Suit Must Be Reinstated

SEATTLE — A trial court erred in reversing default judgments entered for homeowners who sought damages from their homeowners insurer for the contamination of their home with methamphetamine residue because the homeowners insurer was properly served under Washington law, the Division I Washington Court of Appeals said.
September 20, 2023
Illinois Panel Reverses Judgment For Engineer, Finds Insurer Entitled To Subrogation

CHICAGO — An Illinois appellate panel on Sept. 19 reversed a lower court’s grant of summary judgment to an engineering firm in a builders risk insurer’s suit seeking subrogation damages for the flooding of a building under construction, finding that the lower court erred in finding that the insurer did not meet the prerequisites for equitable subrogation because the insurer’s right to subrogate stemmed from the insurance contract.
September 19, 2023
Trial Court Properly Found Insurer Owes Duty To Defend Against Environmental Claims

SALEM, Ore. — A trial court properly determined that an insurer has a duty to defend its insured for environmental contamination cleanup cost claims made by the U.S. Environmental Protection Agency because the policy does not limit the insurer’s duty to defend to claims for covered damages, the Oregon Court of Appeals said.
September 19, 2023
Insurer Says Pollution, Lead Exclusions Bar Coverage For Lead Exposure Suit Claims

BUTTE, Mont. — No coverage is owed to an insured for an underlying third-party complaint alleging that the insured’s negligence in installing a water well contributed to injuries sustained by tenants who consumed the well water because the policies’ exclusions for pollution and lead bar coverage, an insurer says in a complaint filed in Montana federal court.
September 19, 2023
No Coverage For Underlying Environmental Contamination Suits, Illinois Panel Says

CHICAGO — The First District Illinois Appellate Court affirmed a trial court’s ruling in favor of four insurers after determining that no coverage is afforded for underlying environmental contamination lawsuits filed against an insured because the violation of statutory environmental regulations does not constitute an occurrence under the applicable policies.
September 18, 2023
Nevada High Court Vacates Ruling Against Insurer In Coronavirus Coverage Suit

CARSON CITY, Nev. — Granting a commercial property insurer’s petition for writ of mandamus in a coverage dispute arising from the forced closure of a shopping mall in response to the coronavirus pandemic, the Nevada Supreme Court directed the lower court to vacate its order denying the insurer’s motion for summary judgment on the insured’s breach of contract and declaratory relief claims after finding that the insured’s evidence failed to create a genuine dispute of material fact regarding the existence of “direct physical loss or damage” to trigger coverage and that the policy’s pollution and contamination exclusion further barred coverage.
September 18, 2023
Justice Denies Protective Order, Disqualification Bid In Reinsurance Row

NEW YORK — Addressing two motions relating to an audit agreement, a New York justice denied both a liquidator’s request for a protective order regarding certain previously produced documents and reinsurers’ bid to disqualify the liquidator’s counsel.
September 15, 2023
Insurer Seeks Dismissal Of Tyco’s AFFF Claims Under Brillhart-Wilton Doctrine

CHARLESTON, S.C. — An insurance company has filed a brief in South Carolina federal court arguing that it should dismiss an amended complaint by Tyco Fire Products LP that seeks insurance coverage for claims arising from injuries associated with the firefighting agent aqueous film forming foam (AFFF), arguing that the court should abstain from deciding coverage issues pursuant to the Brillhart-Wilton doctrine.
September 14, 2023
Asbestos Firms Appeal Denial Of Standing To Oppose Bankruptcy Settlement

NEW ORLEANS — Two asbestos law firms have appealed a Louisiana federal bankruptcy judge’s finding that they lack standing to oppose a $3.5 million settlement between the Chapter 7 trustee for a bankrupt insulation supplier and two asbestos insurers; it is the second insurance settlement appeal the firms have filed in the case.
September 13, 2023
Judge: Insurance-Home Sale Connection Claims Save AI Claims Handling Case

CHICAGO — The theory that homeowners insurance constitutes a service connected to the sale of a home pushes the Fair Housing Act (FHA) to its boundaries but meshes with precedent, a federal judge in Illinois said in partially denying a motion to dismiss in a case alleging that an insurer’s artificial intelligence disproportionately flags claims by Black policyholders for greater scrutiny.
September 12, 2023
Insured Says Coverage Owed For Contribution To Lead Paint Abatement Fund

COLUMBUS, Ohio — The Ohio Supreme Court should affirm a state appellate court’s ruling that an insured’s obligation to contribute to a lead paint abatement fund constitutes damages under applicable insurance policies because the ordinary meaning of the word damages includes the insured’s obligation to contribute to the abatement fund, the insured says in it appellee brief filed in the Ohio Supreme Court.
September 12, 2023
Questions On Meaning Of Occurrence, Pollutants Certified To Hawaii High Court

HONOLULU — A Hawaii federal judge certified two questions to the Hawaii Supreme Court, seeking the state high court’s guidance regarding the meaning of the terms “occurrence” and “pollution” as used in insurance policies in a suit filed by a petroleum company seeking coverage for underlying lawsuits alleging that the petroleum company is responsible for contributing to the effects of global warming based on its alleged failure to warn of the hazards of using fossil fuel products.
September 07, 2023
COMMENTARY: Should Insureds Reimburse Insurers For Defense Costs When No Coverage Is Found?

By Robert M. Hall
September 11, 2023
9th Circuit Certifies Pollution Exclusion Question To Alaska Supreme Court

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals certified a question to the Alaska Supreme Court, asking the state high court to answer the question of whether a pollution exclusion in a homeowners insurance policy bars coverage for the carbon monoxide death of a 17-year-old.
September 08, 2023
1 Of Insurer’s 4 Suits Seeking Asbestos Settlement Reimbursement Is Dismissed

OMAHA, Neb. — One suit that National Indemnity Co. (NICO) filed against reinsurers in Nebraska federal court over the insurer’s $157.2 million settlement with Montana regarding alleged asbestos exposures has been dismissed with prejudice because no defendants remain after a wave of stipulations.
September 08, 2023
Kaiser Gypsum, Asbestos Claimant Reps Say Insurer’s Cert Bid Should Be Denied

WASHINGTON, D.C. — There is no divide among the federal circuit courts when deciding who is a party in interest with standing to object to a bankruptcy plan, so review of the Fourth Circuit U.S. Court of Appeals’ ruling that the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. lacks standing to challenge the debtors’ reorganization plan is not needed, the debtors tell the U.S. Supreme Court in an opposition brief that was filed at the request of the court.
September 07, 2023
Stay Of Judgment Denied After Insurer Appeals Judgment In Property Damage Dispute

MOBILE, Ala. — A federal judge in Alabama has denied an insurer’s motion for stay of execution without bond of a judgment issued 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 pending its appeal to the 11th Circuit U.S. Court of Appeals.
September 01, 2023
Homeowners Insurer Failed To Show Negligent Installation Cause Of Water Damage

PHILADELPHIA — A Pennsylvania federal judge denied a homeowners insurer’s motion for summary judgment in a dispute over water damage in an insured’s home because the insurer failed to show that the parties who installed and serviced a water supply line were negligent in their work and caused the failure of the water supply line.
September 01, 2023
Contractor’s Insurer Appeals Denial Of New Trial In Coverage Suit To 5th Circuit

NEW ORLEANS — A contractor’s commercial general liability insurer has appealed to the Fifth Circuit U.S. Court of Appeals a ruling by federal judge in Louisiana denying its motion for a new trial or reconsideration of his April ruling dismissing its suit against a subcontractor’s insurer to recover damages the contractor’s insurer paid stemming from water damage caused by the subcontractor’s negligence in performing work on a home’s roof.