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Legal News & Headlines

Excess Insurers Must Bear Cost Of Insurer's Insolvency, Missouri Federal Judge Says
SPRINGFIELD, Mo. - A Missouri federal judge on Jan. 31 denied a motion for summary judgment filed by two excess insurers in an asbestos coverage dispute after determining that the excess insurers must bear the cost of an underlying insurer's insolvency because the excess policies at issue do not explicitly exclude the "drop down" of coverage (O'Reilly Auto Enterprises LLC v. United States Fire Insurance Co., et al., No. 17-3007, W.D. Mo., 2020 U.S. Dist. LEXIS 18422).

Judge Orders Arbitration Of Reinsurance Case Over Asbestos Loss Billings
NEW YORK - A New York federal judge on Feb. 7 ordered a reinsurer to arbitrate its dispute regarding asbestos loss billings with an insurer and a reinsurer based on an arbitration clause but stayed the dispute against another insurer pending arbitration (TIG Insurance Co. v. American Home Assurance Co., et al., No. 18-10183, S.D. N.Y., 2020 U.S. Dist. LEXIS 22639).

Law-Of-Case Doctrine Bars Denial Of Lift-Stay Motion, Insurer Argues
TACOMA, Wash. - A Washington federal bankruptcy judge committed reversible error in denying an insurer's bid to vacate a stay order barring its contribution claims against other insurers for asbestos claims against Chapter 11 debtor Fraser's Boiler Service Inc., the insurer argues in a Jan. 31 reply brief on appeal in federal court (National Union Fire Insurance Company of Pittsburgh, PA v. Fraser's Boiler Service, Inc., et al., No. 3:19-cv-5648, W.D. Wash.).

Parties Request Stay Against English Reinsurer Based On Bankruptcy Court Order
BOSTON - A reinsurer and an English reinsurer ask a Massachusetts federal court in a Jan. 28 motion for a stay of counterclaims against the English reinsurer concerning allocation and billing of environmental claims because a bankruptcy court order was issued against the English reinsurer (Certain London Market Company Reinsurers v. Lamorak Insurance Co., No. 18-10534, D. Mass.).

Panel Should Reconsider Ruling That Pollution Exclusion Bars Coverage, Insured Says
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals should reconsider its finding that an insured quarry operator's unplanned discharge of rock pellets into a nearby stream is excluded from coverage pursuant to the policy's pollution exclusion because the appeals panel misapplied the meaning of contaminants in determining that the pollution exclusion applies, the insured contends in a Jan. 31 petition for panel rehearing (Eastern Concrete Materials Inc. v. ACE American Insurance Co., et al., No. 18-11043, 5th Cir.).

Insured Failed To File Water Damage Coverage Suit Within Suit Limitation Provision
LAS VEGAS - A Nevada federal judge on Feb. 7 granted a homeowners insurer's motion for judgment on the pleadings in a water damage coverage suit after determining that the insured failed to file suit within the policy's two-year limitation provision; however, after determining that amendment may not be futile, the judge said the insured is permitted to file an amended complaint (Riki Roash v. Automobile Insurance Company of Hartford, Connecticut, No. 19-035, D. Nev., 2020 U.S. Dist. LEXIS 21992).

Breach Of Contract, Bad Faith Claims Against Homeowners Insurer Should Be Dismissed
BROOKLYN, N.Y. - A New York federal magistrate judge on Jan. 30 recommended that an insured homeowners' breach of contract and bad faith complaint be dismissed because the insured failed to file suit within the policy's two-year limitations provision (Shahzad Nawaz v. State Farm Fire & Casualty Co., No. 19-1727, E.D. N.Y., 2020 U.S. Dist. LEXIS 16361).

Federal Judge Says New York Is Not Proper Venue For Pollution Liability Suit
NEW YORK - A New York federal judge on Jan. 27 dismissed a pollution liability insurer's complaint against the U.S. government and the National Pollution Funds Center after determining that venue in New York federal court is not proper based on a venue provision included in the applicable Oil Pollution Act (OPA) (Water Quality Insurance Syndicate v. National Pollution Funds Center, et al., No. 19-6344, S.D. N.Y., 2020 U.S. Dist. LEXIS 13333).

Pollution Liability Insurer Was Entitled To Rescind Policy, Appeals Panel Says
LOS ANGELES - The Second District California Court of Appeal on Jan. 31 affirmed a trial court's ruling that an insurer was entitled to rescind a pollution liability policy issued to an insured seeking coverage for contamination of oil in a storage tank caused by an insured's work because the insured made misrepresentations in its insurance application (Endurance American Specialty Insurance Co. v. Bennington Group LLC, et al., No. B285909, Calif. App., 2nd Dist., Div. 5, 2020 Cal. App. Unpub. LEXIS 726).

No Coverage Owed For Underlying Asbestos Exposure Claim Filed Against Insured
MOUNT VERNON, Ill. - The Fifth District Illinois Appellate Court on Jan. 27 affirmed a trial court's ruling that an employers liability insurer has no duty to defend an insured against an underlying asbestos bodily injury claim because the underlying asbestos exposure claim qualifies as a "bodily injury by disease" and is subject to the policy's 36-month suit limitation provision (Apex Oil Co. Inc. v. Arrowood Indemnity Co., No. 5-18-0396, Ill. App., 5th Dist., 2020 Ill. App. Unpub. LEXIS 107).

Judge Denies Reconsideration Bid For Stay Of Kaiser Gypsum Coverage Row
CHARLOTTE, N.C. - A North Carolina federal judge on Jan. 17 declined to reconsider his decision to stay a declaratory judgment dispute between Chapter 11 debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. and their main asbestos insurer pending resolution of the debtors' plans to reorganize (Truck Insurance Exchange v. Kaiser Gypsum Company, Inc., et al., No. 3:19-cv-467, W.D. N.C.).

8th Circuit: Insurer Owes Defense For Damages From Complex's Roof Leak
ST. LOUIS - An insurer has a duty to defend alleged damages from a luxury apartment complex's leaky roof because the claims fall within the policy's scope and there are no applicable exclusions, an Eighth Circuit U.S. Court of Appeals panel affirmed Jan. 30 (Westfield Insurance Co. v. Miller Architects & Builders, Inc., No. 18-2970, 8th Cir., 2020 U.S. App. LEXIS 2972).

Consultant Was Not Fraudulently Joined To Defeat Jurisdiction In Water Damage Suit
LOS ANGELES - A California federal judge on Jan. 27 remanded a suit filed by insured homeowners seeking coverage for water damages after determining that complete diversity jurisdiction does not exist because the insureds did not fraudulently join a consultant hired by the insurer as a defendant to defeat diversity jurisdiction (Ramin Javaherian, et al. v. AMCO Insurance Co., et al., No. 19-10317, C.D. Calif., 2020 U.S. Dist. LEXIS 14793).

Judge Refuses To Reconsider Dismissal Of Defective Foundation Coverage Suit
NEW HAVEN, Conn. - A Connecticut federal judge on Jan. 30 denied a motion to alter a judgment dismissing a breach of contract and bad faith suit filed against a homeowners insurer because recent developments in Connecticut law regarding coverage under collapse provisions for the deterioration of the foundation walls as a result of the use of defective concrete do not support a finding that coverage is owed to the insureds (Marianne Gilmore, et al. v. Teachers Insurance Co., No. 18-1856, D. Conn., 2020 U.S. Dist. LEXIS 14548).

Extrinsic Facts In Collapse Suit Placed Insurer On Notice Of Possible Defense Duty
NATCHEZ, Miss. - A Mississippi federal judge on Jan. 30 determined than an insurer is not entitled to summary judgment on the issue of its duty to defend an insured for an underlying lawsuit arising out of the collapse of an insured building because there was sufficient extrinsic evidence available to the insurer that provided the insurer with notice that it may have a duty to defend the underlying lawsuit (Hudson Specialty Insurance Co. v. Talex Enterprises LLC, et al., S.D. Miss., 17-137, 2020 U.S. Dist. LEXIS 15412).

Pollution Exclusion Bars Coverage For Stream Contaminated With Rock Pellets
NEW ORLEANS - A district court correctly concluded that an insured quarry operator's unplanned discharge of rock pellets into a nearby stream is excluded from coverage pursuant to the policy's pollution exclusion because the rock pellets are contaminants, the Fifth Circuit U.S. Court of Appeals said Jan. 17 (Eastern Concrete Materials Inc. v. ACE American Insurance Co., et al., No. 18-11043, 5th Cir., 2020 U.S. App. LEXIS 1680).

Insurer Failed To Prove Asbestos Exposure Predated Inception Of Policy, Judge Says
SPRINGFIELD, Mo. - A Missouri federal judge on Jan. 27 granted an insured's motion for summary judgment after determining that an exclusion for progressive bodily injury claims does not apply as a bar to coverage for underlying asbestos personal injury claims filed against an insured because the insurer failed to prove that the exposure occurred prior to the inception of the applicable policy period (O'Reilly Auto Enterprises LLC v. United States Fire Insurance Co., et al., No. 17-3007, W.D. Mo., 2020 U.S. Dist. LEXIS 12805).

Lead Paint Injury Coverage Suits Stayed Pending Maryland Court Of Appeals' Decision
BALTIMORE - A Maryland federal judge on Jan. 24 granted a motion to stay a number of lead paint injury coverage suits to allow the Maryland Court of Appeals to address the issue of the proper allocation method under Maryland law (CX Reinsurance Company Ltd., f/k/a CNA Reinsurance Co. Ltd. v. Devon S. Johnson, No. 18-2355, D. Md., 2020 U.S. Dist. LEXIS 12043).

Judge Denies Motion To Dismiss, Says Exception To Bacteria Exclusion May Apply
CENTRAL ISLIP, N.Y. - A New York federal judge on Jan. 22 denied an insurer's motion to dismiss another insurer's claim seeking coverage, on behalf of its insured, for underlying personal injury suits arising out of the exposure to Legionella bacteria because it is not clear whether an exception to a fungi or bacteria exclusion applies to provide coverage for the underlying suits (Philadelphia Indemnity Insurance Co. v. Indian Harbor Insurance Co., No. 18-5014, E.D. N.Y., 2020 U.S. Dist. LEXIS 10651).

Insurer: No Coverage For Charity Foundation's Poorly Constructed Homes
NEW ORLEANS - An insurer sued Make it Right Foundation (MIRF) and the charity foundation's officers on Jan. 24 in a Louisiana federal court, alleging that it has no duty to defend or indemnify underlying claims of poor workmanship in homes built after Hurricane Katrina (TIG Insurance Co. v. Make It Right Foundation, et al., No. 20-00262, E.D. La.).

New York Federal Judge Dismisses Suit Seeking Additional Coverage For Water Damage
BROOKLYN, N.Y. - Breach of contract and bad faith claims alleged against a homeowners insurer following a dispute over coverage for water damages must be dismissed because the insureds failed to file suit within two years of the loss as required by the policy's limitations provision, a New York federal judge said Jan. 22 (Mildred Guy, et al. v. The Automobile Insurance Company of Hartford Connecticut, et al., No. 18-2620, E.D. N.Y., 2020 U.S. Dist. LEXIS 10701).

Insurer: No Coverage For Construction Defects Case; Insurers Owe Contribution
MIAMI - A commercial general liability insurer in a Jan. 22 complaint seeks a declaration from a Florida federal court that there is no duty to defend or indemnify a construction defect action filed against its insured, a declaration that two other insurers owe coverage and contribution from those two insurers for any indemnity payments made on the insured's behalf (Gemini Insurance Co. v. Delant Construction Co., et al., No. 20-20280, S.D. Fla.).

No Coverage Owed For Environmental Contamination Claims, Panel Says
SHREVEPORT, La. - No coverage is afforded for environmental contamination claims because the contamination claims were not reported within 60 days following the end of the applicable policy as required by the policy, the Second Circuit Louisiana Court of Appeal said Jan. 14 (Kansas City Southern Railway Co. et al., v. The Wood Energy Group Inc. et al., Nos. 53,096, 53,099, La. App., 2nd Cir., 2020 La. App. LEXIS 61).

No Defense, Indemnification Owed For Damages Caused By Dumping Of Concrete
NEW YORK - A commercial auto insurer has no duty to defend or indemnify a third-party defendant in an underlying suit alleging damages caused by water contamination and flooding as a result of the illegal dumping of concrete slurry because the underlying damages occurred before the insurer's effective policy period, a New York justice said Jan. 9 (American States Insurance Co., et al. v. Graphic Arts Mutual Insurance Co., et al., No. 651372/2018, N.Y. Sup., New York Co., 2020 N.Y. Misc. LEXIS 127).

Insurer Responsible Only For Pro Rata Portion Of Judgment In Lead Coverage Dispute
BALTIMORE - The Maryland Court of Special Appeals on Jan. 8 determined that an insurer is obligated to indemnify its insured only for bodily injuries caused by the exposure to lead paint that occurred during the insurer's policy period and further said that the insurer is not obligated to provide coverage for exposure to lead while an unborn child was in utero because there is no evidence as to when any injuries occurred while the child was in utero (Pennsylvania National Mutual Casualty Insurance Co. v. Tajah Jeffers, et al., No. 960, Md. Spec. App., 2020 Md. App. LEXIS 26).

Breach Of Contract, Vexatious Refusal To Pay Claims Can Proceed In Asbestos Dispute
SPRINGFIELD, Mo. - A Missouri federal judge on Jan. 14 denied an insurer's motion for summary judgment on breach of contract and vexatious refusal to pay claims arising out of an asbestos coverage dispute after determining that the insured presented sufficient evidence that the insurer breached its contract when it ceased defending the insured based on the insurer's incorrect belief that the primary policies' limits were exhausted (O'Reilly Auto Enterprises LLC v. United States Fire Insurance Co. et al., No. 17-3007, W.D. Mo., 2020 U.S. Dist. LEXIS 5910).

Bankruptcy Court Maps Plan To Resolve Final Issues In Debtor, Insurer Row
NEW YORK - A New York federal bankruptcy judge issued a scheduling order Jan. 16 for resolution of the remaining issues in a long-running dispute between Chapter 11 debtor Rapid-American Corp. and insurers over coverage for asbestos liability while the parties await his ruling on their last round of summary judgment briefing (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).

Settling Insurers Say Stay Against Contribution Claims Should Remain In Place
TACOMA, Wash. - A Washington federal bankruptcy court's denial of an insurer's bid to vacate a stay order barring its contribution claims against other insurers for asbestos claims against Chapter 11 debtor Fraser's Boiler Service Inc. is only an interlocutory ruling and is therefore not appealable, the other insurers, who have settled with the debtor, say in a Jan. 10 appellee brief in federal court (National Union Fire Insurance Company of Pittsburgh, PA v. Fraser's Boiler Service, Inc., et al., No. 3:19-cv-5648, W.D. Wash.).

No Coverage For Water Damage Caused By Overflowing Toilet, New York Justice Says
NEW YORK - A New York County Supreme Court justice on Jan. 7 granted summary judgment to a property insurer after determining that the policy excludes coverage for water damage caused by an overflowing toilet in one of the insured's condominium units (193 Hooper Street Condo v. Wesco Insurance Co., No. 657266/2017, N.Y. Sup., New York Co.).

Insurer: No Coverage For Defective HVAC System In Student Housing Complex
BIRMINGHAM, Ala. - An insurer alleges in a Jan. 10 complaint filed in an Alabama federal court that coverage does not exist for an additional insured for claims arising out of allegedly defective heating, ventilation and air conditioning (HVAC) installation work in a student housing complex because there is no "occurrence" and the work is otherwise excluded (Pennsylvania National Mutual Casualty Insurance Co. v. 3D Air Services, LLC, et al., No. 20-43, N.D. Ala.).

 
 
The above is not legal advice. That can only come from a qualified attorney who is familiar
with all the facts and circumstances of a particular, specific case and the relevant law.