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Legal News & Headlines

Settlement Agreement Included 2 Insurers' Policies, Federal Judge Says
SEATTLE - A Washington federal judge on June 11 granted a motion for summary judgment filed by two insurers in an environmental contamination allocation proceeding after determining that a 1997 settlement agreement and release clearly included the policies issued to the insured and released the insurers from liability (King County v. Travelers Indemnity Co., et al., No. 14-1957, W.D. Wash., 2018 U.S. Dist. LEXIS 97868).

Ruling In Favor Of Insured In Environmental Suit Is Not Appealable, Judge Says
NEW YORK - A New York federal judge on June 7 clarified that a prior ruling that an excess insurer owes its insured more than $55 million for environmental contamination costs incurred by the insured is not a final and appealable judgment (Olin Corp. v. Lamorak Insurance Co., et al., No. 84-1968, S.D. N.Y.).

Insurer Says Coverage For Asbestos Exposure Barred By Pollution Exclusions
ST. LOUIS - No coverage is afforded for the settlement of an underlying asbestos exposure suit because the policies' pollution exclusions bar coverage and the allocation of the underlying settlement does not exceed the policies' deductibles, an insurer argues in a June 11 motion for summary judgment filed in Missouri federal court (Zurich American Insurance Co. v. Insurance Company of North America, No. 14-1112, E.D. Mo.).

Maryland Casualty Says Latest Insurer Liability Action Should Get The Boot
WILMINGTON, Del. - A recent lawsuit in a string of actions seeking to hold insurers of former Chapter 11 debtor W.R. Grace & Co. liable for claimants' asbestos diseases should be dismissed because a Delaware federal bankruptcy judge has already found that the claims are barred by the protections afforded the insurers in W.R. Grace's reorganization, one insurer argues in a June 15 filing (Barbara Hunt, et al. v. Maryland Casualty Company, No. 18-50402, D. Del. Bkcy.).

Insurer's Lead Coverage Suit Permitted To Proceed; Motion To Stay Denied
SAN FRANCISCO - A stay of an insurer's suit seeking a declaration regarding its duty to defend an insured in an underlying lead exposure suit is not warranted because the insurer's coverage suit does not present the same issues as the underlying lead exposure suit and the insured will not be prejudiced if the insurer's suit proceeds, a California federal judge said June 18 in denying the insured's motion to stay (James River Insurance Co. v. W.A. Rose Construction, et al., No. 18-2030, N.D. Calif., 2018 U.S. Dist. LEXIS 101698).

Insureds Validly Assigned Rights Under Policies To Water Restoration Company
PHOENIX - Insureds whose homes sustained water damages validly assigned their rights under their homeowners policies to a water restoration company to collect payment for the remediation work, an Arizona appellate court said June 12 in rejecting the insurer's argument that the assignments were not valid (Farmers Insurance Exchange v. The Honorable David Udall, et al., No. 18-0081, Ariz. App., Div. 1, 2018 Ariz. App. LEXIS 94).

Judge Certifies Question On Collapse In Insureds' Breach Of Contract Suit
HARTFORD, Conn. - In a breach of contract dispute over coverage for cracking in a basement, a Connecticut federal judge certified on June 15 a question to the state's high court on what constitutes "substantial impairment of structural integrity" for purposes of applying a collapse provision in a homeowners insurance policy (Steven L. Vera, et al. v. Liberty Mutual Fire Insurance Co., No. 16-72, D. Conn., 2018 U.S. Dist. LEXIS 100548).

Insurers Ask U.S. High Court Question In Dispute Over Faulty Workmanship
WASHINGTON, D.C. - Insurers petitioned the U.S. Supreme Court on June 6 to answer a question in a dispute in which a federal appellate court predicted how a state high court would rule over whether a subcontractor's faulty work that caused damage to an insured's own work can constitute an "occurrence" (Aspen Insurance [UK] Ltd, et al. v. Black & Veatch Corp., No. 17-1662, U.S. Sup., 2018 U.S. S. Ct. Briefs LEXIS 2279).

Parties Ordered To Outline Remaining Issues In Amtrak Contamination Cleanup Suit
BROOKLYN, N.Y. - A New York federal judge on June 1 ordered Amtrak and its insurers to submit a joint letter to the court outlining all issues that need to be resolved before a judgment can be issued in stage one of the environmental contamination dispute (Certain Underwriters at Lloyd's, et al. v. National Railroad Passenger Corp., et al., No. 14-4717, E.D. N.Y., 2018 U.S. Dist. LEXIS 92150).

Federal Magistrate Judge Recommends Granting Motion On Insurance Law Claims
BUFFALO, N.Y. - A New York federal magistrate judge on May 30 recommended that plaintiffs' motions for summary judgment in an asbestos coverage dispute be granted on claims asserted under New York's Insurance Law because the plaintiffs' settlement agreements with the insured do not preclude the plaintiffs' from asserting claims under Section 3420 of the law (Edna K. Mineweaser, et al. v. OneBeacon America Insurance Co., et al., Nos. 14-585, 14-1093, 15-177, 16-89, W.D. N.Y.; 2018 U.S. Dist. LEXIS 91203).

Reinsurer, Insurer File Trial Briefs In $3.2M Asbestos Claims Dispute
SYRACUSE, N.Y. - A reinsurer and an insurer filed trial briefs June 5 with a New York federal court 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.).

Representation, Standing Debated In Bid To Hold Johns-Manville Broker Liable
NEW YORK - The future claimants' representative (FCR) in the landmark bankruptcy case of Johns-Manville Corp. did not represent an asbestos claimants' in personam claims against the company's insurance broker, so the broker can be held independently liable for asbestos personal injury claims, a claimant's law firm says June 8 on appeal in New York federal court (The Bogdan Law Firm v. Marsh USA, Inc., No. 1:18-cv-01228, S.D. N.Y.).

Diversity Of Citizenship Does Not Exist; Water, Mold Coverage Suit Dismissed
WHITE PLAINS, N.Y. - A New York federal judge on June 11 dismissed an insured's suit seeking coverage for water and mold damages following a sewage backup after determining that subject matter jurisdiction does not exist because both the insured and insurer are citizens of New York (Alexandra Tran, et al. v. Farmers Group Inc., et al., No. 17-3907, S.D. N.Y., 2018 U.S. Dist. LEXIS 97717).

Water Back-Up Endorsement Applies; Insurer Only Owes Limited Coverage, Judge Says
CHARLOTTE, N.C. - A North Carolina federal judge on June 6 granted an insurer's motion for summary judgment in a water damage coverage suit after determining that the policy's endorsement for water and sewage backup clearly limits coverage to $10,000 (Nancy Troutman, et al. v. QBE Insurance Corp., No. 17-464, W.D. N.C., 2018 U.S. Dist. LEXIS 96115).

Texas High Court Declines To Hear Case Over Insurer's Judgment For Water Damage
AUSTIN, Texas - The Texas Supreme Court on June 1 refused to rehear its denial of a petition to review a lower court's reversal of an insurer's take-nothing judgment in a homeowners' action seeking coverage for damages to their home's foundation and in directing a verdict on their breach of contract claim (State Farm Lloyds v. Charles R. Allen, et al., No. 17-0912, Texas Sup.).

Bad Faith Claim Dismissed; Coverage Denial For Cracking Walls Was Fairly Debatable
BRIDGEPORT, Conn. - A Connecticut federal judge on June 6 dismissed claims alleging bad faith and violations of Connecticut's Unfair Trade Practices Act and Unfair Insurance Practices Act alleged against a homeowners insurer because the insurer's coverage denial was fairly debatable; however, the judge refused to dismiss the breach of contract claim against an insurer after determining that there is a possibility that coverage exists under policies issued before 2006 for cracking in the insureds' basement walls as a result of a chemical reaction (Stephen Rosenberger, et al. v. Amica Mutual Insurance Co., No. 17-612, D. Conn., 2018 U.S. Dist. LEXIS 95345).

Impaired Property Exclusion Does Not Bar Coverage For Damage To Contents
STAMFORD, Conn. - A policy's impaired property exclusion does not apply to bar damage to the contents of a restaurant following the collapse of a roof because the contents of the restaurant cannot be restored by repairing the building, a Connecticut Superior Court judge said May 22 (Seneca Insurance Co. Inc., v. Q Sono II LLC, No. FSTCV156024973, Conn. Super., 2018 Conn. Super. LEXIS 1005).

Insurers Have No Duty To Defend Insured Against Contamination Proceedings
LOS ANGELES - A California federal judge on May 22 entered judgment in favor of two insurers in an environmental contamination coverage suit after finding that no duty to defend or indemnify an insured exists because an administrative proceeding filed against the insured by the Alabama Department of Environmental Management (ADEM) was not a suit per the terms of the policies at issue (Arrow Electronics Inc. v. Aetna Casualty & Surety Co., et al., No. 17-5247, C.D. Calif., 2018 U.S. Dist. LEXIS 88014).

Texas High Court To Review Ruling In Gulf Oil Spill Coverage Dispute
AUSTIN, Texas - The Texas high court on June 1 granted an insured's petition for review to determine if an exception to a policy's joint venture provision applies to provide coverage to 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.).

Delaware Judge Refuses To Set Judgment Against Excess Insurers In Asbestos Suit
WILMINGTON, Del. - A Delaware state judge on May 23 denied an insured's motion to set a judgment amount against its excess insurers in an asbestos coverage dispute and award prejudgment interest under New York law because the insured sought only a declaratory judgment of its coverage rights and did not seek breach of contract damages, which are necessary for the court to award prejudgment interest (Viking Pump Inc. et al., v. Century Indemnity Co. et al., No. N10C-06-141, Del. Sup., New Castle Co., 2018 Del. Super. LEXIS 220).

Kaiser Gypsum Directed To Assume Insurers' Asbestos Coverage Agreement
CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge on May 29 ordered Chapter 11 debtor Kaiser Gypsum Co. to assume a settlement agreement among the debtor's insurers for payment of asbestos claims, saying the assumption is conditioned on approval of Kaiser's plan to send stayed asbestos claims back to the tort system (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

Judge Refuses To Reconsider Denial Of Summary Judgment Motion In Reinsurance Case
SYRACUSE, N.Y. - In a dispute over whether a reinsurer is obligated to pay an insurer's defense expenses arising from a $3.2 million asbestos claims settlement, a New York federal judge on May 23 declined to reconsider an earlier finding of ambiguity in the reinsurance certificate provisions (Utica Mutual Insurance Co. v. Munich Reinsurance America Inc., Nos. 12-00196 & 13-00743, N.D. N.Y.).

Bankruptcy Judge Denies Dismissal Bids In Asbestos Claimants' Insurance Fraud Suit
CHICAGO - Requests by Oakfabco Inc. insurers and a claims management company to dismiss fraud allegations leveled in an adversary case by Oakfabco's Asbestos Claimants' Committee failed May 15 when an Illinois bankruptcy judge found that the committee's claims are pleaded sufficiently enough to withstand a motion to dismiss (Asbestos Claimants Committee v. American Casualty Company of Reading, PA, et al., No. 18-00002, N.D. Ill. Bkcy., 2018 Bankr. LEXIS 1461).

Insurer Owes No Additional Coverage For Mold Damage, Federal Judge Determines
CAMDEN, N.J. - An insurer did not breach its contract or act in bad faith when it limited its payment for mold damage within an insured home because the policy at issue included a provision limiting coverage for mold damage, a New Jersey federal judge said May 23 (Charles Hobbs, et al. v. US Coastal Insurance Co., No. 17-3673, D. N.J., 2018 U.S. Dist. LEXIS 86484).

Federal Judge Refuses To Reconsider Coverage Ruling In Water, Mold Damages Suit
SEATTLE - A Washington federal judge on May 30 denied an insurer's motion for reconsideration in a water damage and mold coverage suit after determining that alleged misstatements regarding the insurer's participation in the investigation of the damages are not material to the court's ultimate finding that coverage is owed under the policy (Market Place North Condominium Association v. Affiliated FM Insurance Co., No. 17-625, W.D. Wash., 2018 U.S. Dist. LEXIS 90113).

Insurer's Denial Of Coverage Under Exclusion Was Not In Bad Faith, Judge Rules
SCRANTON, Pa. - A water exclusion in a homeowners insurance policy is unambiguous and precluded coverage for damages caused when sewage backed up into an insured's basement; as a result, an insurer did not act in bad faith in denying coverage, a federal judge in Pennsylvania ruled May 21 in granting the insurer's motion for summary judgment (Audrey Sanko v. Allstate Insurance Co., No. 16-1620, M.D. Pa., 2018 U.S. Dist. LEXIS 84943).

Panel Says Expert's Testimony In Stucco, Water Damage Suit Should Not Be Barred
TRENTON, N.J. - The New Jersey Superior Court Appellate Division on May 25 reversed a trial court's ruling barring a portion of an expert witness's testimony in a defective stucco and water damage coverage suit after determining that the trial court precluded testimony about the damage to a number of homes that the witness should not be prohibited from providing (Bob Meyer Communities Inc., v. Ohio Casualty Insurance Co. et al., No. A-2171-17T2, N.J. Super., App. Div., 2018 N.J. Super. Unpub. LEXIS 1227).

Pollution Exclusion Bars Coverage For Noxious Fumes, Odors, Judge Says
COLUMBUS, Ga. - An insurer has no duty to defend its insured against an underlying suit alleging damages as a result of odors emanating from an insured's holding pond because the policy's pollution exclusion clearly bars coverage for the underlying suit, a Georgia federal judge said May 16 (Recyc Systems Southeast LLC v. Farmland Mutual Insurance Co., No. 17-225, M.D. Ga., 2018 U.S. Dist. LEXIS 82248).

Insurer Says Policy Should Be Reformed To Include Intended Pollution Exclusion
ATLANTA - The 11th Circuit U.S. Court of Appeals should reverse a district court's ruling in an environmental contamination dispute because the insurer should be permitted to reform the policy as the evidence supports the insurer's contention that the parties intended the policy to include a pollution exclusion, the insurer argues in an April 8 reply brief (ACE American Insurance Co. v. Exide Technologies Inc., et al., No. 17-15392, 11th Cir.).

New York Panel Reinstates Claims Against Insurer, Oil Remediation Company
BROOKLYN, N.Y. - The Second Department New York Supreme Court Appellate Division on May 16 reinstated claims of gross negligence and punitive damages against an insurer and a remediation company after determining that the insureds sufficiently stated facts to support the claims (Richard Bennett, et al. v. State Farm Fire and Casualty Co., et al., Nos. 10385/13, 385/14, 602582/14, N.Y. Sup., App. Div., 2nd Dept., 2018 N.Y. App. Div. LEXIS 3482).

Policies Must Be Construed As Primary Policies In Asbestos Exposure Coverage Suit
ELGIN, Ill. - The First District Illinois Appellate Court on May 15 affirmed a trial court's finding that insurance policies issued between 1977 and 1985 to an insured who is seeking coverage for an asbestos exposure claim are primary policies with self-insured retentions and cannot be considered excess policies as the insurer contended (Lamorak Insurance Co. v. Kone Inc., No. 1-16-3398, Ill. App., 1st Dist., 2nd Div., 2018 Ill. App. LEXIS 279).

Reinsurers Seek To Dismiss Breach Of Contract Case Over Asbestos Claims
BRIDGEPORT, Conn. - Two reinsurers on May 4 moved to dismiss a breach of contract lawsuit arising out of the settlement of asbestos claims because a Connecticut federal court lacks personal jurisdiction as the contracts were formed and performed outside of the state (Travelers Casualty and Surety Co. v. Nationwide Mutual Insurance Co., et al., No. 18-00088, D. Conn.).

2 Kaiser Gypsum Insurers See No Reason For Chapter 11 Case To Continue
CHARLOTTE, N.C. - Two insurers of Chapter 11 debtor Kaiser Gypsum Co. have had enough, filing their second motion May 7 in North Carolina federal bankruptcy court to dismiss the case, accusing the company and its primary insurer of using the bankruptcy forum to better their own interests to the detriment of asbestos disease sufferers (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

Panel Affirms Judgment In Favor Of Insurer In Water Damage Dispute
AMARILLO, Texas - The Seventh District Texas Court of Appeals on May 14 affirmed a trial court's ruling in favor of an insurer after determining that the trial court did not err in concluding that the insurer did not breach its contract or act in bad faith in its handling of the insured's claim for water damage (Mahmoud Abdalla v. Farmers Insurance Exchange, No. 07-17-00020, Texas App., 7th Dist., 2018 Tex. App. LEXIS 3358).

N.Y. State Justice Dismisses Insureds' Suit Seeking Coverage For Garage Collapse
MINEOLA, N.Y. - A New York state justice on May 16 dismissed a suit filed by insureds in a dispute over coverage for the collapse of their garage after determining that the insureds failed to prove that the insurer breached its contract, acted in bad faith or committed fraud in its handling of the claim (John A. Petrilli, et al. v. Adirondack Insurance Exchange, et. al., No. 600128/18, N.Y. Sup., Nassau Co.).

 
 
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with all the facts and circumstances of a particular, specific case and the relevant law.