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Mealey's Insurance

January 24, 2024
9th Circuit Panel Majority Reverses Ruling On Pollution Exclusion’s Applicability

SAN FRANCISCO — The majority of the Ninth Circuit U.S. Court of Appeals on Jan. 23 reversed a district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris after determining that a potential for coverage exists because the mechanism of exposure does not clearly constitute an event that is commonly thought of as pollution event pursuant to California precedent.
January 24, 2024
Magistrate Judge Recommends Default Judgment, Sanctions Be Entered Against Insureds

HARRISBURG, Pa. — A Pennsylvania federal magistrate judge recommended granting an insurer’s motion for entry of default and motion for sanctions in a water and mold coverage suit because the insured homeowners have repeatedly refused to comply with a number of the court’s orders and the insurer has been prejudiced as a result of the insureds’ failure to comply with the court’s orders.
January 23, 2024
Dismissal Stipulated In Asbestos Coverage Dispute Involving Guaranty Association

COLUMBIA, S.C. — Remaining defendant insurers stipulated to dismissal in a South Carolina federal court of cross-claims by or against two defendant insurers that were previously dismissed from a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.
January 23, 2024
Insured Entitled To Depose Claims Handlers In Environmental Coverage Dispute

DETROIT — An insured seeking coverage for underlying environmental contamination suits is entitled to depose an insurer’s claims handlers because the information sought by the insured is relevant to the insured’s coverage claim and is relevant in determining whether the insurer acted in bad faith in handling the claim, a special master appointed by a Michigan federal court said in granting the insured’s motion to compel deposition testimony.
January 23, 2024
Insurer Removes Insured’s Complaint Seeking Coverage For Contamination Costs

TACOMA, Wash. — An insured alleges in an amended complaint, recently removed to Washington federal court, that its insurer breached its contract, acted in bad faith and violated Washington law by denying coverage for environmental liabilities and defense costs incurred as a result of contamination allegedly caused by the insured’s marine operations.
January 22, 2024
Infestation Exclusion Bars Coverage For Roof Damage, 4th Circuit Affirms

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Jan. 19 affirmed a Maryland federal court’s ruling that an insured’s claims for breach of contract and bad faith fail because the policy’s infestation exclusion precludes coverage for roof damage caused by an infestation of vultures.
January 22, 2024
High Court Refuses To Consider If Damage Caused By Insured’s Work Is Occurrence

WASHINGTON, D.C. — The U.S. Supreme Court denied a petition for a writ of certiorari on Jan. 22, refusing to consider whether the Third Circuit U.S. Court of Appeals rewrote Pennsylvania insurance law in its application of the faulty workmanship doctrine when it found that damages to natural gas wells caused by an insured’s fracking work does not constitute an occurrence under a commercial general liability policy.
January 22, 2024
Insureds Failed To Show Valid Basis For N.C. High Court Review, Insurer Argues

RALEIGH, N.C. — An insurer argued to the North Carolina Supreme Court that an appeals court’s ruling that affirmed a lower court’s dismissal of a clothing retailer insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic “presents no precedent-setting error that warrants intervention” by the North Carolina Supreme Court.
January 22, 2024
Panel Says District Court Properly Dismissed Insured’s Suit For Lack Of Jurisdiction

NEW ORLEANS — A district court properly dismissed a fire-suppressing foam distributor’s breach of contract and bad faith suit against its insurer, which denied coverage for a subpoena served on the insured in an underlying multidistrict litigation suit seeking damages for bodily injuries and contaminated drinking water caused by the use of the foam, because the lower court properly found that it lacked specific personal jurisdiction over the insurer, the Fifth Circuit U.S. Court of Appeals said.
January 16, 2024
Insureds Cannot Pursue Consequential Damages On Contract Breach Claim

CEDAR RAPIDS, Iowa — Insureds seeking coverage for mold remediation and property damages caused by a windstorm are not entitled to consequential damages on their breach of contract claim, an Iowa federal judge said Jan. 12 in granting the insurer’s motion for summary judgment.
January 16, 2024
Coverage Owed For Collapse Of Bricks Caused By Hidden Decay, Federal Judge Says

CHATTANOOGA, Tenn. — A Tennessee federal judge determined in a revised opinion that an insurer owes coverage for the collapse of bricks from a wall that occurred during a contractor’s renovations because the collapse was caused by hidden decay, a covered cause of collapse under the policy. However, the judge said questions of fact exist as to whether coverage is owed for the demolition of the remainder of the wall.
January 16, 2024
Pollution Exclusion Does Not Bar Coverage Based On Transportation Endorsement

BIRMINGHAM, Ala. — A commercial general liability policy’s pollution exclusion does not apply as a bar to coverage for underlying environmental contamination suits filed against an insured because the policy’s transportation endorsement exception adds back the coverage excluded by the policy’s pollution exclusion, an Alabama federal judge said in denying the insurer’s motion for summary judgment.
January 11, 2024
Hospital States Claim Under Health Care Endorsement, 1st Circuit Rules In Reversal

BOSTON — The First Circuit U.S. Court of Appeals ruled Jan. 10 that a hospital insured was subject to decontamination orders and, therefore, states a claim for “Disease Contamination Coverage” under its commercial property insurance policy’s Health Care Endorsement, reversing in part a federal court’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic.
January 10, 2024
Reinsurer Tackles Third-Party Beneficiary Theory In Cleanup Costs Coverage Row

PADUCAH, Ky. — Arguing in part that what it calls a newly asserted third-party beneficiary theory fails as a matter of law, a reinsurer filed a reply brief on Jan. 9 urging a Kentucky federal court to grant its summary judgment motion in a dispute over pollution-related cleanup costs.
January 08, 2024
New Jersey Panel Affirms Dismissal Of Wawa’s Coronavirus Coverage Dispute

TRENTON, N.J. — A New Jersey appeals court panel on Jan. 5 affirmed a lower court’s ruling dismissing with prejudice Wawa Inc.’s first amended complaint seeking coverage for its losses arising from the COVID-19 pandemic, finding that the court’s holdings and reasonings in Mac Prop. Grp., LLC v. Selective Fire & Cas. Ins. Co. apply to Wawa's commercial liability insurance policies and, therefore, no coverage is owed.
January 04, 2024
1 Defendant Files Status Report In Insurer’s Suit Over Asbestos Liabilities Row

OMAHA, Neb. — Evaluating proof of claims in separate liquidation proceedings “is expected to take several years,” a defendant told a Nebraska federal court in its latest status report in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures.
January 03, 2024
United States Backs Kaiser Gypsum Asbestos Insurer In Supreme Court Case

WASHINGTON, D.C. — Because the policies of the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. are property of the bankruptcy estates and the insurer is a creditor of the debtors, the insurer has standing as a “party in interest” to challenge the debtors’ reorganization plan, the United States tells the U.S. Supreme Court in an amicus curiae brief.
January 03, 2024
Company Seeks To Compel Insurers To Produce Documents In AFFF Litigation

CHARLESTON, S.C. — A company that makes firefighting products filed a motion on Jan. 2 in South Carolina federal court seeking to compel insurance companies to produce documents in a coverage dispute related to injuries from the firefighting substance aqueous film forming foam (AFFF) in the multidistrict litigation for AFFF, arguing that the insurers have refused to produce basic categories of documents that are directly related to the issues in dispute and are “plainly subject to discovery.” The company contends that the insurers’ objections to discovery requests are not valid, especially considering that the insurers are “seeking to escape up to $1 billion in coverage.”
January 03, 2024
Insured Entitled To 2 Policy Limits Based On Policies’ Ambiguity, Panel Says

SAN FRANCISCO — A trial court erred in finding that an insured automotive products retailer, seeking coverage for underlying asbestos bodily injury lawsuits, is only entitled to payment of one policy limit under policies issued by two insurers because the policies, which were extended to provide coverage for more than a year, are ambiguous as to whether a new policy limit applied for the extended coverage and must be construed in the insured’s favor, the First District California Court of Appeal said in reversing a portion of the trial court’s ruling.
January 02, 2024
Insurer Says Silica Exclusion Bars Coverage For Underlying Bodily Injury Suits

SANTA ANA, Calif. — No coverage is owed for underlying silica exposure bodily injury suits filed against an insured countertop manufacturer, supplier and distributor because the insured’s policies contain a silica exclusion that bars coverage for the underlying suit, an insurer says in a complaint filed in California federal court.
January 02, 2024
Defendants Must Pay $72.5M In Oil Seizure Row Involving Insurrection Clause

NEW YORK — After a New York federal jury found for plaintiff CITGO Petroleum Corp. on three of four issues in a suit stemming from the February 2020 seizure of crude oil at a Venezuelan port and involving a marine cargo reinsurance policy, judgment of $54,235,187.24 plus $18,321,092.02 in prejudgment interest was entered against the defendants.
December 22, 2023
Sewage Pipeline Installation Coverage Suit Dismissed After Underlying Case Settles

SEATTLE — A Washington federal judge ordered the dismissal with prejudice of a coverage dispute arising out of an insured’s alleged negligent installation of a sewage pipeline after the parties indicated that the underlying suit has settled, rendering the duty-to-defend issue in the coverage dispute moot.
December 21, 2023
Preliminary Injunction Bid Fails In Dispute That Arose Under Fronting Arrangement

NEW ORLEANS — An insurer has established a substantial likelihood of success on certain aspects of some claims against a managing general agent (MGA) but is not entitled to a preliminary injunction, a Louisiana federal judge has ruled in the case arising from a fronting arrangement.
December 21, 2023
Jury Awards More Than $49M In Damages Relating To Insurrection Clause

NEW YORK — A New York federal jury found for plaintiff CITGO Petroleum Corp. on three of four issues in a breach of contract case involving a marine cargo reinsurance policy, awarding damages of more than $49.3 million for claims stemming from the seizure of crude oil at a Venezuelan port in February 2020.
December 19, 2023
Asbestos Firms, Insolvent Insurer Group Drop Appeal Over Settlement

NEW ORLEANS — A Louisiana federal judge dismissed an appeal by two asbestos law firms of a federal bankruptcy court’s approval of a $1 million settlement between the Chapter 7 trustee for a bankrupt insulation supplier and the Louisiana Insurance Guaranty Association (LIGA) after the parties said in a joint motion to dismiss that they have “resolved their differences.”