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Legal News & Headlines

Pollution Exclusion Bars Coverage For Welding Fume Exposure Suit, Panel Says
ATLANTA - A pollution exclusion clearly bars coverage for an underlying suit arising out of welding fume exposure because welding fumes clearly qualify as an irritant or contaminant under the exclusion, the 11th Circuit U.S. Court of Appeals said Feb. 8 (Evanston Insurance Co. v. Sandersville Railroad Co., No. 17-14487, 11th Cir., 2019 U.S. App. LEXIS 3906).

Arbitration Of Environmental Coverage Dispute Is Appropriate, Judge Says
NEWARK, N.J. - A New Jersey federal judge on Feb. 6 granted a motion to compel arbitration in an environmental contamination coverage dispute after determining that arbitration is appropriate because the dispute involves international commercial agreements and the policies at issue included a valid arbitration provision (Cornell-Dubilier Electronics, Inc. v. Allianz Versicherungs Ag, et al., No. 18-15947, D. N.J., 2019 U.S. Dist. LEXIS 19045).

No Coverage Owed For Claims Arising Out Of Gas Pipeline Explosion
NEW ORLEANS - An insured contractor working on a Louisiana natural gas pipeline and its insurer have no duty to defend or indemnify a third party for underlying personal injury claims arising out of a pipeline explosion because Louisiana's Anti-Indemnity Act bars the indemnity and insurance provisions included in the master service agreement (MSA) between the insured and the third party, a Louisiana federal judge said Feb. 5 (Atlantic Specialty Insurance Co., et al. v. Phillips 66 Co., No. 17-9318, E.D. La., 2019 U.S. Dist. LEXIS 18224).

Judge Denies Insurer's Judgment Motion Based On Wrap-Up Exclusion
OAKLAND, Calif. - Because a subcontractor was not enrolled in a general contractor's wrap-up policy, a California federal judge on Feb. 7 denied summary judgment to the subcontractor's insurer on its duty to defend or indemnify the subcontractor against the contractor's breach of contract claims concerning water damage to a project (Employers Mutual Casualty Co. v. Fast Wrap Reno One LLC, et al., No. 17-03837, N.D. Calif., 2019 U.S. Dist. LEXIS 20298).

Federal Magistrate Judge Dismisses Fraud, Bad Faith Claims In Water Damage Dispute
CHICAGO - An Illinois federal magistrate judge on Feb. 7 dismissed claims alleging fraud, misrepresentation and bad faith against an insurer after determining that the insured, seeking coverage for water damages caused by burst pipes, failed to allege sufficient facts in support of the claims (Propitious LLC, et al. v. Badger Mutual Insurance Co., et al., No. 18-1405, N.D. Ill., 2019 U.S. Dist. LEXIS 19582).

Insurer Removes Water Damage Coverage Dispute To Florida Federal Court
MIAMI - In a Feb. 11 notice of removal, an insurer maintains that a Florida federal court has jurisdiction to decide a water damage coverage dispute because the insured's complaint, seeking more than $80,000 in additional damages, exceeds the federal jurisdictional amount in controversy requirement (Sushi Garage LLC v. Greenwich Insurance Co., No. 19-20548, S.D. Fla.).

Panel Majority Affirms Judgment In Coverage Dispute Over Contaminated Heparin
RICHMOND, Va. - The majority of the Fourth Circuit U.S. Court of Appeal on Feb. 6 determined that a district court did not err in entering judgment in favor of insureds in a dispute over coverage for underlying product liability lawsuits involving contaminated heparin because the policies at issue clearly provided coverage for the underlying suits (Charter Oak Fire Insurance v. American Capital, 17-2015 and 17-2068, 4th Cir., 2019 U.S. App. LEXIS 3687).

Mississippi High Court Says Voluntary Payment Cannot Be Recovered By Insurer
JACKSON, Miss. - Answering a certified question from the Fifth Circuit U.S. Court of Appeals, the Mississippi Supreme Court on Jan. 31 determined that Mississippi's voluntary payment doctrine bars an insurer from recovering a settlement payment made on behalf of an additional insured that the insurer believed was not covered under the policy because the payment was not made under compulsion (Colony Insurance Co. v. First Specialty Insurance Corp., No. 2018-FC-00574, Miss. Sup., 2019 Miss. LEXIS 52).

Insurer's Suit Arising Out Of Bat Contamination Claim Must Be Dismissed, Judge Says
DETROIT - An insurer's suit seeking a declaration that it owes no coverage for contamination caused by an infestation of bats in a home insured under a landlord's policy must be dismissed because a coverage determination cannot be made until the underlying suit is resolved, a Michigan federal judge said Jan. 29 (Allstate Indemnity Co. v. Pamela Ross, et al., No. 18-12563, E.D. Mich., 2019 U.S. Dist. LEXIS 14160).

Insurer Is Entitled To Recover More Than $1M From Co-Insurer, Panel Affirms
NEW YORK - The Second Circuit U.S. Court of Appeals on Feb. 1 affirmed a district court's ruling that a commercial general liability insurer is entitled to recover more than $1 million from a co-insurer for defending a mutual insured dairy company in underlying milk contamination lawsuits because the co-insurer failed to prove that it was prejudiced by any late notice (Harleysville Worcester Insurance Company v. Wesco Insurance Company, No. 18-1300, 2nd Cir., 2019 U.S. App. LEXIS 3349).

Carrier Prejudiced By Late Notice Of Water Damage Claim, Federal Judge Says
DETROIT - An insurer was materially prejudiced by an insured's late notice of a claim for water damage caused by burst water pipes because the insurer was not able to view the damage to the home as a result of the homeowner's decision not to provide notice of the claim until after demolishing and repairing the damage, a Michigan federal judge said Feb 4 in granting the insurer's motion for summary judgment (Timika Keathley v. Grange Insurance Company of Michigan, No. 15-11888, E.D. Mich., 2019 U.S. Dist. LEXIS 17599).

Pennsylvania Federal Judge: Insurer Owes Defense For Products-Related Tort Claims
PHILADELPHIA - An insurer has a duty to defend two construction defect actions because there are sufficient allegations of products-related tort claims such that there may have been an "occurrence," a Pennsylvania federal judge ruled Jan. 30 (Nautilus Insurance Co. v. 200 Christian Street Partners LLC, et al., Nos. 18-1364 & 18-1545, E.D. Pa., 2019 U.S. Dist. LEXIS 15060).

Claim For Extracontractual Damages In Collapse Coverage Suit Dismissed
UTICA, N.Y. - An insured's claim for consequential and extracontractual damages must be dismissed because the insured failed to show that the insurer's actions in its handling of a claim for a collapsed building amounted to bad faith, which is necessary to justify a claim for consequential and extracontractual damages, a New York federal judge said Jan. 30 (Russell Bryant v. General Casualty Company of Wisconsin, No. 18-562, N.D. N.Y., 2019 U.S. Dist. LEXIS 14369).

Texas High Court Conditionally Grants Relief To Insurer In Dispute With Law Firm
AUSTIN, Texas - The Texas Supreme Court on Jan. 25 held that a lower court erred when it denied a commercial general liability insurer's motion to dismiss a law firm's declaratory judgment lawsuit, conditionally granting mandamus relief to the insurer (In Re Houston Specialty Insurance Company, No. 17-1060, Texas Sup., 2019 Tex. LEXIS 50).

Texas High Court Says Joint Venture Provision Does Not Limit Excess Coverage
AUSTIN, Texas - The Texas high court on Jan. 25 reversed an appeals court's ruling that an exception to a policy's joint venture provision limits coverage after determining that the provision does not limit excess coverage for defense costs incurred by an insured seeking coverage for damages incurred as a result of the Deepwater Horizon oil spill in the Gulf of Mexico (Anadarko Petroleum Corp., et al. v. Houston Casualty Co., et al., No. 16-1013, Texas Sup., 2019 Tex. LEXIS 53).

Wisconsin High Court Majority Says Costs Must Be Allocated Between 2 Insurers
MADISON, Wis. - The Wisconsin Supreme Court majority on Jan. 25 determined that a pollution liability insurer breached its duty to defend an additional insured for underlying property damage claims arising out of a sewage backup and said that the additional insured's defense costs, which were paid by another insurer, must be allocated on a pro rata basis between the two insurers (Steadfast Insurance Co. v. Greenwich Insurance Co., No. 2016AP1631, Wis. Sup., 2019 Wisc. LEXIS 9).

Insurer Responsible For Lead-Paint Coverage Only During Its Time On The Risk
BALTIMORE - An excess insurer is responsible for coverage of damages related to underlying lead-paint injuries only during its time on the risk, a Maryland federal judge said Jan. 18 in granting the excess insurer's motion for summary judgment (Allstate Insurance Co. v. Shakia Blue, et al., No. 18-1199, D. Md., 2019 U.S. Dist. LEXIS 9481).

Insured Urges N.J. Federal Court To Deny Arbitration Of Environmental Claim
NEWARK, N.J. - An insured argues in a Jan. 16 sur-reply to a motion to compel arbitration in a dispute concerning coverage for a $367 million environmental contamination settlement that arbitration is not warranted because all of the named defendant insurers implicated in the dispute, pending in New Jersey federal court, have not requested arbitration (Cornell-Dubilier Electronics, Inc. v. Allianz Versicherungs Ag, et al., No. 18-15947, D. N.J.).

Court Erred Dismissing Suit For Lack Of Jurisdiction, Fracking Company Says
NEW ORLEANS - A company that conducted fracking operations on an insured's facility has asked the Fifth Circuit U.S. Court of Appeals to reverse a lower court's dismissal of its allegations that a site pollution legal liability insurer committed breach of contract by seeking indemnity for the $12 million the insurer paid to the insured for environmental damage caused by a June 2014 explosion (Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir.).

Texas Panel Affirms Ruling In Insurer's Favor In Dispute Over Hailstorm Damage
EL PASO, Texas - A Texas appeals panel on Jan. 18 affirmed a lower court's ruling in favor of a homeowners insurer in an insured's breach of contract and bad faith lawsuit arising from hailstorm damage (Louis Hinojos v. State Farm Lloyds, et al., No. 08-16-00121, Texas App., 8th Dist., 2019 Tex. App. LEXIS 365).

Insurer Argues It Has No Duty To Defend Defect Case Against Builder
TAMPA, Fla. - An insurer on Jan. 7 sued a home builder and the owners of the property in a Florida federal court, seeking a declaration that it has no duty to defend or indemnify them in relation to an underlying lawsuit in which the owners allege the property contains defects (Southern-Owners Insurance Co. v. Russ Building Concepts, et al., No. 19-00042, M.D. Fla.).

Policies Will Be Construed Under New York And Connecticut Law, Judge Says
LAFAYETTE, Ind. - New York and Connecticut law will be applied to an insured's policies implicated in an environmental liability coverage dispute because the insured was headquartered in both states and the majority of the evidence indicates that the policies at issue were contracted in New York, an Indiana federal magistrate judge said Jan. 15 in granting an insurer's motion for partial summary judgment (Landis+Gyr, et al. v. Zurich American Insurance Co., No. 16-82, N.D. Ind., 2019 U.S. Dist. LEXIS 6964).

No Coverage For Costs Incurred To Repair Sewer System, Judge Says
SHREVEPORT, La. - A Louisiana federal judge on Dec. 28 dismissed an insured's claims arising out of damages caused by a collapsed sewer manhole after determining that no coverage exists because the costs incurred by the insured to fix the sewer system were not costs that the insured was legally obligated to pay (Eagle Water LLC v. Arch Insurance Co., et al., No. 17-250, W.D. La., 2018 U.S. Dist. LEXIS 217682).

Policy Excludes Coverage For Black Lung Disease Claim, Panel Affirms
DENVER - No coverage is provided to the former president of a coal company for an underlying black lung disease claim filed by a former coal miner because the insurer did not implicitly or explicitly agree to cover the company president under the applicable policy, the 10th Circuit U.S. Court of Appeals said Jan. 14 (Liberty Mutual Fire Insurance Co. v. The Clemens Coal Co., et al., No. 17-3249, 10th Cir., 2019 U.S. App. LEXIS 1149).

Insured Says Georgia High Court Should Deny Review In Asbestos Suit
ATLANTA - The Georgia Supreme Court should deny an insurer's petition for writ of certiorari because the Georgia Court of Appeals correctly found that defense costs incurred as a result of underlying asbestos claims filed against the insured do not erode the policy limits of two of the insurer's policies, the insured says in a Dec. 21 response to the insurer's petition (National Union Fire Insurance Company of Pittsburgh, Pa., et al. v. Scapa Dryer Fabrics Inc., et al., No. BC290354, Ga. Sup., 2018 GA S. Ct. Briefs LEXIS 777).

On Remand, Insurers Seek Affirmance Of Bankruptcy Injunction Protection
WILMINGTON, Del. - Because insurers' asbestos policies with former Chapter 11 debtor W.R. Grace & Co. are "legally relevant" to state court tort claims filed against the insurers under the U.S. Bankruptcy Code, the insurers are protected from the claims by a bankruptcy injunction, they assert in a Dec. 21 brief on remand in Delaware federal bankruptcy court (Continental Casualty Co., et al. v. Jeremy B. Carr, et al., No. 15-50766, D. Del. Bkcy.).

Insureds File Notice Of Appeal In Suit Seeking Coverage For Cracking Walls
ROCKVILLE, Conn. - Insureds seeking coverage for the cracking of their home's foundation walls filed a notice of appeal on Jan. 3 to the Connecticut Appellate Court following a Connecticut state judge's finding that no coverage is afforded for the cracking foundation walls because there was no abrupt collapse of the home's walls, as required by two of the applicable policies, and because the loss was caused by cracking, an excluded cause of loss under another of the policies (Michael Willenborg, et al. v. Unitrin Preferred Ins. Co., et al., No. 166010936S, Conn. Super.).

Court Committed 'Legal Error' In Building Collapse Coverage Case, Insureds Say
ATLANTA - Two insureds are asking the 11th Circuit U.S. Court of Appeals to reverse a lower court's ruling and find that their rot coverage claim was wrongly dismissed because the defendants did not move for its dismissal. They also contend that the lower court committed "legal error" by denying their motion for reconsideration (The S.O. Beach Corp., et al. v. Great American Insurance Company of New York, No. 18-11967, 11th Cir.).

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.