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Legal News & Headlines

Texas High Court Grants Insurer New Trial In Defect Coverage Dispute
AUSTIN, Texas - A judgment in an underlying construction defect lawsuit is not binding on an insurer because its insured builder did not have a sufficient financial stake in the outcome due to a pretrial agreement, the Texas Supreme Court ruled June 16, granting a new trial over whether the insurer must cover the construction defect claims (Great American Insurance Co., et al. v. Glen Hamel, et al., No. 14-1007, Texas Sup., 2017 Tex. LEXIS 553).

Texas Federal Judge Says Insurer Has Duty To Defend Underlying Negligence Suit
DALLAS - An insurer has a duty to defend its insured in an underlying suit alleging that the insured failed to properly remediate water damage to property in storage because the underlying suit claims that the insured's actions were negligent, a Texas federal judge said June 14 (Bedivere Insurance Co., f/k/a General Accident Insurance of America v. Pacific Van & Storage of Texas Inc., d/b/a Joyce Moving and Storage Co. Inc., et al., No. 16-1111, N.D. Texas, 2017 U.S. Dist. LEXIS 91265).

Insurer Seeks Equitable Contribution For Insured's Defense In 3 Defects Suits
MORRISTOWN, N.J. - An insurer claims in a June 2 complaint filed in New Jersey state court that it is entitled to equitable contribution from another insurer because the other insurer improperly denied coverage to its insured for three construction defects lawsuits filed against the insured (Zurich American Insurance Co., as successor by merger to Assurance Company of America, et al. v. Crum & Forster Specialty Insurance Co., et al., No. L-1233-17, N.J. Super., Morris Co.).

Sewage Is A Pollutant; Coverage Is Barred, Insurer Argues In 11th Circuit Brief
ATLANTA - An Alabama federal judge erred in finding that coverage is provided for two underlying lawsuits alleging injuries from sewage exposure because a total pollution exclusion is not limited to traditional industrial or environmental pollution and bars coverage, an insurer argues in its June 8 reply brief filed in the 11th Circuit U.S. Court of Appeals (Evanston Insurance Co. v. J&J Cable Construction LLC, et al., No. 17-11188, 11th Cir.).

California Panel Affirms No Coverage For Dentist's Claim For Lost Practice Income
SACRAMENTO, Calif. - A California appeals panel on June 13 affirmed a lower court's ruling in favor of an insurer in a dispute over coverage for an individual dentist's claim for lost dental practice income due to a sewage backup (William A. Gilbert v. The Dentists Insurance Company, Inc., No. C075959, Calif. App., 3rd Dist., 2017 Cal. App. Unpub. LEXIS 4041).

Reinsurer Seeks Trial Date Move After Failed Settlement Discussions
UTICA, N.Y. - Following failed settlement talks, a reinsurer in a June 12 letter requests that a New York federal court move the trial date in a reinsurance dispute from September to October to accommodate the schedule of its two key witnesses (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-cv-00853, N.D. N.Y.).

Court Schedules Discovery Into Rapid-American, Insurer Policy Limits Dispute
NEW YORK - A New York federal bankruptcy judge on June 6 issued a scheduling order for fact discovery and identification of expert witnesses in a dispute between Chapter 11 debtor Rapid-American Corp. and one of its insurers over whether a policy has a $7 million or $14 million limit for asbestos liability claims (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).

Insurer Seeks Rescission Of Contamination Policy For Alleged Misrepresentation
NEW YORK - An insurer alleges in a June 14 complaint that rescission of a contamination products insurance policy is warranted because the insured, seeking coverage for a recall of frozen peas, failed to disclose that Listeria was discovered in its production facility prior to the issuance of the policy (Berkley Assurance Co. v. National Frozen Foods Corp., No. 17-4486, S.D. N.Y.).

Delaware Judge Determines Insurance Policies Were Properly Transferred
WILMINGTON, Del. - A Delaware judge on June 8 denied a motion for summary judgment filed by an excess insurer in an asbestos coverage dispute after determining that the insurer's policies were not excluded from an asset transfer between the insured and its statutory trust after the insured went bankrupt (Motors Liquidation Co. DIP Lenders Trust v. Allianz Insurance Co., No. N11C-12-022 PRW, Del. Super., New Castle Co., 2017 Del. Super. LEXIS 279).

Court: Action Alleging Asbestos Defendant Withheld Insurance Coverage Time-Barred
BALTIMORE - Asbestos plaintiffs were on notice that a settling defendant could have more access to insurance coverage than previously disclosed after Porter Hayden, in which a court concluded that the aggregate limits in product liability policies did not apply to installation or operation claims, a Maryland appeals court held June 1 (Estate of Harold L. Adams, et al. v. Continental Insurance Co. No. 1065 September Term 2014, Md. Sp. App., 2017 Md. App. LEXIS 567).

Pennsylvania Federal Judge: Duty To Defend Is Owed For Contaminated Water Suit
PITTSBURGH - Insurers have a duty to defend a school district and its superintendent against an underlying suit alleging that the district was negligent in failing to monitor a water system that became contaminated with lead and copper because the underlying complaint sounds in negligence and it is unclear if the underlying injuries were caused by the ingestion of lead, a Pennsylvania federal judge said June 9 (The Netherlands Insurance Co., et al. v. Butler Area School District, et al., No. 17-341, W.D. Pa., 2017 U.S. Dist. LEXIS 89073).

Connecticut Judge Says Insured Breached Policies' 'No Voluntary Payments' Clause
HARTFORD, Conn. - Because an insurer was prejudiced by an insured's breach of the policies' "no voluntary payments" provision when it failed to notify the insurer of an environmental contamination cleanup plan, a Connecticut Superior Court judge on May 19 granted the insurer's motion for partial summary judgment as it pertained to the "no voluntary payments" provision (MacDermid Inc. v. The Travelers Indemnity Co., et al., No. 12-6067744, Conn. Super., 2017 Conn. Super. LEXIS 937).

Syndicates Ask Court To Compel Reinsurer To Follow Umpire Selection Process
BOSTON - In a dispute over environmental claims, a collection of insurance syndicates on May 31 asked a Massachusetts federal court to compel a reinsurer to arbitrate their disagreement and to enforce the parties' agreed-to procedure for the selection of an umpire (Certain Underwriters at Lloyd's, London v. Transport Insurance Co., No. 17-10618, D. Mass.).

Hazardous Materials Exclusion May Not Bar Coverage, Appeals Court Says
ROCHESTER, N.Y. - A New York appellate panel on June 9 affirmed a trial court's denial of an insurer's motion for summary judgment after determining that a policy's hazardous materials exclusion may not preclude coverage for an underlying suit alleging damages caused by "malodorous conditions" created by the insured's recycling facility (Hillcrest Coatings Inc., et al., v. Colony Insurance Co., No. 597 CA 16-01898, N.Y. Sup., App. Div., 4th Dept., 2017 N.Y. App. Div. LEXIS 4519).

Judge Finds Policy Covered Water Vapor Damage, Rejects Insurer's Arguments
BILLINGS, Mont. - A Montana federal judge on June 6 granted summary judgment in favor of a property owner, finding that issues of fact exist as to whether a contractor caused a furnace vent pipe to disconnect, resulting in water damage, but found that the damage was covered under a homeowners insurance policy (Landy C. Leep v. Trinity Universal Insurance Co., No. 16-57, D. Mont., 2017 U.S. Dist. LEXIS 86759).

6th Circuit Majority Says Agreement Barred Future Claims For Cleanup Costs
CINCINNATI - The majority of the Sixth Circuit U.S. Court of Appeals on June 1 affirmed a district court's ruling that a 1994 settlement agreement bars coverage for any future claims arising out of coverage for environmental cleanup costs incurred by the insured at a Superfund site in Texas (Arrowood Indemnity Company v. Lubrizol Corporation, No. 16-3463, 6th Cir.; 2017 U.S. App. LEXIS 9854).

New Jersey High Court Remands Environmental Coverage Dispute
TRENTON, N.J. - The New Jersey Supreme Court on May 19 remanded an environmental contamination coverage case to allow the New Jersey Superior Court Appellate Division to reconsider its ruling regarding a successor company's rights under its predecessor's insurance policies in light of the high court's February 2017 ruling in a similar environmental contamination suit that also addressed the assignment of policy rights (Haskell Properties LLC v. The American Insurance Co., et al., No. 078210, N.J. Sup.).

Kaiser Gypsum's Insurance Coverage Dispute Sent Back To Oregon Court
CHARLOTTE, N.C. - An insurance coverage dispute over two polluted sites in Oregon and Washington between Chapter 11 debtor Kaiser Gypsum Co. and its insurers will not be decided by a North Carolina bankruptcy court after the court remanded the case May 16 (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

Pollution Exclusion Bars Coverage For Sewage Contamination, Panel Affirms
NEW YORK - The Second Circuit U.S. Court of Appeals on May 31 affirmed a district court's ruling that a policy's pollution exclusion relieves an insurer of its duty to defend an insured plumbing company for an underlying suit arising out of the discharge of hazardous chemicals into nearby homes while the insured was refurbishing a sewer system (Cincinnati Insurance Co. v. Roy's Plumbing Inc., et al., No. 16-2511, 2nd Cir.).

District Court Correctly Found Sewage Is Not A Pollutant, Appellee Tells 11th Circuit
ATLANTA - An Alabama federal judge correctly determined that a policy's total pollution exclusion cannot be asserted as a bar to coverage for two underlying lawsuits alleging injuries from sewage exposure because the interpretation is consistent with Alabama law, an appellee argues in a May 25 brief filed in the 11th Circuit U.S. Court of Appeals (Evanston Insurance Co. v. J&J Cable Construction LLC, et al., No. 17-11188, 11th Cir.).

Insured Says Ohio Supreme Court Should Refuse To Review Asbestos Occurrence Ruling
CINCINNATI - The Ohio Supreme Court should refuse to review an appellate court's ruling that an insured's liability for underlying asbestos claims arose from multiple occurrences because the appellate court correctly determined that each individual's exposure to asbestos constitutes an occurrence, an insured maintains in an April 24 response to an insurer's petition for review (The William Powell Co. v. OneBeacon Insurance Co., et al., No. 2017-0411, Ohio Sup.).

Asbestos Claimants Nix Plan To Have District Court Hear Oakfabco Insurance Dispute
CHICAGO - A federal judge will not decide a dispute over the amount of money available to Chapter 11 debtor Oakfabco Inc. to pay asbestos claims under two lost insurance policies after the judge on May 17 granted the Asbestos Claimants' Committee's request to withdraw its motion to move the dispute from bankruptcy court (Asbestos Claimants Committee v. Oakfabco Inc., et al., No. 17-03336, N.D. Ill.).

No Coverage Owed For Mold Growth In Insured's Home, Federal Judge Says
COLUMBIA, S.C. - A South Carolina federal judge on June 1 granted an insurer's motion for summary judgment after determining that the insurer presented sufficient evidence proving that no coverage is afforded for mold growth within an insured's home (Pansy Clayton v. Nationwide Mutual Insurance Co., No. 16-2467, D. S.C., 2017 U.S. Dist. LEXIS 83658).

Coverage Barred For Construction Defects Claims, Insurer Says In Complaint
TAMPA, Fla. - No coverage is owed for an underlying suit seeking damages as a result of water intrusion and other construction defects because coverage is barred for the underlying claims by exclusions for mold, pollution and impaired property, an insurer claims in a May 24 complaint filed against its insured in Florida federal court (Mid-Continent Casualty Co. v. Mobley Homes Florida LLC, No. 17-1232, M.D. Fla.).

Insured Says Coverage Owed For Damages Caused By Water Intrusion
SEATTLE - An insured condominium complex is owed coverage for hidden damages caused by water intrusion discovered at a number of its condominium buildings, the insured claims in a May 26 complaint filed in Washington federal court (Milestone Condominium Association v. State Farm Fire and Casualty Co., et al., No. 17-832, W.D. Wash.).

Insured Seeks Finding That Coverage Is Owed For Water Damages
SEATTLE - An insurer owes coverage for hidden damages caused by water intrusion to insured condominiums because the damages occurred during the applicable policy periods and no policy exclusions bar coverage, an insured claims in a May 26 complaint filed in Washington federal court (Edmonds Seacrest Homeowners Association v. State Farm Fire & Casualty Co., No. 17-833, W.D. Wash.).

Insured: Insurer Is Liable Under 'Collapse' Provisions For Hidden Decay Damages
SEATTLE - An insured has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling that an insurer is not liable for damage to apartments from hidden decay under its policies' "collapse" provisions (American Economy Insurance Co. v. CHL, LLC, No. 16-35606, 9th Cir.).

Alabama Federal Judge Says No Coverage Provided For Pollution Incident
MOBILE, Ala. - Because a third-party claimant seeking coverage for an environmental contamination lawsuit failed to prove that the environmental damages were unintended, no coverage is afforded under a policy's subsection that provides coverage for unintended pollution incidents caused by transportation activities, an Alabama federal judge said May 15 (Heartland Catfish Co. Inc., et al. v. Navigators Specialty Insurance Co., No. 15-368, S.D. Ala., 2017 U.S. Dist. LEXIS 73795).

Georgia Federal Judge Says Insurer Has No Duty To Defend Underlying Lead Suit
COLUMBUS, Ga. - In granting an insurer's motion to reconsider, a Georgia federal judge on May 15 determined that based on a recent Georgia Supreme Court opinion, the insurer has no duty to defend or indemnify its insured in an underlying action based on the policy's pollution exclusion (Massachusetts Bay Insurance Co. v. Fort Benning Family Communities LLC, et al., No. 15-75, M.D. Ga., 2017 U.S. Dist. LEXIS 76913).

Appeals Panel Says Policy Limits Were Exhausted, No Further Duty To Defend Exists
LOS ANGELES - The Second District California Court of Appeal on May 18 reversed a trial court's judgment in favor of an insured in a silica coverage case after determining that the insured released its right to assert any bad faith claims against the insurer and after finding that the insurer has no further duty to defend the insured because the insurer's policy limits were exhausted in 2013 (Truck Insurance Exchange v. Moldex Metric Inc., et al., No. B272378, Calif. App., 2nd Dist., 2017 Cal. App. Unpub. LEXIS 3485).

Rapid-American, Insurer Both Denied Judgment On Policy's Limits
NEW YORK - A New York federal bankruptcy judge on May 15 declined to award summary judgment to either Chapter 11 debtor Rapid-American Corp. or one of its insurers in a dispute over whether a policy has a $7 million or $14 million limit for asbestos liability claims, saying the policy is too ambiguous to interpret at this stage (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).

3 Insurers End $1.3M Reinsurance State Court Case Over Asbestos Claims
NEW YORK - Three insurers agreed in an April 7 filing to drop their New York state court lawsuit against their reinsurer over $1.3 million in reinsurance proceeds for an underlying settlement of lawsuits involving asbestos and tainted blood-clotting products (Granite State Insurance Co., et al. v. R&Q Reinsurance Co., No. 654494/2013, N.Y. Sup., New York Co.).

Connecticut Federal Judge Says Questions Of Fact Exist In Water, Ice Damage Suit
BRIDGEPORT, Conn. - A Connecticut federal judge on May 17 partially denied an insurer's motion for summary judgment after determining that questions of fact remain regarding whether damage to a freezer floor is barred by the policy's earth movement exclusion (Thurston Foods Inc. v. Wausau Business Insurance Co., No. 15-14, D. Conn., 2017 U.S. Dist. LEXIS 74935).

Panel Orders FIGA To Pay Actual Repair Costs Up To Combined Statutory Cap
LAKELAND, Fla. - On remand, a trial judge should enter a corrected judgment to show that an insured must contract for repairs within damages awarded by a jury and that the Florida Insurance Guaranty Association (FIGA) is required to pay actual repair costs to the contractors up to the combined statutory cap, a Florida appeals panel ruled May 12 (Maria Pupo v. Florida Insurance Guaranty Association, No. 2D15-3901, Fla. App., 2nd Dist., 2017 Fla. App. LEXIS 6775).

 
 
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.