Mealey's Insurance : Mealey's : Legal News & Analysis

Mealey's Insurance

October 11, 2024
Judge Partly Grants Insurer’s Motion To Dismiss In Coverage Dispute Over Settlement

DENVER — A federal judge in Colorado granted in part and denied in part a defendant insurer’s partial motion to dismiss a plaintiff insurer’s lawsuit seeking contribution for an underlying settlement arising from claims that the subcontractor insured’s defective and cracking stucco work resulted in property damage at a retirement community, dismissing the claims for declaratory judgment and common-law and statutory bad faith.
October 09, 2024
Chemical Company: Insurer Withheld Full Value Of Business Interruption Loss

BEAUMONT, Texas — A sustainable chemical company insured sued its insurer in a Texas federal court for breach of contract and declaratory judgment, seeking to obtain coverage for the full value of its business interruption loss caused by an explosion at a Texas plant.
October 08, 2024
Breach Of Contract Claim Is Only Viable Claim In Water Damage Coverage Suit

NEW HAVEN, Conn. — A breach of contract claim alleged against a property insurer can proceed because the policy’s water exclusion is ambiguous as to whether it covers water damages caused by blocked pipes in an insured building; however, claims alleging bad faith and violations of Connecticut law must be dismissed for failure to state a claim, a Connecticut federal judge said in partially denying the insurer’s motion to dismiss.
October 08, 2024
Hawaii High Court Says GHGs Are Pollutants, Reckless Conduct Is Accident

HONOLULU — In response to two certified questions posed by a federal court in Hawaii in a suit filed by an insured petroleum company seeking coverage for underlying lawsuits alleging that the company is responsible for contributing to the effects of global warming based on its failure to warn of the hazards of using fossil fuel products, the Hawaii Supreme Court on Oct. 7 determined that an “accident” includes an insured’s reckless conduct and that greenhouse gases (GHGs) are pollutants as defined in the subject policies’ pollution exclusions.
October 08, 2024
7th Circuit Sets Argument In Reinsurers’ Arbitration Estoppel Dispute

CHICAGO — The Seventh Circuit U.S. Court of Appeals has scheduled oral argument for Nov. 5 in reinsurers’ appeal concerning the effects of prior arbitration, which involves asbestos-related liabilities; the dispute also includes a dismissal motion that is based on a recent U.S. Supreme Court ruling.
October 08, 2024
Insurer Failed To Prove Hydrofracking Exclusion Bars Coverage For Underlying Suits

MIDLAND, Texas — A Texas federal judge denied an insurer’s motion for summary judgment in a dispute over reimbursement for underlying lawsuits arising out of an explosion at a saltwater facility because the insurer failed to meet its burden of proving that the policy’s hydrofracking exclusion or commercial general liability exclusion bar coverage for the underlying suits.
October 08, 2024
Pennsylvania Federal Judge: Insured Not Entitled To Judgment On Allocation Issue

PITTSBURGH — A Pennsylvania federal judge denied an insured’s motion for summary judgment on counterclaims filed by four excess insurers in an asbestos coverage dispute after determining that the insurers’ counterclaims can proceed because the insured’s motion addresses only the appropriate method of allocation for defense costs even though the counterclaims also address issue of the insurers’ contribution rights from each other.
October 04, 2024
Panel Vacates Portion Of Ruling Issued In Insurer’s Favor In Mold Coverage Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals vacated a district court’s summary judgment ruling in favor of an insurer on breach of contract, declaratory judgment and bad faith claims after determining that the insured met its burden of proving that there is a potential of coverage for mold damage even if there was damage that existed before the issuance of the policy.
October 02, 2024
Professional Insurer, Contractor Settle Cross-Claims In Mold Damage Coverage Suit

LAS VEGAS — A professional liability insurer and a contractor filed a notice in a Nevada federal court indicating that they have settled their cross-claims in a mold and moisture damage coverage dispute.
October 01, 2024
Fact Issues Exist On Whether Coverage Is Owed For Water, Mold Damages, Judge Says

LOS ANGELES — A California federal judge denied a motion for summary judgment filed by insurers that denied coverage for mold and water damages sustained in numerous buildings of an insured’s construction project because questions of fact exist as to whether the policies’ fungus extension and delay in opening extension afford coverage and whether the policies’ exclusion for cost of making good (COMG) excluded coverage for any damage caused by faulty workmanship.
October 01, 2024
Insurer Seeks High Court’s Review Of 4th Circuit’s Ruling In Chemical Exposure Suit

WASHINGTON D.C. — Review of a Fourth Circuit U.S. Court of Appeals’ ruling that an insurer has a duty to defend an insured for an underlying chemical exposure suit is warranted because the Fourth Circuit incorrectly determined that a duty to defend exists even though the underlying complaint fails to assert any covered claims, an insurer says in a petition for a writ of certiorari filed in the U.S. Supreme Court.
October 01, 2024
Federal Judge Dismisses Insured’s Fuel Oil Cleanup Suit Following Settlement

LAS VEGAS — A Nevada federal judge granted a joint stipulation of dismissal after an excess insurer and its insured settled the insured’s claim for coverage for the cleanup of fuel oil that spilled on a Nevada highway from an insured tractor-trailer.
September 30, 2024
Contractor Says Coverage Is Owed For Damages To Entirety Of Building

CINCINNATI — A federal district court erred in refusing to find that coverage is owed for damages to the entirety of a building as a result of the collapse of some of the bricks from one of the building’s walls, the contractor says in an appellant reply brief filed in the Sixth Circuit U.S. Court of Appeals.
September 30, 2024
Reinsurer’s Declaratory Judgment Suit Is Tossed For Lack Of Contractual Privity

BROOKLYN, N.Y. — Ruling in part that a reinsurer “failed to plead privity or third-party beneficiary status” and therefore failed to state any claims, a New York federal judge on Sept. 27 dismissed the lawsuit in which the reinsurer sought a declaratory judgment regarding state court litigation arising from a building’s partial collapse.
September 30, 2024
Suit Seeking Coverage For Oil Spill Fails To Assert Claim Under Federal Law

OKLAHOMA CITY — An insured’s breach of contract and declaratory judgment suit filed against its excess insurers seeking coverage for damages caused by an oil spill must be dismissed because the insured’s claims for breach of contract and declaratory judgment do not assert a claim under federal law, an Oklahoma federal judge said in granting a motion to dismiss filed by one of the excess insurers.
September 24, 2024
Discovery Ruling Issued In Asbestos Coverage Row Involving Insolvent Insurer

OMAHA, Neb. — A Nebraska federal magistrate judge granted in part National Indemnity Co. (NICO)’s motion to compel discovery of an insurer in its suit seeking to enforce obligations by multiple insurers, one of whom is now insolvent, for the liability NICO incurred related to claims for asbestos exposure, finding that the attorneys’ eyes only designation (AEO) must be removed from discovery material due, in part, to the insurer’s failure to “articulate why an AEO designation is the right tool to prevent this harm.”
September 23, 2024
Federal Magistrate Judge Says Asbestos Coverage Suit Should Proceed

CINCINNATI — An Ohio federal magistrate judge recommended denying an insurer’s motion to dismiss an insured’s amended complaint seeking coverage for underlying asbestos liabilities because the amended complaint sufficiently establishes the existence of personal jurisdiction over the insurer and sufficiently alleges facts to support the insured’s declaratory judgment and breach of contract claims.
September 23, 2024
Pollution Exclusion Does Not Preclude Coverage For Suit Stemming From Breath Mints

ST. LOUIS — A Missouri federal judge on Sept. 20 granted a motion to dismiss an insurer’s suit seeking a declaration that no coverage is owed for an underlying suit seeking damages caused by a child’s ingestion of liquid breath mints that contained a chemical that damaged the child’s esophagus because the policy’s pollution exclusion cannot be interpreted as a bar to coverage for the underlying suit.
September 23, 2024
California High Court Tosses Certified Question Following COVID-19 Coverage Ruling

SAN FRANCISCO — In light of the recent ruling in John's Grill, Inc. v. The Hartford Financial Services Group, Inc., the California Supreme Court dismissed its consideration of a certified question from the Ninth Circuit U.S. Court of Appeals asking whether an insurance policy’s virus exclusion is unenforceable in a coverage lawsuit brought by owners, operators and managers of two Napa Valley, Calif., restaurants in the wake of the coronavirus pandemic.
September 19, 2024
Interpretation Of ‘Direct Physical Loss’ Phrase Was Erroneous, Building Owner Says

CINCINNATI — A district court erred in relying on a definition of the term “direct physical loss” as used in a prior opinion issued by the Sixth Circuit U.S. Court of Appeals when it determined that the collapse of some bricks from a wall within a building did not cause any damage to the wall or building as a whole, the building owner maintains in a Sept. 18 appellant reply brief filed in the Sixth Circuit.
September 19, 2024
Judge Denies Summary Judgment On Issue Of Contamination Exclusion’s Applicability

SANTA ANA, Calif. — A California federal judge refused to grant summary judgment in favor of an insured on the applicability of a policy’s contamination exclusion to losses sustained by the insured in the wake of the COVID-19 pandemic because the evidence could support a jury finding that the insured believed that the contamination exclusion would apply as a bar to coverage for the losses caused by the coronavirus.
September 18, 2024
No Coverage Afforded For Asbestos Suits Under Exposure Trigger Theory, Insurers Say

FORT WORTH, Texas — Two insurers maintain in reply briefs filed in Texas federal court that summary judgment in their favor in an asbestos coverage suit is warranted because coverage under their policies is barred under an exposure trigger of coverage theory, which they say applies pursuant to a Fifth Circuit U.S. Court of Appeals’ decision on the trigger of coverage issue.
September 17, 2024
Judge Refuses To Dismiss Contractor’s Coverage Suit Arising From Hotel Collapse

NEW ORLEANS — A federal judge in Louisiana denied builders risk insurers’ motion to dismiss a contractor’s breach of contract lawsuit seeking additional insured coverage for its $89,877,694 in losses arising from the aftermath of the partial collapse of a Hard Rock Hotel project in New Orleans, rejecting the insurers’ contention that the contractor’s lawsuit is untimely.
September 17, 2024
No Coverage Owed For Subpoena Issued To Insured In Fire-Suppressing Foam MDL

NEW HAVEN, Conn. — No coverage is owed to an insured distributor of a fire-suppressing foam for a subpoena served on the insured in an underlying multidistrict litigation seeking damages for bodily injuries and contaminated drinking water caused by the use of the foam because the subpoena does not constitute a claim under the insurance policy at issue, a Connecticut federal judge said in denying the insured’s motion for summary judgment and in granting the insurer’s motion for summary judgment.
September 17, 2024
Parties Dismiss Appeal Following Settlement Of Environmental Coverage Suit

SOUTH BEND, Ind. — An insured and its insurers filed a stipulation of voluntary dismissal of all appeals and cross-appeals in the Seventh Circuit U.S. Court of Appeals on Sept. 16 following the settlement of the insured’s suit seeking coverage for the cleanup of polychlorinated biphenyls (PCBs).