Mealey's Catastrophic Loss : Mealey's : Legal News & Analysis

Mealey's Catastrophic Loss

June 03, 2024
Bad Faith, Unfair Practices Claims Properly Dismissed In Hurricane Coverage Suit

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on May 31 affirmed a district court’s dismissal of claims alleging bad faith and violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) against a homeowners insurer because the district court properly found that the insured’s amended complaint failed to show that there was anything more than an honest disagreement between the parties regarding the amount damages.
May 31, 2024
Communicable Disease Business Income Coverage Limit Is $100,000 Per Occurrence

NEWARK, N.J. — A federal judge in New Jersey ruled that a commercial insurance policy’s applicable limit for its Communicable Disease Business Income Coverage is $100,000 per occurrence and the threat of the spread of the coronavirus and not Gov. Phil Murphy’s executive orders triggered this coverage, granting an insurer’s motion for summary judgment and denying an insured’s cross-motion in a declaratory judgment lawsuit arising from the pandemic.
May 31, 2024
Judge Dismisses Coverage Dispute Between Contractor, Insurer After Settlement

LOS ANGELES — A federal judge in California granted a contractor and a commercial general liability insurer’s joint stipulation of dismissal filed after the parties agreed to a settlement, dismissing with prejudice allegations stemming from claims that the contractor failed to secure a building before a hurricane.
May 29, 2024
Florida Panel Reverses Judgment In Insurer’s Favor In Storm Damage Coverage Suit

TAMPA, Fla. — A Florida appeals panel on May 29 concluded that a lower court impermissibly weighed the evidence in ruling on an insurer’s motion for summary judgment when it held that the insurer’s and insured’s affidavits resulted in a “tie” and there were no genuine disputes of material facts, reversing the lower court’s grant of summary judgment in favor of the insurer in the insured’s breach of contract lawsuit seeking coverage for alleged roof damage caused by a wind and hail storm.
May 29, 2024
Washington Panel Affirms Dismissal Of Quest Diagnostics’ Coronavirus Coverage Suit

SEATTLE — A Washington appeals panel held May 28 that Quest Diagnostics Inc. failed to establish that the presence of COVID-19 resulted in physical loss or damage to its insured property, affirming a lower court’s dismissal of the insured’s breach of contract and declaratory judgment lawsuit seeking coverage under the civil authority policy provision for its business interruption losses.
May 28, 2024
4th Circuit Affirms No Coverage Ruling In Coronavirus Coverage Suit

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of an insurer in Mars Inc.’s declaratory judgment lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding no reversible error in the lower court’s ruling.
May 28, 2024
Contractor, Insurer Seek Dismissal Of Coverage Claims After Settlement

LOS ANGELES — A contractor and an insurer filed a joint stipulation of dismissal on May 24, seeking to bring an end to their dispute in a California federal court stemming from the contractor’s alleged failure to properly secure a building under construction in advance of a hurricane after they agreed to a settlement.
May 24, 2024
5th Circuit Affirms Reduced Attorney Fee Award In Hail, Wind Damage Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 23 affirmed a federal court’s reduction of an insured’s attorney fee award from the requested $171,700 to $34,500 in a breach of contract and bad faith lawsuit arising from the insured’s hail and wind property damage, agreeing with the trial court that a reduction in attorney fees was appropriate.
May 24, 2024
California High Court: Presence Of COVID-19 Does Not Constitute Direct Physical Loss

SAN FRANCISCO — Answering “no” to a certified question from the Ninth Circuit U.S. Court of Appeals, the California Supreme Court held May 23 that the “actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
May 24, 2024
N.C. High Court Agrees To Review Clothing Retailer’s Coronavirus Coverage Suit

RALEIGH, N.C. — The North Carolina Supreme Court on May 23 granted a clothing retailer insured’s request to review an appeals court’s ruling that affirmed a trial court’s dismissal of its lawsuit seeking coverage for its losses arising from the COVID-19 pandemic.
May 24, 2024
Bad Faith Claims Proceed; Fact Issue Exists On Whether Additional Covered Is Owed

LAKE CHARLES, La. — A homeowners insurer is not entitled to partial summary judgment on its insureds’ bad faith claims arising out of a dispute over coverage for hurricane damages because a question of fact exists as to whether additional payments were owed and withheld under the policy by the insurer, a Louisiana federal judge said.
May 24, 2024
California Jury Awards Sisters $18M In Bad Faith Suit Over Flood Damage

SAN BERNARDINO, Calif. — A California jury awarded two sisters $6 million in past noneconomic losses and $12 million in punitive damages after finding that insurers committed breach of contract and acted in bad faith in their handling of the insureds’ property damage claim arising from a 2019 flood.
May 24, 2024
Appraisal Is Premature, Florida Panel Rules, Reverses Hurricane Irma Coverage Suit

MIAMI — A Florida appeals panel agreed with an insurer that an appraisal in a Hurricane Irma coverage dispute is premature because an evidentiary hearing is first necessary to conclude whether a condominium association insured satisfied post-loss conditions under a commercial insurance policy, reversing a lower court’s ruling ordering appraisal and remanding.
May 24, 2024
Texas High Court: Lower Court Did Not Lack Jurisdiction In Storm Coverage Dispute

AUSTIN, Texas — The Texas Supreme Court held that Texas Insurance Code Section 2210.575(e)’s requirement that a trial judge presiding over a lawsuit against the Texas Windstorm Insurance Association be appointed by the Judicial Panel on Multidistrict Litigation is mandatory but not jurisdictional, reversing an appeals court’s finding that the lower court lacked subject matter jurisdiction over a storm damage coverage suit and remanding for further proceedings.
May 23, 2024
Guaranty Association Answers Hurricane Damage Claims, Says Allegations Lack Facts

NEW ORLEANS — The Louisiana Insurance Guaranty Association (LIGA) responded to a homeowner’s petition for damages by stating that the allegations against LIGA are not factual but are legal conclusions regarding the homeowner’s claims that his now-insolvent homeowners insurer, for which LIGA is successor in interest, failed to adequately compensate him for alleged losses related to Hurricane Ida.
May 20, 2024
5th Circuit Refuses To Rehear Dispute Over $1M Settlement Of Canceled Music Festival

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals denied an insurer’s petition to reconsider its reversal of a lower federal court’s summary judgment ruling in its favor in the insured’s lawsuit seeking coverage for an underlying $1 million class action settlement arising from the insured’s refusal to refund ticket sales for the South by Southwest festival that was canceled due to the COVID-19 pandemic, refusing to disturb its finding that the policy’s contract and professional services exclusions do not bar coverage.
May 20, 2024
Massachusetts Panel Affirms Dismissal Of Restaurants’ Coronavirus Coverage Suit

BOSTON — A Massachusetts appellate panel on May 20 affirmed a lower court’s grant of an insurer’s motion to dismiss a coverage lawsuit arising from the coronavirus pandemic, concluding that the restaurant insureds failed to demonstrate that the coronavirus physically altered or affected their insured property in any way.
May 20, 2024
U.S. High Court Denies Insurer’s Certiorari Petition In Arbitration Dispute

WASHINGTON, D.C. — The U.S. Supreme Court on May 20 denied a commercial property insurer’s petition for writ of certiorari seeking review of the Alabama Supreme Court’s dismissal of its appeal of a lower court’s order denying its motion to invoke the policy’s appraisal procedure in a Hurricane Sally coverage dispute.
May 16, 2024
Panel Amends Opinion After Insureds Seek Clarification In COVID-19 Coverage Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 15 filed an amended memorandum indicating that its reversal of a lower federal court’s denial of leave to amend a claim under an insurance policy’s Crisis Event provision applied to two sets of insureds in a coronavirus coverage dispute.
May 16, 2024
Judge Cleans Up Docket, Closes Hurricane Coverage Suit Against Insolvent Insurer

LAKE CHARLES, La. — A Louisiana federal judge on May 15 issued an order administratively closing a homeowner’s breach of contract and bad faith suit over Hurricane Laura damage after the case had been stayed for almost a year due to the insurer’s insolvency, finding that “[n]early four years have passed since Hurricane Laura and the court wishes to clean up its docket.”
May 15, 2024
New Jersey Panel Reverses Ruling In Insurer’s Favor In Storm Damage Dispute

TRENTON, N.J. — A New Jersey appeals court reversed a lower court’s summary judgment ruling in favor of an insurer in an insured’s breach of contract and bad faith lawsuit arising from storm damage claim, concluding that a construction company’s invoices sufficiently established a prima facie showing of disputed facts as to how much property damage was “causally related” to a fallen tree limb, preventing summary judgment.
May 15, 2024
Coverage For Water Damages Limited To $10K Under Homeowners Policy, Panel Says

HOUSTON — No additional coverage is owed under a homeowners policy for water damages caused by water pipes that burst as a result of power outages and freezing temperatures in the wake of Winter Storm Uri in Texas because the policy’s water damage endorsement clearly limits coverage under the policy to $10,000, the First District Texas Court of Appeals said May 14 in affirming a trial court’s ruling on breach of contract and extracontractual claims.
May 14, 2024
Ohio Panel: No Coverage Owed For Settlement Of Claims Insured Financed Terrorists

CINCINNATI — An Ohio appeals panel held that a lower court correctly granted summary judgment in favor of insurers in their lawsuit seeking a declaration that they have no duty to indemnify their mutual insured against an underlying settlement of a lawsuit alleging that it illegally financed terrorist groups in the Republic of Colombia.
May 13, 2024
Judgment Granted For Guaranty Association In Bad Faith Suit Over Hurricane Damage

LAFAYETTE, La. — A Louisiana federal judge granted the Louisiana Insurance Guaranty’s (LIGA) motion for summary judgment in a bad faith and breach of contract suit filed against a now-insolvent homeowners insurer over purported hurricane damage, finding that LIGA, which was substituted as a defendant for the insurer after it became insolvent, established that it was prejudiced by a lack of notice regarding the alleged damage.
May 10, 2024
3rd Circuit Denies Ralph Lauren’s Motions To Remand Coronavirus Coverage Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on May 9 denied Ralph Lauren Corp.’s motions seeking to vacate and remand a New Jersey federal court’s ruling in favor of its insurer in a coronavirus coverage dispute.