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Legal News & Headlines

$120M Settlement Reached In Environmental Suit, According To Recent Filing
NEW YORK - An insured and one of its excess insurers on Aug. 30 notified a New York federal judge that they stipulated to a settlement regarding environmental contamination remediation costs in a suit that was filed by the insured more than 30 years ago (Olin Corp. v. Lamorak Insurance Co., et al., No. 84-1968, S.D. N.Y.).

Insurer Owed Duty To Defend Insured Against Environmental Claims
BOSTON - A Massachusetts federal judge on Sept. 13 adopted a magistrate judge's recommendation to grant a motion for summary judgment filed by the insured's assignee in an environmental contamination coverage dispute after determining that the magistrate judge's analysis regarding the policy's sudden and accidental exception to the pollution exclusion was correct (Plaistow Project LLC v. Ace Property & Casualty Insurance Co., No. 16-11385, D. Mass., 2018 U.S. Dist. LEXIS 155965).

Claimant Says 3rd Circuit Ruling On W.R. Grace Insurer Liability Affects Her Case
WILMINGTON, Del. - A recent Third Circuit U.S. Court of Appeals remand ruling seeking Delaware federal bankruptcy court decisions on what asbestos claims, if any, insurers of former Chapter 11 debtor W.R. Grace & Co. are liable for needs to be addressed in a similar action alleging negligence against the insurers, the plaintiff in that action tells the bankruptcy court in a Sept. 10 brief filed at the request of the court (In re: W.R. Grace & Co., et al., No. 01-01139, D. Del. Bkcy.).

Panel Affirms Verdict In Insurer's Favor In Water Damage Coverage Dispute
SAN DIEGO - The Fourth District California Court of Appeal on Sept. 17 affirmed a jury verdict entered in an insurer's favor in a water damage dispute after determining that the trial court did not abuse its discretion in excluding testimony from the insured's expert regarding whether the water damage occurred suddenly or over a period of time (Robert Dorfman v. State Farm General Insurance Co., No. D072214, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 6329).

Judge: Water Exclusion Bars Coverage For Insureds' Damages From Wall Collapse
SEATTLE - Coverage for damages caused by the collapse of a home's retaining wall are precluded under a homeowners insurance policy's water exclusion, a Washington federal judge ruled Sept. 7; however, the judge declined to grant summary judgment to the insurer on claims for bad faith and violation of Washington's Consumer Protection Act (CPA) (Stephen Jones, et al. v. State Farm Fire and Casualty Co., No. 17-1058, W.D. Wash., 2018 U.S. Dist. LEXIS 153102).

Coverage Barred For Water Damage; Loss Was Not Sudden And Accidental
DENVER - No coverage is owed for water damage discovered within an exterior insulation finishing system because the damage was not sudden and accidental as required for coverage to exist under the policy, a Colorado federal magistrate judge said Sept. 13 (Mark Mock, et al. v. Allstate Insurance Co., No. 17-2592, D. Colo., 2018 U.S. Dist. LEXIS 156256).

Insurer Can't File Cross-Claim Against Broker Of Contaminated Products Policy
SEATTLE - An insurer involved in a contaminated products coverage dispute cannot file a cross-claim against the broker that handled the sale of the policy because the insurer failed to demonstrate good cause for allowing the cross-claim to be filed after the court's deadline to submit amended pleadings, a Washington federal judge said Sept. 12 (National Frozen Foods Corp. v. Berkley Assurance Co., No. 17-339, W.D. Wash., 2018 U.S. Dist. LEXIS 155621).

Insurer Owes No Coverage For Faulty Laminate Suit, 7th Circuit Affirms
CHICAGO - The Seventh Circuit U.S. Court of Appeals on Sept. 10 affirmed a lower federal court's finding that an insurer has no duty to provide coverage for an underlying lawsuit alleging that its plastics company insured manufactured a faulty laminate (Berry Plastics Corp. v. Illinois National Insurance Co., No. 17-1815, 7th Cir., 2018 U.S. App. LEXIS 25576).

Indiana Federal Judge Excludes Portions Of Insured's Expert Testimony
FORT WAYNE, Ind. - An Indiana federal judge on Sept. 5 agreed with an insurer that a former insurance claims handler is not qualified to testify on environmental matters and said the insured's expert testimony should be limited to insurance claims procedures (Valley Forge Insurance Co. v. Hartford Iron & Metal Inc., et al., No. 14-6, N.D. Ind., 2018 U.S. Dist. LEXIS 150478).

Appeals By Bankrupt Boiler Company's Insurers Proceed Without U.S. Trustee
TACOMA, Wash. - The U.S. trustee's office for the Western District of Washington made clear in a Sept. 4 letter to the court that it is not participating in two appeals filed by nonsettling insurers in the Chapter 11 case of Fraser's Boiler Service Inc., saying it is not a proper appellee (In re: Fraser's Boiler Service, Inc., Nos. 3:18-cv-05637 and 3:18-cv-05638, W.D. Wash.).

Insurers Seek $4.46M For Reinsurer's Failure To Reimburse Asbestos Losses
NEW YORK - In a breach of contract case, insurers accuse their reinsurer in a June 20 complaint filed in a New York trial court of failing to reimburse them $4.46 million for billings related to asbestos losses (National Union Fire Insurance Company of Pittsburgh, PA, et al. v. St. Paul Fire and Marine Insurance Co., No. 653086/2018, N.Y. Sup., New York Co.).

Insurer Has Duty To Defend Insured In Underlying Mold, Water Damages Suit
FORT LAUDERDALE, Fla. - A Florida federal magistrate judge on Sept. 7 recommended denying an insurer's motion for summary judgment after determining that the insurer has a duty to defend its insured in an underlying suit seeking damages as a result of mold and water damages caused by the insured's negligent installation of windows because the damages occurred during the policy periods at issue (National Builders Insurance Co. v. RQ Building Products Inc. et al., No. 17-61474, S.D. Fla., 2018 U.S. Dist. LEXIS 153900).

Panel Says Evidence Shows Insured Made False Statements About Water, Mold Damage
DETROIT - The Michigan Court of Appeals on Sept. 4 affirmed a ruling in favor of a homeowners insurer after determining that the evidence clearly shows that the insured made material false statements regarding prior water and mold damage within her home (Bony Rochlani v. Sanford Aaron and Acujust LLC, et al., Nos. 336651, 336768, 336786, Mich. App., 2018 Mich. App. LEXIS 3104).

No Coverage Owed For Damages Caused By Sewer Line Failure, Judge Says
SAN FRANCISCO - An insurer has no duty to provide coverage for damages incurred as a result of a sewer line failure to a building that housed an insured restaurant because the policy at issue did not provide coverage for buildings and clearly excluded coverage for damages caused by subsurface water, a California federal judge said Sept. 5 in entering summary judgment in favor of the insurer (Ken Tu, et al. v. Dongbu Insurance Co. Ltd., No. 17-3495, N.D. Calif., 2018 U.S. Dist. LEXIS 151322).

Insurer Did Not Breach Its Contract, Act In Bad Faith, Judge Concludes
HARTFORD, Conn. - In a dispute over insureds' damages from cracking in their basement walls from the use of defective concrete, a Connecticut federal judge on Sept. 5 granted summary judgment to an insurer on breach of contract and bad faith claims against it (Kenneth T. Courteau, et al. v. Teachers Insurance Co., No. 16-00580, D. Conn., 2018 U.S. Dist. LEXIS 150784).

Pollution Exclusion Does Not Bar Coverage For Concrete Dust Damages
ALEXANDRIA, Va. - A pollution exclusion does not apply as a bar to coverage for an insured's damages caused by concrete dust because the smoke created by the saw used in installing an elevator is a specified cause of loss, a Virginia federal judge said Aug. 29 (Allied Property & Casualty Insurance Co. v. Zenith Aviation Inc., No. 18-264, E.D. Va., 2018 U.S. Dist. LEXIS 147627).

Pennsylvania Supreme Court Denies Insured's Petition For Appeal In Environmental Suit
HARRISBURG, Pa. - The Pennsylvania Supreme Court on Aug. 22 refused to hear an insured's appeal of a lower court's ruling that no coverage is owed for environmental contamination at a number of sites throughout the country because it is not clear that the contamination was caused solely by the insured's operations and the policies at issue provide coverage only for contamination that was caused by the insured's operations (Consolidated Rail Corp. v. ACE Property & Casualty Insurance Co., et al., No. 138 EAL 2018, Pa. Sup., 2018 Pa. LEXIS 4399).

Insured Seeks Reversal Of Choice-Of-Law Ruling In Contamination Coverage Suit
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals should reverse a district court's ruling that California law, rather than Alabama law, applies to an environmental contamination coverage suit because Alabama clearly has the greater interest in applying its law to the coverage dispute, an insured argues in its Aug. 20 appellant brief (Arrow Electronics Inc. v. Aetna Casualty & Surety Co., et al., No. 18-55810, 9th Cir.).

Judge Snuffs Insurer's Appeal Attempt For Denial Of Chapter 7 Conversion
TACOMA, Wash. - A Washington federal judge on Aug. 20 backed a bankruptcy court's decision not to convert Fraser's Boiler Service Inc.'s recent Chapter 11 bankruptcy to a Chapter 7 case, denying an insurer's motion to appeal the ruling because it will not "materially advance" the case (Travelers Indemnity Company v. Fraser's Boiler Service, Inc., No. 18-5489, W.D. Wash.).

Claims Against Insurer Arising Out Of Mold Damage Cannot Stand, Appeals Panel Says
DETROIT - An insured's daughter seeking damages caused by mold exposure within her mother's home has failed to state and support claims against the homeowners insurer, the Michigan Court of Appeals said Aug. 21 in affirming trial court's ruling in favor of the insurer (Carla Abraham v. Farmers Insurance Exchange, et al., No. 335353, Mich. App., 2018 Mich. App. LEXIS 3065).

Federal Judge Dismisses Hotel Franchisee's Suit Against Insurers, Broker
DALLAS - A Texas federal judge on Aug. 17 issued a take-nothing judgment against insurers and an independent insurance broker in a construction defects coverage dispute after issuing three rulings that a hotel franchisee failed to sufficiently allege that the broker is liable for any conduct established in any section of the Texas Insurance Code and failed to state a claim upon which relief can be granted against the insurers (Spih Tyler, LLC v. Liberty Mutual Insurance Co., et al., No. 17-1292, N.D. Texas, 2018 U.S. Dist. LEXIS 139605).

Insured's Bad Faith Claim Arising Out Of Defective Knee Settlements Will Proceed
KALAMAZOO, Mich. - A Michigan federal judge on Aug. 17 refused to dismiss an insured's suit alleging that an insurer acted in bad faith in settling underlying claims arising out of the insured's sale of defective artificial knee joints after determining that the insured stated a viable claim for bad faith that was not addressed in either of two prior lawsuits filed by the insured against the insurer (Stryker Corp. et. al., v. XL Insurance America Inc., No. 17-66, W.D. Mich., 2018 U.S. Dist. LEXIS 140216).

3rd Circuit Affirms Claims By Montana Plaintiffs Are Included In Injunction
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Aug. 14 affirmed a bankruptcy court's ruling in favor of an asbestos liability insurer after determining that a protective injunction in debtor W.R. Grace & Co.'s reorganization plan applies to the asbestos claims asserted by the Montana claimants against the insurer (In re: W.R. Grace & Co., et al., No. 17-1208, 3rd Cir., 2018 U.S. App. LEXIS 22488).

Federal Magistrate Issues Recommendation On Duty To Defend Asbestos Claims
NEW YORK - A New York federal magistrate judge on Aug. 10 recommended that an insured's motion for partial summary judgment on the duty to defend underlying asbestos claims be granted on the claims in which the insured is named as a defendant in its individual capacity but not on the claims in which the insured is named as a defendant in its capacity as a successor in interest (Columbus McKinnon Corp. v. The Travelers Indemnity Co., et al., No. 15-5088, S.D. N.Y., 2018 U.S. Dist. LEXIS 136642).

Insurer Loses Bid For Arbitration With Garlock In Coverage Lawsuit
CHARLOTTE, N.C. - An insurer's obligations to the Garlock Sealing Technologies LLC bankruptcy estate under a $5 million asbestos policy must be determined through litigation, not arbitration, a North Carolina federal judge decided Aug. 20 in affirming a magistrate judge's ruling (Safety National Casualty Corp. v. Garlock Sealing Technologies LLC, et al., No. 3:17-cv-00458, W.D. N.C.).

Excess Insurer Claims No Coverage Owed To Insured For Formaldehyde Flooring Claims
ALEXANDRIA, Va. - An excess insurer claims in a complaint filed in Virginia federal court on Aug. 15 that no coverage is owed to its insured, Lumber Liquidators Inc., for underlying lawsuits alleging injuries as a result of toxic levels of formaldehyde in the insured's laminate flooring (St. Paul Fire and Marine Insurance Co. v. Lumber Liquidators Inc. et al., No. 18-2820, E.D. Va.).

Shoring System Redesign Was Not Cleanup Cost Under Environmental Policy
SAN FRANCISCO - A California federal judge on Aug. 15 determined that an insurer is entitled to summary judgment because the cost of redesigning a temporary shoring system is not a cleanup cost under an environmental legal liability policy (Essex Walnut Owner L.P. v. Aspen Specialty Insurance Co., No. 17-6435, N.D. Calif., 2018 U.S. Dist. LEXIS 138276).

Kentucky High Court Majority Says Mistake Was Not An Occurrence
FRANKFORT, Ky. - The majority of the Kentucky Supreme Court on Aug. 16 reversed an appeals court's ruling in favor of a property owner after determining that an insured's mistake in mining coal from the property owner's land was not an occurrence under the mining insurance policy at issue (American Mining Insurance Co. v. Peters Farms LLC, No. 2017-SC-000066-DG, Ky. Sup., 2018 Ky. LEXIS 287).

Federal Judge Dismisses Suit Seeking Cost Of Earthquake Insurance Premiums
OKLAHOMA CITY - An Oklahoma federal judge on Aug. 13 dismissed a proposed class action complaint seeking to recover the cost of earthquake insurance premiums from a number of injection well operators after determining that the plaintiffs failed to state claims upon which relief could be granted (Matt Meier, et al. v. Chesapeake Operating LLC, et al., No. 17-703, W.D. Okla.).

Florida Appeals Court To Hear Arguments In Water Damage Coverage Dispute
TAMPA, Fla. - The Second District Florida Court of Appeal will hear oral arguments on Sept. 24 in a dispute over whether coverage exists for water damages incurred by insureds as a result of an underground water line that was never capped after a well was abandoned (Ross Simon, et al., v. Security First Insurance Co., No. 2D17-4166, Fla. App., 2nd Dist.).

Insurer Paid Policy Limit For Property Of Others; No Additional Coverage Owed
NEW YORK - An insured's complaint seeking additional coverage for consigned property damaged by water after a pipe burst in a commercial building must be dismissed because the insurer paid the policy's limit for property of others and the insured is not owed any additional coverage under the policy's business personal property provision, a New York justice said Aug. 14 in granting the insurer's motion for summary judgment (Talisman Services Inc. v. Hermitage Insurance Co., No. 151351/2016, N.Y. Sup., New York Co.).

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.