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Legal News & Headlines

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.).

Magistrate Judge Says Pollution Exclusion Bars Coverage For Black Powder
PITTSBURGH - A Pennsylvania federal magistrate judge on Dec. 31 recommended granting an insurer's motion for summary judgment and denying an insured's motion for summary judgment because it is clear that a pollution exclusion bars coverage for a black powder that contaminated the insured's property (Vale Vista Associates L.P. v. The Cincinnati Casualty Co., No. 18-1064, W.D. Pa., 2019 U.S. Dist. LEXIS 223366).

Excess Insurers' Denials Of Coverage Were Not Unfair Or Deceptive, Judge Says
RALEIGH, N.C. - Insureds seeking coverage for underlying lawsuits arising out of the operation of a hog farm failed to support their contention that their excess insurers' denials of coverage based on pollution exclusions in the excess policies were an unfair or deceptive trade practice, a North Carolina judge said Dec. 16 (Murphy-Brown LLC, et al. v. ACE American Insurance Co., et al., No. 19-2793, N.C. Super, Wake Co., 2019 NCBC LEXIS 110).

Insurer Owes Coverage For Lead Paint Dust Contamination, Illinois Panel Says
CHICAGO - A trial court erred in granting judgment in favor of a commercial general liability insurer because an underlying complaint filed against the insured seeking damages for lead paint dust contamination alleges an occurrence and constitutes property damage for which coverage is afforded, the an Illinois appellate panel said Dec. 31 (Owners Insurance Co. v. Precision Painting & Decorating Corp., No. 1-19-0926, Ill. App., 1st Dist., Div. 3, 2019 Ill. App. Unpub. LEXIS 2425).

Mediation Session Approved For Insurer Row With Imerys, Claimants
WILMINGTON, Del. - Disputes among Chapter 11 debtor Imerys Talc America Inc., one of its insurers and tort claimants' representatives are headed to mediation, with a Delaware federal bankruptcy judge on Dec. 26 approving a two-day negotiating session requested by the parties (In re: Imerys Talc America, Inc., et al., No. 19-10289, D. Del. Bkcy.).

7th Circuit Hears Oral Arguments In Environmental Contamination Dispute
CHICAGO - The Seventh Circuit U.S. Court of Appeals on Jan. 8 heard oral arguments in an environmental contamination coverage suit and will decide if a district court properly found that an insurer owes no coverage for environmental contamination claims asserted by neighbors based on the insured's alleged late notice (Carmine Greene, et al. v. Kenneth Will, et al., No. 19-2260, 7th Cir.).

No Coverage For Water Damage To Exterior Insulation Finishing System, Panel Affirms
DENVER - The 10th Circuit U.S. Court of Appeals on Jan. 9 held that the "flawed design" of a home's exterior insulation finishing system (EIFS) constitutes "faulty design" and, therefore, there is no coverage for water damage discovered within the EIFS (Mark Mock, et al. v. Allstate Insurance Company, No. 18-1407, 10th Cir.).

8th Circuit Affirms No Coverage Ruling For Losses Related To Rock Falls
ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on Jan. 3 affirmed a lower federal court's ruling in favor of primary and excess insurers in the insurers' lawsuit disputing coverage for its losses related to four rock falls, rejecting the insured's argument that the dome-outs were caused by "building decay" under the policy (Westchester Surplus Lines Insurance Company, et al. v. Interstate Underground Warehouse & Storage Inc., No. 18-3448, 8th Cir.).

South Carolina Panel: No Coverage Owed To Company Successor Under Policies
CHARLESTON, S.C. - The South Carolina Court of Appeals on Dec. 18 affirmed a trial court's dismissal of a corporate successor's claims against a number of insurers, agreeing with the trial court's finding that the successor has no rights under the predecessor's policies because the policies were expired when the new company was purchased and there was execution of an assignment of rights to the insurance policies (PCS Nitrogen Inc. v. Continental Casualty Co., et al., No. 5699, S.C. App.).

Judge: Intervening Insurers Can Represent Estates, Corporation In Cleanup Suit
RIVERSIDE, Calif. - A federal judge in California on Dec. 20 denied a motion for judgment on the pleadings brought by two estates seeking cost recovery under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for remediation costs associated with the cleanup of perchloroethylene (PCE) contamination caused by dry cleaning operations, finding that insurers can represent two defendant estates and a suspended corporation (Estate of Betty Goldberg, et al. v. Goss-Jewett Co., et al., No. 14-1872, C.D. Calif.).

Federal Judge Strikes 3 Of Insureds' Affirmative Defenses In Oil Spill Suit
HARTFORD, Conn. - A Connecticut federal judge on Dec. 31 granted a homeowners insurer's motion to strike three affirmative defenses asserted by insureds seeking additional coverage for an oil spill on their property after determining that the insureds failed to sufficiently allege facts supporting their affirmative defenses of waiver, laches and unclean hands (Murray Haber, et al. v. Bankers Standard Insurance Co., No. 19-276, D. Conn., 2019 U.S. Dist. LEXIS 222847).

Insurer Cannot Add Breach Of Contract Claim In Asbestos Coverage Dispute
MINNEAPOLIS - A Minnesota federal magistrate judge on Dec. 17 granted an insurer's motion to amend its complaint as it pertained to deleting allegations but denied the motion as it pertained to adding a breach of implied contract claim against the insured in an asbestos coverage dispute because the insurer could have and should have added the claim prior to the court's scheduling deadline for filing amended pleadings (The Continental Insurance Co. v. Daikin Applied Americas Inc., No. 17-552, D. Minn., 2019 U.S. Dist. LEXIS 216639).

Estate, Manville Broker Debate Supplemental Ruling In 2nd Circuit
NEW YORK - Supplemental authority provided by an asbestos plaintiff's law firm to support its position that its client, not the firm, is the real party in interest for claims against a debtor's insurance broker actually back the broker's position that the mislabeling of parties renders the claims invalid, the broker says in its Dec. 16 letter to the Second Circuit U.S. Court of Appeals in reply (In re Johns-Manville Corp., Marsh USA, Inc. v. The Bogdan Law Firm, No. 18-2531, 2nd Cir.).

Reinsurer Appeals Judgment, Adverse Orders In Dispute With Insurer Over Billings
UTICA, N.Y. - A reinsurer on Dec. 27 told a New York federal court that it is appealing a $6.25 million judgment in favor of an insurer and prior adverse orders in a dispute between the parties over coverage under two separate reinsurance certificates for settlements of asbestos claims (Utica Mutual Insurance Co. v. Century Indemnity Co., No. 13-995, N.D. N.Y.).

No Coverage Owed For Mold Caused By Defective Installation Of Insulation
SALT LAKE CITY - No coverage is owed to an insured for an underlying suit alleging that the insured's installation of attic insulation caused mold to develop in attics of condominium buildings because the installation of the insulation does not constitute an occurrence, a Utah federal judge said Dec. 23 in granting the insurer's motion for summary judgment (Cincinnati Specialty Underwriters Insurance Co. v. Green Property Solutions LLC, et al., No. 19-00010, D. Utah, 2019 U.S. Dist. LEXIS 220161).

No Coverage Owed For Water Damage To Insured's Underground Storage Tanks
BOISE, Idaho - The Idaho Supreme Court on Dec. 23 affirmed a trial court's summary judgment ruling in favor of an insurer on breach of contract and bad faith claims because the policy's water exclusion clearly bars coverage for water damages to the insured's underground storage tanks (USTs) (ABK LLC v. Mid-Century Insurance Co., No. 46430, Idaho Sup., 2019 Ida. LEXIS 257).

Suit Limitations Provisions Do Not Bar Suit Seeking Coverage For Hidden Damage
PORTLAND, Ore. - An Oregon federal judge on Dec. 20 determined that suit limitations provisions in two insurers' policies do not bar an insureds' suit seeking coverage for hidden water damage because the term "occurred" as used in the limitations provisions is ambiguous and must be construed in favor of the insured (Housing Northwest Inc. v. American Insurance Co., et al., No. 19-253, D. Ore., 2019 U.S. Dist. LEXIS 219168).

Judge Certifies Appeal Over Stay Of Asbestos Coverage Case Between Insurer, Insured
CINCINNATI - A federal judge in Ohio on Dec. 16 certified an insurer's interlocutory appeal regarding the judge's previous order staying an insured's breach of contract and bad faith suit arising out of the insured's liability for underlying asbestos claims (William Powell v. National Indemnity Co. et al., No. 14-807, S.D. Ohio, 2019 U.S. Dist. LEXIS 215554).

Reinsurer Opposes Insurer's Motion To Confirm 2nd Award Over Asbestos Claims Billings
CHICAGO - A reinsurer argues in a Dec. 13 brief that an Illinois federal court should not confirm a second award reversing parts of a first award over reinsurance billings for asbestos claims under five out of six contracts but should confirm the first award and part of the second award resolving the dispute under the sixth contract (Allstate Insurance Co. v. Amerisure Mutual Insurance Co., No. 19-4341; Amerisure Mutual Insurance Co. v. Allstate Insurance Co., No. 19-7080, N.D. Ill.).

Insurers Permitted To Depose Company Officials In Contamination Suit
CHARLOTTE, N.C. - A North Carolina state business court judge on Dec. 6 partially granted a motion to compel the depositions of an insured's top company officials after determining that the information sought by the insurers from the officials is relevant to the environmental contamination coverage dispute (Duke Energy Carolinas LLC, et al., v. AG Insurance SA, et al., No. 17-5594, N.C. Business, 2019 NCBC LEXIS 103).

Environmental Liability Insurer Owes Additional $2.9M In Coverage, Insured Says
BOSTON - An environmental liability insurer must pay an additional $2.9 million for the discharge of wastewater at an insured food processing facility because mitigation costs related to the pollution event are covered under the policy at issue, the insured asserts in a Dec. 11 complaint filed against the insurer in Massachusetts federal court (Ken's Foods Inc. v. Steadfast Insurance Co., No. 19-12492, D. Mass.).

3rd Circuit Upholds Compelling Of Arbitration In Reinsurance Dispute
PHILADELPHIA - A Pennsylvania federal judge did not err in sending a consolidation question to a new panel of arbitrators instead of the previous panel, the Third Circuit U.S. Court of Appeals affirmed Dec. 6 in a reinsurance coverage dispute over lead paint losses arising in the Maryland area (Pennsylvania National Mutual Casualty Insurance Co. v. New England Reinsurance Corp., et al., No. 19-1805, 3rd Cir., 2019 U.S. App. LEXIS 36388).

10th Circuit Affirms Dismissal Of Insurer's Breach Of Contract Case Based On 'Suit' Definition
DENVER - Finding no error in a lower court's interpretation of an insurance policy's definition of "suit," the 10th Circuit U.S. Court of Appeals on Dec. 6 affirmed that an insurer failed to assert a breach of contract claim against an insured for its alleged failure to pay per-occurrence deductibles that would have offset an amount the insurer paid to settle underlying water damage claims filed by townhome owners and an association (Mid-Continent Casualty Co. v. Greater Midwest Builders Ltd., et al., No. 18-3113, 10th Cir., 2019 U.S. App. LEXIS 36302).

Judge Says Common-Law Bad Faith Claim Cannot Proceed Against Insurer
GREENSBORO, N.C. - A North Carolina federal judge on Dec. 5 determined that an insured's breach of the covenant of good faith and fair dealing claim can proceed but that the insured's bad faith claim cannot stand because there was a legitimate dispute as to whether coverage was afforded under the policy for the collapse of a breezeway at a building owned by the insured (DENC LLC v. Philadelphia Indemnity Insurance Co., No. 18-754, M.D. N.C., 2019 U.S. Dist. LEXIS 209651).

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.