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

Mealey's Catastrophic Loss

February 13, 2024
Federal Judge Dismisses Tornado Coverage Suit Following Parties’ Stipulation

CHICAGO —A federal judge in Illinois dismissed insureds’ lawsuit alleging that their homeowners insurer systematically underestimated and underpaid their structural and personal property damage claims prompted by a June 22, 2015, tornado, four days after the parties filed a stipulation of dismissal.
February 12, 2024
English Justice Upholds Tribunals’ ‘Catastrophe’ Application In COVID-19 Cases

LONDON — Ruling in part that arbitration tribunals in two cases concerning the COVID-19 pandemic correctly concluded “that there had been a catastrophe for the purposes of the relevant Reinsurances,” a justice of the High Court of England and Wales on Feb. 9 dismissed an appeal in one case and allowed an appeal in the other case only as to the operation of an “Hours Clause.”
February 12, 2024
Condo Association Says It Settled Hurricane Coverage Row With Guaranty Association

SANFORD, Fla. — A condominium association notified a Florida state court of its settlement with the Florida Insurance Guaranty Association (FIGA), the receiver for the now-insolvent commercial property insurer that the condo association sued seeking coverage for damage caused by Hurricane Irma.
February 09, 2024
Insurer Petitions 9th Circuit For Panel Rehearing Of Pollution Exclusion Ruling

SAN FRANCISCO — A district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris should be affirmed because a panel majority of the Ninth Circuit U.S. Court of Appeals failed to consider two applicable California appellate decisions before concluding that the insurer’s pollution exclusion does not apply to toxic dust, an insurer argues in its petition for panel rehearing.
February 07, 2024
Texas Panel: Exclusion Bars Coverage For Baylor College Of Medicine’s COVID-19 Losses

HOUSTON — A Texas appeals court on Feb. 6 affirmed a lower court’s summary judgment ruling in favor of insurers in Baylor College of Medicine’s lawsuit seeking commercial property insurance coverage for its lost business income arising from the coronavirus pandemic, finding that the Pollution and Contamination exclusion unambiguously bars coverage.
February 06, 2024
Texas Majority Says Windstorm Deductible Ambiguous, Reverses Judgment For Insurer

DALLAS — A majority of a Texas appeals court reversed a lower court’s judgment against insureds in a coverage dispute arising from tornado damage, finding that the term “windstorm” in their homeowners insurance policy’s “Windstorm or Hail Deductible” is ambiguous and that the insureds’ construction of it was not unreasonable.
February 06, 2024
Insurer Permitted To Opt Out Of Hurricane Ida Settlement To File Motion To Dismiss

NEW ORLEANS — A federal magistrate judge in Louisiana granted an insurer’s motion to opt out of the court’s Hurricane Ida Streamlined Settlement Program for the limited purpose of filing its motion to dismiss its insured’s coverage lawsuit, finding that whether the insureds’ claims are futile should be resolved before proceeding with the next phases of settlement program.
February 06, 2024
Federal Judge Refuses To Dismiss Breach Of Contract Suit Over Hurricane Ida Damage

NEW ORLEANS — A federal judge in Louisiana denied a homeowners insurer’s motion to dismiss an insured’s breach of contract lawsuit seeking coverage for its property damage arising from Hurricane Ida, rejecting the insurer’s contention that dismissal is warranted because the insured failed to join two required parties.
February 06, 2024
Hail Damage Suit Against Guaranty Association Tossed For Lack Of Jurisdiction

BATON ROUGE, La. — A Louisiana federal judge dismissed a breach of contract and bad faith suit regarding failure to compensate a homeowner for hailstorm damage against a now-insolvent insurer and the Louisiana Insurance Guaranty Association (LIGA), finding that the court lacks subject matter jurisdiction because both LIGA and the homeowner are citizens of Louisiana.
February 05, 2024
Insured Cannot Recover Attorney Fees, Texas High Court Says In Answering Question

AUSTIN, Texas —The Texas Supreme Court on Feb. 2 answered “yes” to a certified question from the Fifth Circuit U.S. Court of Appeals in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), concluding that the TPPCA prohibits the insured from recovering attorney fees because the insurer voluntarily paid the full appraisal award for the insured’s tornado damage plus any statutory interest.
February 02, 2024
Judge Says Prompt Payment Claim Cannot Be Resolved Until Coverage Is Resolved

FORT WORTH, Texas — A Texas federal judge on Feb. 1 partially adopted a magistrate judge’s findings, conclusions and recommendations (FCR) after determining that a homeowners insurer is entitled to summary judgment on all but one extracontractual claim alleged against the insurer because the insured’s claim for violation of the Texas Prompt Payment Claims Act (TPPCA) is dependent on resolution of the coverage issue.
February 02, 2024
Florida High Court Affirms Order Compelling Appraisal Of Hurricane Irma Damage

TALLAHASSEE, Fla. — The Florida Supreme Court on Feb. 1 affirmed an appeals court’s ruling affirming a lower court’s order compelling appraisal of a condominium association insured’s Hurricane Irma damage, rejecting the commercial residential insurer’s assertion that a court is barred as a matter of law from ordering an appraisal where coverage was wholly denied by the insurer.
February 01, 2024
Breach Of Contract, Bad Faith Claims In Hurricane Damages Suit Fail, Judge Says

NEW ORLEANS — A Louisiana federal judge granted a homeowners insurer’s motion to dismiss an insured’s breach of contract and bad faith claims without prejudice to amend the complaint after determining that the insured fails to allege sufficient facts in support of the claims stemming from the insurer’s adjustment of a hurricane damages claim.
February 01, 2024
Federal Judge Tosses Hurricane Coverage Case After Suspending Homeowner’s Counsel

LAFAYETTE, La. — A Louisiana federal judge adopted a magistrate judge’s report and recommendation to dismiss for failure to prosecute after a homeowner failed to attend a status conference in her hurricane coverage suit against her now-insolvent insurer following the judge’s termination of her legal counsel.
January 25, 2024
N.J. High Court: Casino Fails To Allege ‘Direct Physical Loss’ In COVID-19 Suit

TRENTON, N.J. — The New Jersey Supreme Court on Jan. 24 affirmed an appeals panel’s finding that a lower court erred in denying insurers’ motion to dismiss an insured’s lawsuit seeking property and business interruption insurance coverage for its alleged loss of income during the closure of its Atlantic City casino in response to COVID-19 pandemic shutdown orders, finding that the insured has failed to plead that its business losses were caused by direct physical loss or damage under the policy and that the contamination exclusion further bars coverage.
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 23, 2024
Homeowner Sues Insurer, Guaranty Association, Seeks Coverage For Hurricane Damage

JACKSONVILLE, Fla. — A Florida homeowner sued his now-insolvent insurer and the Florida Insurance Guaranty Association (FIGA) in a Florida state court, asserting claims for breach of contract and violations of Florida law for failure to adequately cover purported losses related to Hurricane Ian.
January 23, 2024
Judge OKs Adding Guaranty Association In Bad Faith Suit Against Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to file an amended complaint to add as a defendant the Louisiana Insurance Guaranty Association (LIGA) in a breach of contract and bad faith suit against a now-insolvent homeowners insurer over its purported failure to adequately cover damage caused by Hurricane Ida, finding that amending the complaint is necessary due to the insurer’s insolvency and that the case must be remanded because complete diversity is destroyed.
January 22, 2024
Insurer Asks 5th Circuit To Reconsider Affirmation Of $502,172 Bad Faith Judgment

NEW ORLEANS — An insurer on Jan. 19 asked the Fifth Circuit U.S. Court of Appeals to reconsider its ruling that there was no reversible error in a jury’s conclusion that it acted in bad faith and underpaid its church insured for property damage that was caused by Hurricane Laura, challenging the panel’s ruling that affirmed the trial court’s $502,172.16 award in favor of the insured for damages, penalties and fees.
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
Bad Faith Claim Against Guaranty Association Dismissed In Hurricane Coverage Row

NEW ORLEANS — A Louisiana federal judge granted partial dismissal to the Louisiana Insurance Guaranty Association (LIGA), which was substituted for an insolvent homeowners insurer, in a breach of contract suit over damages from Hurricane Ida, finding that the claims for bad faith, mental anguish, penalties, pre-insolvency costs and interest must be dismissed because they are not covered claims for which “LIGA is the statutory successor.”
January 19, 2024
Court Ignored Ordinary Meaning Of Physical Loss, Insureds Tell N.C. High Court

RALEIGH, N.C. — Restaurant insureds tell the North Carolina Supreme Court that it should reverse an appeals court’s reversal of a lower court’s grant of partial summary judgment in their favor in a coronavirus coverage dispute, arguing that the phrase “physical loss or physical damage” includes loss of the physical use of property under the state’s “long-standing principles of insurance contract interpretation.”
January 19, 2024
Washington Majority Affirms Rulings Against Insurers In Coronavirus Coverage Suit

OLYMPIA, Wash. — A majority of the Washington Supreme Court on Jan. 18 affirmed a lower court’s denial of insurers’ motion to dismiss based on forum non conveniens in a coverage dispute with 60 colleges arising from the COVID-19 pandemic, further affirming the lower court’s issuance of an interstate antisuit injunction enjoining the insurers from taking further action in a parallel Illinois lawsuit.
January 16, 2024
City’s Cross-Complaints Are Not Prohibited, California Panel Rules In Reversal

SAN DIEGO — A California appeals panel held that a lower court erred in ruling that the city of Riverside’s cross-complaints in a dispute arising from a fire were prohibited as a matter of law, remanding with directions for the lower court to vacate its orders sustaining an insurer’s demurrers to the city's cross-complaints without leave to amend and enter new orders sustaining the demurrers with leave to amend.
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.