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Legal News & Headlines

Alabama Law Applies To Contamination Dispute, 9th Circuit Says In Reversing
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Aug. 13 reversed a district court's ruling that California law, rather than Alabama law, applies to an environmental contamination coverage suit because each of the policies at issue clearly mentions Alabama as the place of the performance (Arrow Electronics Inc. v. Aetna Casualty & Surety Co., et al., No. 18-55810, 9th Cir.).

No Coverage Owed Under Insurer's Excess Policies For Contamination Suit, Judge Says
LAKE CHARLES, La. - An excess commercial general liability insurer has no duty to defend or indemnify its insured against an underlying environmental contamination lawsuit because the damages alleged in the underlying suit occurred outside of the insurer's policy periods, a Louisiana federal judge said Aug. 16 in granting the excess insurer's motion for summary judgment (Admiral Insurance Co. v. Zadeck Energy Group Inc., No. 16-912, W.D. La., 2019 U.S. Dist. LEXIS 139334).

No Coverage Owed For Damages Caused By Mold Remediation Work
RENO, Nev. - A Nevada federal judge on Aug. 9 granted summary judgment in favor of a professional liability insurer after determining that no coverage is owed to its insured for damages arising out of its mold remediation work because coverage is clearly precluded under the policy's pollution liability coverage form (Rockhill Insurance Co. v. CSAA Insurance Exchange, et al., No. 17-496, D. Nev., 2019 U.S. Dist. LEXIS 134194).

Insurer Says No Duty To Defend, Indemnify Alleged Misrepresentations Of Defects
SAN ANTONIO - Citing exclusions for "defective work" and "mold," a commercial general liability insurer alleges in an Aug. 12 complaint filed in a Texas federal court that it has no duty to defend or indemnify allegations of misrepresentations in the sale of a home with alleged defects (Mid-Continent Casualty Co. v. Dabney Homes LLC, No. 19-975, W.D. Texas).

Consent Judgment Is Unenforceable Against Umbrella Insurer, Judge Says
KNOXVILLE, Tenn. - A Tennessee federal judge on Aug. 12 granted an umbrella insurer's motion for summary judgment in a carbon monoxide poisoning coverage suit after determining that the insurer had no duty to defend its insured against an underlying suit because the underlying policy was not exhausted (Travis and Jessica Fritz, et al. v. St. Paul Fire and Marine Insurance Co., No. 17-433. E.D. Tenn., 2019 U.S. Dist. LEXIS 135066).

Nonsettling Insurers: Rejection Of Deals With Asbestos Insurers Should Be Upheld
TACOMA, Wash. - Clear Ninth Circuit U.S. Court of Appeals precedent supports a Washington federal judge's reversal of approvals for two settlements between Chapter 11 debtor Fraser's Boiler Service Inc. and several asbestos liability insurers, nonsettling insurers argue in an Aug. 9 brief in the appellate court (Fraser's Boiler Service, Inc. v. Certain Underwriters at Lloyd's, et al, No. 19-35269, 9th Cir.).

Insurers, Former Debtor Agree On Audit Procedures For THAN Trust
WILMINGTON, Del. - A lengthy dispute over the scope of insurers' rights to audit an asbestos trust for evidence of fraud has reached a settlement, according to a letter filed Aug. 12 in Delaware Chancery Court (AIU Insurance Company, et al. v. Philips Electronics North America Corporation, et al., No. 9852, Del. Chanc.).

Insurer Owes Defense For Underlying Environmental Liabilities, Judge Says
DENVER - An insured is entitled to defense and indemnity for underlying environmental contamination liabilities, a Colorado federal judge said Aug. 5; however, the insurers must decide on the proper method of allocation to determine the amount of contribution owed by one of the insurers (Certain Underwriters at Lloyd's, London v. Hartford Accident and Indemnity Co. et al., No. 18-1896, D. Colo., 2019 U.S. Dist. LEXIS 130976).

Insurer Permitted To Intervene In Environmental Contamination Coverage Suit
BOISE, Idaho - An Idaho federal judge on Aug. 2 granted an insurer's motion to intervene in an environmental contamination coverage dispute because none of the parties to the coverage suit adequately represents the interests of the insurer seeking intervention (Huntsman Advanced Materials LLC v. OneBeacon American Insurance Co., No. 08-229, D. Idaho, 2019 U.S. Dist. LEXIS 129846).

Final Judgment Entered Against Insurer In WTC, Asbestos Coverage Dispute
NEW YORK - A New York justice on Aug. 1 dismissed an insurer's complaint and entered final judgment against the insurer based on prior rulings that coverage is owed for underlying asbestos claims arising out of the construction of the original World Trade Center towers and that the policy at issue is not exhausted (American Home Assurance Co. v. The Port Authority of New York and New Jersey, et al., No. 651096/12, N.Y. Sup., 2019 N.Y. Misc. LEXIS 4306).

New York Justice Says Excess Insurers' Interpleader Complaint Must Be Dismissed
NEW YORK - A New York justice on Aug. 1 dismissed an interpleader complaint filed by two excess insurers involved in an asbestos coverage dispute, agreeing with a defendant that the excess insurers failed to state a claim upon which relief could be granted (Fireman's Fund Insurance Co., et al. v. Mary Murphy Clagget, et al., No. 650546/2019, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 4293).

Insurer Says Debtor Policy's 'Non-Cumulation Of Liability Limit' Must Be Enforced
NEW YORK - A provision in a 1970s insurance policy for asbestos liability can only be read to allow an insurer of Chapter 11 debtor Rapid-American Corp. to reduce the policy limits to zero by offsetting a previous settlement amount, the insurer argues in an Aug. 7 reply in support of its summary judgment bid in a New York federal bankruptcy court adversary action (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).

Survivors' Claims Arising Out Of Benzene Exposure Are Not Prescribed, Panel Says
BATON ROUGE, La. - The First Circuit Louisiana Court of Appeal on Aug. 7 reversed a trial court's ruling against Exxon Mobil Corp. and its liability insurer after determining that the survivors of the former Exxon employee who alleged wrongful death claims as a result of the former employee's exposure to benzene timely filed the claims against Exxon and its insurer (Michael Martin Mulkey Sr. v. Century Indemnity Co. et al., No. 2018 CA 1551, La. App., 1st Cir., 2019 La. App. LEXIS 1387).

Questions Of Fact Exist On Collapse Provision In Policy, Judge Says
TOLLAND, Conn. - Questions of fact exist as to whether an insured home's basement walls experienced a sudden falling or caving in as the result of defective concrete used when the foundation walls were built, a Connecticut judge said July 11 in denying the homeowners insurer's motion for summary judgment (Alan J. Gnann, et al. v. United Services Automobile Association, No. CV166010517S , Conn. Super., 2019 Conn. Super. LEXIS 1955).

Questions Of Fact Exist On Cause Of Mold On Insured's Bird Seed Products, Judge Says
SEATTLE - A Washington federal judge on Aug. 2 denied a motion for summary judgment filed by an insurer after determining that questions of fact exist as to the cause of mold that contaminated an insured's bird seed products (Certain Underwriters at Lloyd's, London v. Mills Bros. International Inc. et al., No. 18-1661, W.D. Wash., 2019 U.S. Dist. LEXIS 129598).

3rd Circuit Remands Environmental Suit On Issue Of Policy Exhaustion
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on July 30 remanded a district court's ruling in favor of an excess insurer in an environmental contamination coverage dispute after determining that the lower court must consider whether a primary insurer's payment for claims arising out of one of three landfills applied to all of the landfills and exhausted the primary insurer's limits under a 1982 primary policy (Penn National Insurance Co. v. North River Insurance Co., et al., No. 18-2687, 3rd Cir., 2019 U.S. App. LEXIS 22561).

Ambiguity Exists As To Whether Asbestos Defense Costs Are Covered, Judge Says
ALBANY, N.Y. - A New York federal judge on July 25 denied a reinsurer's motion for partial summary judgment in an asbestos coverage dispute after determining that an ambiguity exists as to whether defense costs paid by an insurer on behalf of an insured are covered under the reinsurance policies at issue (Utica Mutual Insurance Co. v. Clearwater Insurance Co., No. 13-1178, N.D. N.Y., 2019 U.S. Dist. LEXIS 124077).

Judge: Nonparty Insurers Can't Remove Asbestos Cases Against Dissolved Insured
COLUMBIA, S.C. - Nonparty insurers create federal jurisdiction in five asbestos personal injury cases against their dissolved insured simply because the company's receiver changed the case name, a federal judge held July 26 in dismissing the action (Roxanne Falls, et al. v. CBS Corp., et al., Timothy W. Howe, et al. v Air & Liquid Systems Corp., et al., James Michael Hill v. Advance Auto Parts Inc., et al., Denver D. Taylor, et al. v Air & Liquid Systems Corp., et al., No.19-1948, D. S.C., 2019 U.S. Dist. LEXIS 124742).

Panel Reverses Ruling For Insurer, Says Insureds' Mold Coverage Suit Is Not Barred
MIAMI - The Third District Florida Court of Appeal on July 24 reversed a trial court's judgment in favor of an insurer in a mold coverage dispute after determining that a suit filed by a mold testing company against the insurer did not bar the insureds' suit against the insurer (Margarita Brito, et al. v. Heritage Property & Casualty Insurance Co., No. 3D18-1448, Fla. App., 3rd Dist., 2019 Fla. App. LEXIS 11643).

Issues Of Fact Exist In Water, Mold Coverage Suit, Judge Says
BALTIMORE - A homeowners insurer is not entitled to summary judgment on an insured's claims of breach of contract and bad faith because issues of fact exist regarding whether additional coverage is owed for water and mold damages in the insured home, a Maryland federal judge said Aug. 1 (William Jackson v. The Standard Fire Insurance Co., No. 17-1612, D. Md., 2019 U.S. Dist. LEXIS 129884).

Flood Damage To Other Property Is An 'Occurrence' Under Policy, Panel Says
HARRISBURG, Pa. - Because there was alleged damage to other property, not property that an insured contracted to provide, and that damage was caused by an accident, a flood, there are claims for property damage caused by an "occurrence," a panel of the Pennsylvania Superior Court held July 22, reversing the entry of judgment that a commercial general liability insurer has no duty to defend or indemnify (Pennsylvania Manufacturers Indemnity Co. v. Pottstown Industrial Complex LP, et al., No. 3489 EDA 2018, Pa. Super., 2019 Pa. Super. LEXIS 729).

Insureds' Property Damage Claims In Amended Petition Barred By Limitations Period
FORT WORTH, Texas - The Second District Texas Court of Appeals on July 30 determined that insureds' claims seeking coverage for storm damages to their home are time-barred because the claims in the insureds' third-amended complaint did not relate back to claims in the insureds' previously filed complaints and were filed after the two-year limitations period (Richard Seim, et al. v. Allstate Texas Lloyds, et al., No. 02-16-00050, Texas App., 2nd Dist., 2019 Tex. App. LEXIS 6557).

Panel Reverses Ruling As To Faulty Workmanship Exclusion, Statutory Bad Faith
DENVER - The 10th Circuit U.S. Court of Appeals on July 24 reversed and remanded a lower court's finding that a professional liability insurance policy's faulty workmanship exclusion precluded coverage for a lawsuit alleging that the insured poorly designed and constructed a fisheries enhancement project and the court's grant of summary judgment on the insured's claim of statutory bad faith but affirmed the dismissal of the insured's common-law bad faith claim (Rockhill Insurance Company v. CFI-Global Fisheries Management, et al., Nos. 18-1201 & No. 18-1207, 10th Cir., 2019 U.S. App. LEXIS 22049).

11th Circuit Reverses Ruling, Says Insured Failed To Meet Policy Deductible
ATLANTA - The 11th Circuit U.S. Court of Appeals on July 19 reversed and remanded a district court's ruling in favor of an insured in an environmental contamination dispute after determining that the lower court erred in finding that the policy's tenants and neighbors provision should be construed in favor of coverage and that the $2 million policy deductible was met by the insured (Ace American Insurance Co. v. The Wattles Co., No. 17-15392, 11th Cir., 2019 U.S. App. LEXIS 21540).

Massachusetts Justice Denies Reinsurers' Motion To Compel Discovery
SUFFOLK, Mass. - A Massachusetts justice on June 19 denied a motion to compel filed by reinsurers in an environmental contamination coverage dispute after determining that the reinsurers failed to prove that discovery regarding an insurer's declaratory judgment action against an insured is relevant to whether coverage exists for a settlement between the insurer and the insured (Lamorak Insurance Co. v. Certain Underwriters at Lloyd's, London, No. 1884CV00200-BLS2, Mass. Super., Suffolk, 2019 Mass. Super. LEXIS 385).

Excess Policy's Pollution Exclusion Does Not Bar Coverage For Oil Spill
LAKE CHARLES, La. - An excess insurer's pollution exclusion cannot be applied as a bar to coverage for an oil spill because the excess policy follows form to an underlying policy that does not include a pollution exclusion, a Louisiana federal judge said July 16 (Central Crude Inc. v. Liberty Mutual Insurance Co., et al., No. 17-308, W.D. La., 2019 U.S. Dist. LEXIS 118352).

Insurer Did Not Waive Right To Enforce Dispute Resolution Provision In Agreement
OTTAWA, Ill. - An insurer did not waive its right to enforce a dispute resolution provision contained in a 1999 settlement agreement in response to its insured's suit seeking a finding that the insurer must indemnify it for underlying personal injury claims stemming from exposure to welding fumes, the Third District Illinois Appellate Court said July 2 (Caterpillar Inc. v. Century Indemnity Co., et al., No. 3-19-0032, Ill. App., 3rd Dist., 2019 Ill. App. LEXIS 560).

Federal Judge Denies Insured's Motion To Dismiss Asbestos Coverage Suit
GREENSBORO, N.C. - A North Carolina federal judge on July 16 denied an insured's motion to dismiss an insurer's suit seeking a declaration regarding its coverage obligations for underlying asbestos personal injury suits, rejecting the insured's argument that the insurer failed to name all necessary and indispensable parties as defendants (Zurich American Insurance Co. v. Covil Corp., et al., No. 18-932, M.D. N.C., 2019 U.S. Dist. LEXIS 117738).

Fraser's Insurer Appeals Negative Ruling In Row Over Contribution Claims
TACOMA, Wash. - An insurer of Chapter 11 asbestos debtor Fraser's Boiler Service Inc. on July 17 appealed to federal district court a bankruptcy court's denial of its bid to vacate a stipulated order it entered into with the debtor's settling insurers so it can continue to pursue state court contribution and breach of contract claims against the settling insurers (National Union Fire Insurance Company of Pittsburgh, PA v. Fraser's Boiler Service, Inc., et al., No. 3:19-cv-5648, W.D. Wash.).

Fraser's Asbestos Claimants Get Relief To Pursue Recovery Against Insurance Carriers
TACOMA, Wash. - A Washington federal bankruptcy judge on July 3 granted asbestos claimants of Chapter 11 debtor Fraser's Boiler Service Inc. relief from the automatic stay so they can continue their lawsuits seeking damages only from the company's insurers (In re: Fraser's Boiler Service, Inc., No. 18-41245, W.D. Wash. Bkcy.).

Issue Of Fact Exists On Cause Of Water Damage In Insured Home, Panel Says
SANTA ANA, Calif. - The Fourth District California Court of Appeal on July 22 affirmed a trial court's ruling that an issue of fact exists regarding whether coverage should be afforded for a water damage claim filed by insureds after the sale of their home because the insureds offered extrinsic evidence that the water damage may not have been caused by an intentional act (Robert Berry, et al. v. State Farm General Insurance Co., No. G055740, Calif. App., 4th Dist., Div. 3, 2019 Cal. App. Unpub. LEXIS 4852).

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.