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Legal News & Headlines

No Coverage Owed As Policies Were Not Validly Assigned, Delaware High Court Says
DOVER, Del. - The Delaware Supreme Court on July 16 reversed a lower court's ruling in favor of an insured in an asbestos coverage dispute after determining that Texas law, which does not recognize the assignment of insurance policy rights without an insurer's consent, applies to the policies at issue and, therefore, no coverage is owed under the policies because the insured did not obtain the insurer's consent before assigning the policies at issue (The Travelers Indemnity Co. v. CNH Industrial America LLC, No. 420, 2017, Del. Sup., 2018 Del. LEXIS 334).

Delaware High Court Affirms Judgment In Asbestos Suit In Excess Insurers' Favor
WILMINGTON, Del. - The Delaware Supreme Court on July 10 affirmed a lower court's ruling that Michigan law, rather than Delaware law, applies to excess insurance policies in an asbestos coverage dispute and that the excess insurers were required to respond only to claims that triggered covered under the primary policies (Motors Liquidation Co. DIP Lenders Trust v. Allstate Insurance Co., et al., No. 381, 2017, Del. Sup., 2018 Del. LEXIS 324).

Insurance Policies Possessed By Nonparty Are Relevant, Magistrate Judge Says
BUFFALO, N.Y. - A nonparty company named as a defendant in underlying asbestos suits, along with an insured, must provide an insurer with information about insurance policies it possessed because the policies are relevant in determining the insurer's coverage obligations to its insured, a New York federal magistrate judge said July 16 (American Precision Industries Inc. v. Federal Insurance Co., et al., No. 14-1050, W.D. N.Y., 2018 U.S. Dist. LEXIS 117900).

No Coverage Owed For Pollution Liability Claim, Texas Federal Judge Says
FORT WORTH, Texas - An insurer has no duty to defend an insured against a pollution liability claim because the policy's pollution exclusion clearly applies to bar coverage, a Texas federal judge said July 10 in granting the insurer's motion for summary judgment (Great American Insurance Co. v. Ace American Insurance Co., No. 18-114, N.D. Texas, 2018 U.S. Dist. LEXIS 114098).

Insured Permitted To Offer Evidence Related To Cessation Of Remediation Work
KANSAS CITY, Mo. - A Missouri federal judge on July 12 denied an insurer's motion to exclude evidence related to an insured's cessation of environmental remediation work at a former ammunition plant owned by the insured after determining that the theory presented by the insured is not a new theory and, therefore, would not be prejudicial to the insurer (Sunflower Redevelopment LLC v. Illinois Union Insurance Co., No. 15-577, W.D. Mo., 2018 U.S. Dist. LEXIS 116062).

Insureds' Mold Coverage Suit Remanded To Louisiana State Court
NEW ORLEANS - A Louisiana federal judge on July 13 granted a motion to remand a mold coverage suit filed by insureds after determining that the insurer failed to prove that the insurance agency was fraudulently joined to defeat diversity jurisdiction (Allen T. Jackson, et al. v. QBE Specialty Insurance Co., et al., No. 17-11730, E.D. La., 2018 U.S. Dist. LEXIS 116990).

Judge Orders Review Of Insurer's Documents In Water Damage, Mold Suit
SEATTLE - In a water damage and mold coverage suit concerning an insurer's denial of investigation costs, a Washington federal judge on July 12 ordered an in camera review of documents provided by the insurer to determine whether attorney-client privilege applies (Market Place North Condominium Association v. Affiliated FM Insurance Co., No. 17-625, W.D. Wash., 2018 U.S. Dist. LEXIS 116381).

Judge Says Only 1 Insurer May Have To Cover Claim For Foundation Deterioration
ROCKVILLE, Conn. - A Connecticut state judge on June 28 determined that only one of five insurers may have to provide coverage to insureds for the deterioration of the insureds' basement walls as a result of the oxidization of the concrete used to construct the basement's walls (Richard N. Dino, et al. v. Safeco Insurance Company of America, et al., No. CV166010428S, Conn. Super., 2018 Conn. Super. LEXIS 1262).

No Coverage Afforded For Contamination Caused By Dry Cleaning Business
SACRAMENTO, Calif. - Insurers of decedents who owned a dry cleaning business and the property on which the business was located owe no coverage for environmental contamination discovered on the property's site because the environmental contamination was not sudden and accidental as required by the policies' pollution exclusions, a California federal judge said July 2 (Miller Marital Deduction Trust, et al. v. Estate of Mark B. DuBois, et al., No. 16-1883, E.D. Calif., 2018 U.S. Dist. LEXIS 111348).

Federal Judge Adopts Recommendation To Approve Motion For Settlement
PORTLAND, Ore. - An Oregon federal judge on June 29 adopted a magistrate judge's findings and recommendations that a motion for settlement between an insured and a number of insurers involved in an environmental contamination coverage dispute should be granted and that the nonsettling insurers are entitled to retain their equitable offset rights (Evraz Inc. N.A. v. Continental Insurance Co., et al., No. 08-447, D. Ore., 2018 U.S. Dist. LEXIS 109152).

District Court Erred In Finding For Excess Insurer In Chinese Drywall Suit, Contractor Says
ATLANTA - The 11th Circuit U.S. Court of Appeals should reverse a district court's ruling in favor of an excess insurer in a Chinese drywall coverage dispute because the district court failed to apply to correct standard of law in finding that the excess insurer has no duty to indemnify, a contractor agues in a July 9 brief (American Home Assurance Co. v. Gryphon Construction LLC et al., No. 18-12031, 11th Cir.).

Judge Addresses Motions To Exclude Testimony In Reinsurer, Insurer Dispute
SYRACUSE, N.Y. - A New York federal judge on June 27 addressed motions to bar testimony and evidence such as on follow the fortunes and follow the settlements in a dispute over whether the reinsurer is obligated to pay $3.2 million in reinsurance proceeds for the insurer's defense expenses from an asbestos claims settlement (Utica Mutual Insurance Co. v. Munich Reinsurance America Inc., Nos. 12-00196 & 13-00743, N.D. N.Y., 2018 U.S. Dist. LEXIS 106970).

Texas High Court: Court Wrongfully Disregarded Affidavit In Storm Coverage Dispute
AUSTIN, Texas - The Texas Supreme Court on June 29 reversed and remanded an appeals court's finding that insureds failed to produce competent evidence to raise a genuine issue of material fact as to whether their property damage loss occurred during their homeowners insurance policy period, concluding that because the insurer failed to obtain a ruling from the trial court on its objections to an affidavit's form, the appeals court wrongly disregarded the affidavit (Richard Seim and Linda Seim v. Allstate Texas Lloyds and Lisa Scott, No. 17-0488, Texas Sup., 2018 Tex. LEXIS 648).

Insureds: Erroneous Jury Instructions Require New Trial In Sinkhole Coverage Suit
LAKELAND, Fla. - Insureds have asked a Florida appeals court to reverse and remand a lower court's ruling in favor of a homeowners insurer in their breach of contract lawsuit over sinkhole damage, alleging that the lower court erred by instructing the jury that they were required to prove that the subsurface remediation recommendations by an independent engineering firm were insufficient to stabilize the land and building and repair the foundation (Joseph and Rhonda Tipton v. Old Dominion Insurance Company, No. 2D17-2276, Fla. App., 2nd Dist.).

Magistrate Recommends Favorable Ruling For Insurer In Suit Over Defective Battery
CENTRAL ISLIP, N.Y. - A New York federal magistrate judge on June 20 recommended granting a commercial general liability insurer's motions for a default judgment and summary judgment in its declaratory judgment lawsuit challenging coverage for an underlying personal injury suit allegedly caused by a defective battery purchased at the insured's vapor smoke shop (Certain Underwriters at Lloyd's London v. EBE of NY, Inc., No. 16-6938, E.D. N.Y., 2018 U.S. Dist. LEXIS 105120).

N.J. High Court Majority Affirms Allocation Ruling In Asbestos Coverage Dispute
TRENTON, N.J. - A majority of the New Jersey Supreme Court on June 27 upheld an appellate court's rulings that New Jersey law applies to insurance allocation determinations in an asbestos coverage dispute and that an insured is not required to assume any responsibility in the coverage allocations because excess coverage for the asbestos bodily injury claims was no longer available to the insured within the marketplace (Continental Insurance Co., et al. v. Honeywell International Inc., et al., No. A-21-16, N.J. Sup., 2018 N.J. LEXIS 832).

Widow Seeks To Re-enter Suit Against Johns-Manville Insurance Broker
NEW YORK - A second appeal in a suit seeking to hold Johns-Manville Corp.'s insurance broker independently liable for asbestos personal injury claims now hinges on who is actually prosecuting the case - an asbestos claimant's estate or the estate's law firm, according to court ordered supplemental briefs filed June 27 in New York federal court (The Bogdan Law Firm v. Marsh USA, Inc., No. 1:18-cv-01228, S.D. N.Y.).

Magistrate Judge: Insured, Insolvent Insurer Settle Silica Coverage Dispute
PHILADELPHIA - An insured and an insolvent insurer settled a breach of contract coverage dispute over underlying personal injury cases involving exposure to silica dust, according to a Pennsylvania federal magistrate judge's June 25 order (Empire Abrasive Equipment Company LP v. Acceptance Insurance Co., No. 16-6331, E.D. Pa.).

Construction Of Treatment Plant To Stop Acid Water Discharge Was Not Occurrence
CLEVELAND - A trial court did not err in granting summary judgment in favor of insurers involved in an environmental contamination dispute because the construction of a treatment plant to prevent the discharge of acid water from a mine was not an occurrence under the policies at issue, the Eighth District Ohio Court of Appeals said June 28 (Bellaire Corp. v. American Empire Surplus Lines Insurance Co. et al., No. 106243, Ohio App., 8th Dist., Cuyahoga Co., 2018 Ohio App. LEXIS 2706).

Missouri Federal Judge Says Pollution Liability Policy Covers Remediation Costs
KANSAS CITY, Mo. - A Missouri federal judge on June 25 granted an insured's motion for partial summary judgment after determining that a premises pollution liability policy provides coverage for remediation costs and that letters from the Kansas Department of Health and Environment notifying the insured of its liability for the remediation constitute a claim under the policy (Sunflower Redevelopment LLC v. Illinois Union Insurance Co., No. 15-577, W.D. Mo., 2018 U.S. Dist. LEXIS 105300).

Insurer Failed To Prove Water Loss Occurred After 14 Days, Florida Panel Says
DAYTONA BEACH, Fla. - The Fifth District Florida Court of Appeal on June 29 reversed and remanded a trial court's ruling in favor of an insurer after determining that the insurer failed to prove that the water loss occurred after 14 days as required by the policy's water leakage exclusion (Larry S. Whitely et al. v. American Integrity Insurance Company of Florida, No. 5D16-3719, Fla. App., 5th Dist., 2018 Fla. App. LEXIS 9204).

Panel Reverses, Remands Order Disqualifying Entire Law Firm From Case
SANTA ANA, Calif. - The Fourth District California Court of Appeal on June 26 reversed and remanded a trial court's order disqualifying an entire law firm from representing an insurer in a coverage dispute over the insured's manufacture of defective flexible toilet connectors after determining that the decision must be reconsidered in light of the fact that the attorney, who had previously done work for the insured, left the law firm following the trial court's order of disqualification (Fluidmaster Inc. v. Fireman's Fund Insurance Co., No. G055469, Calif. App., 4th Dist., Div. 3, 2018 Cal. App. Unpub. LEXIS 4396).

Coverage May Exist; Policy Covers Collapse Caused By Hidden Decay, Judge Says
BRIDGEPORT, Conn. - An insurer's motion to dismiss a complaint filed by insureds seeking coverage for their cracking foundation walls caused by a chemical reaction in the concrete must be denied because a possibility for coverage exists as the policy at issue provides coverage for collapse caused by hidden decay and defective construction materials, a Connecticut federal judge said June 20 (Mark C. Maki, et al. v. Allstate Insurance Co., No. 17-1219, D. Conn., 2018 U.S. Dist. LEXIS 102708).

Dismissal Of Declaratory Judgment Counterclaim In Collapse Suit Not Warranted
NATCHEZ, Miss. - Dismissal of a declaratory judgment claim filed by an insured and others involved in a dispute arising out of the collapse of a building is not warranted because the counterclaimants have alleged facts showing that an actual coverage dispute exists, a Mississippi federal judge said June 25 (Hudson Specialty Insurance Co. v. Talex Enterprises LLC, et al., No. 17-137, S.D. Miss., 2018 U.S. Dist. LEXIS 105598).

11th Circuit Dismisses Appeal In Mold Damages Suit, Says Orders Are Not Appealable
ATLANTA - The 11th Circuit U.S. Court of Appeals on June 18 dismissed an appeal by insureds seeking coverage for mold damages after determining that jurisdiction does not exist because the district court did not issue a final and appealable judgment against the insureds (A. Denise Aldridge, et al. v. Travelers Home and Marine Insurance Co., No. 18-11310, 11th Cir., 2018 U.S. App. LEXIS 16406).

Insureds Seek Reversal Of Trial Court's Ruling In Mold Coverage Suit
MIAMI - A trial court erred when it refused to set aside a jury verdict on the amount of coverage owed to insureds who sought coverage for mold and water damages within their home because the policy's cap on mold damages should not have been applied as the insurer agreed to remediate the damage, the insureds maintain in a May 10 brief filed in the Third District Florida Court of Appeal (Jose and Marina Santos v. American Integrity Insurance Company of Florida, Nos. 3D17-2039, 3D17-2098, Fla. App., 3rd Dist., 2018 FL App. Ct. Briefs LEXIS 1911).

Appraisal Not Appropriate Until Issue Of Coverage For Water Damage Is Resolved
BRIDGEPORT, Conn. - An insured's motion to compel appraisal in a water damage coverage suit is premature because the issue of whether additional coverage exists for the damages must first be resolved, a Connecticut federal judge said June 18 (Ice Cube Building LLC v. Scottsdale Insurance Co., d/b/a Scottsdale Insurance Group, No. 17-973, D. Conn., 2018 U.S. Dist. LEXIS 101308).

Bad Faith Claim Stands; Insured Sufficiently Addressed Reasonableness Of Actions
PHILADELPHIA - An insured sufficiently stated facts in support of a bad faith claim against a homeowners insurer because the insured's allegations address the reasonableness of the insurer's actions, a Pennsylvania federal judge said June 21 in denying the insurer's motion to dismiss the bad faith claim (Carol Kunsman v. Metropolitan Direct Property and Casualty Insurance Co., No. 17-4619, E.D. Pa., 2018 U.S. Dist. LEXIS 104621).

Insurer, Claims Company Deny Fraud Claims, Seek To Remove Bankruptcy Reference
CHICAGO - Fraud allegations leveled by the Oakfabco Inc. Asbestos Claimants' Committee against insurers and a claims management company involving missing asbestos policies fail because the committee cannot even prove that the policies exist, the insurers and company say May 30 in an Illinois federal bankruptcy adversary case (Asbestos Claimants Committee v. American Casualty Company of Reading, PA, et al., No. 18-00002, N.D. Ill. Bkcy.).

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.