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

Mealey's Catastrophic Loss

December 13, 2023
Panel: Insured’s Argument In COVID-19 Dispute ‘Runs Into A Wall Of Precedent’

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of an insurer’s motion to dismiss an insured’s lawsuit seeking coverage for its losses arising from the shutdown of its event venue in response to the coronavirus pandemic, finding that the insured has failed to plausibly assert any “direct physical loss of or damage to” its property.
December 12, 2023
Minnesota Panel: Insured Failed To Allege Coronavirus Was Present At Its Properties

ST. PAUL, Minn. — A Minnesota appeals panel on Dec. 11 affirmed a lower court’s ruling dismissing an insured’s breach of contract lawsuit against its insurers, finding that the insured failed to assert that the coronavirus was present at and contaminated its insured casino and golf course properties and, therefore, it did not cause direct physical loss or damage.
December 12, 2023
Court Lacked Authority To Coordinate Not-Yet-Filed COVID-19 Coverage Suits

PITTSBURGH — A majority of the Pennsylvania Supreme Court held that Pennsylvania Rule of Civil Procedure 213.1 does not allow the coordination of actions that have not been filed at the time of the motion for coordination and that an insurer waived its argument that insureds were not entitled to seek coordination in the first place, affirming a Superior Court’s partial reversal of a lower court’s order coordinating coronavirus coverage lawsuits against Erie Insurance Exchange in the Allegheny County Court of Common Pleas.
December 12, 2023
Dental Practice Incurred No Direct Physical Loss, Insurers Argue To Pa. High Court

PITTSBURGH — Insurers filed a reply brief in the Pennsylvania Supreme Court defending their appeal of a Pennsylvania Superior Court majority’s ruling that at the very least, it is reasonable to interpret the phrase “direct physical loss of . . . property” to encompass the loss of use of a dental practice’s property due to the spread of the coronavirus “absent any actual damage to property.”
December 12, 2023
Insured Failed To Show Coronavirus Is A Pollution Condition, Panel Says

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeal on Dec. 11 affirmed a district court’s ruling that no coverage is owed to an insured for business interruption losses sustained as a result of the COVID-19 pandemic because the insured failed to show that the coronavirus qualifies as a pollution condition as required by the policy at issue.
December 12, 2023
California Judge Sustains Insurer’s Demurrer To Nonprofit’s COVID-19 Coverage Suit

LOS ANGELES — A California judge sustained an insurer’s demurrer to its nonprofit insured’s breach of contract, bad faith, negligent misrepresentation and declaratory relief complaint seeking coverage for its losses arising from the coronavirus pandemic, holding that the coronavirus and the subsequent governmental orders “are inextricably intertwined.”
December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
December 08, 2023
Home Inspector Can Testify In Dispute Over Insurance Payout, Repairs

TULSA, Okla. — A federal magistrate judge in Oklahoma on Dec. 7 denied an insured couple’s motion to exclude expert testimony by a property inspector who was hired by the insurer to review work done on a home damaged by a storm after the couple filed a breach of contract suit against the insurer.
December 05, 2023
Insurer Seeks Reimbursement From Government For Losses Caused By Contaminated Water

HONOLULU — In a complaint filed in Hawaii federal court, an insurer claims that the U.S. government must reimburse it for more than $500,000 paid to its insured for business losses after a fuel spill at a jet fuel storage facility operated by the U.S, Navy contaminated local drinking water and forced the insured to close its fast food restaurants for approximately four months.
December 04, 2023
Judge Allows Insurers To Amend To Add Fraud Defense For Pre-Hurricane Damage

NEW YORK — A New York federal judge on Dec. 1 issued an order granting a motion to amend an answer in a breach of contract suit filed against a commercial property insurer and an insurance syndicate over their failure to cover a condominium’s hurricane-related losses, finding that the proposed fraud defenses were sufficiently pleaded after discovery revealed that the alleged hurricane-related damage purportedly occurred before the hurricane.
December 04, 2023
Insureds’ Motion To Remand Breach Of Contract, Bad Faith Suit Denied

BATON ROUGE, La. — A Louisiana federal judge adopted a report recommending the denial of a motion to remand a hurricane damage coverage suit filed by insureds against a homeowners insurer, agreeing with the magistrate judge’s finding that complete diversity of citizenship exists because the insureds’ claims against a non-diverse, Louisiana insurance agent fail.
November 28, 2023
No Coverage Owed For Clothing Retailer’s COVID-19 Losses, N.C. Panel Affirms

RALEIGH, N.C. — The North Carolina Court of Appeals affirmed a lower court’s dismissal of an insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the insured failed to allege a tangible alteration to its more than 1,300 clothing stores to trigger coverage.
November 28, 2023
No Coverage Owed For COVID-19 Losses Under Pollution Policy, Court Says

NEW YORK — No coverage is owed for business interruption losses caused by the coronavirus because the virus is not a pollution condition and does not constitute an indoor environmental condition as defined in the pollution and remediation policy, a New York appellate panel said in affirming a trial court’s ruling.
November 28, 2023
Additional Work Not Barred By Policy’s Mold Sublimit Provision, Judge Says

PHILADELPHIA — A claim for additional coverage for mold remediation work required by a local building code is not subject to a policy’s mold sublimit provision because the policy’s ordinance or law provision provides coverage for the additional work that was required by the enforcement of a local building code, a Pennsylvania federal judge said in partially granting the insureds’ motion for summary judgment.
November 28, 2023
Expert On Hail Damage Admissible, But Federal Judge Orders 2nd Deposition

DALLAS — A forensic engineer retained in an insurance coverage dispute can testify, a federal judge in Texas ruled, rejecting a motion filed by the insurer to exclude his testimony, but the judge ordered that the expert be made available for a second deposition at the insured’s expense.
November 27, 2023
Judge Grants Substitution Motion In Hurricane Coverage Row With Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted a motion to substitute the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a property owner’s breach of contract and bad faith suit against its now-insolvent insurer that purportedly failed to cover alleged losses from Hurricane Ida, finding that substituting LIGA as a defendant is permitted in an action seeking to resolve covered claims.
November 20, 2023
Judge Issues Opinion Reaffirming Order In Landlord’s Coronavirus Coverage Suit

NEW YORK — A federal judge in New York issued an opinion reaffirming its Sept. 29 order granting a commercial property insurer’s motion for summary judgment in a coronavirus coverage suit, finding that a commercial landlord insured failed to meet the contractual prerequisites to recover under the insurance policy’s two communicable disease provisions.
November 16, 2023
Insurer Says Dismissal Of Claims In Hurricane Damage Suit Must Be Affirmed

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals should affirm a district court’s dismissal of claims alleging breach of contract, 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 did not allege sufficient facts in support of the insureds’ claims, the insurer contends in its appellee brief.
November 16, 2023
Bad Faith, Unfair Practices Claims In Hurricane Coverage Suit Are Time-Barred

NEW BERN, N.C. — An insured’s claims for bad faith and for violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) arising out of claims for property damages caused by Hurricanes Matthew and Florence cannot proceed because the claims are barred by the applicable statute of limitations, a North Carolina federal judge said in partially granting a commercial property insurer’s motion for judgment on the pleadings.
November 16, 2023
Judge Grants Request To Amend Complaint To Add Guaranty Association, Issues Remand

NEW ORLEANS — One day after a Louisiana federal judge granted a homeowner’s motion to add the Louisiana Insurance Guaranty Association (LIGA) to his hurricane coverage suit against his now-insolvent insurer, the homeowner added LIGA as a defendant in his amended complaint.
November 16, 2023
Judge Allows Insured To Add Guaranty Association, Says No ‘Dilatory Purpose’

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to amend his complaint and add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a hurricane coverage suit against his now-insolvent insurer, finding in part that though LIGA is a nondiverse party, the homeowner had no “dilatory purpose” in amending the complaint.
November 16, 2023
Policy’s Virus Exclusion Bars Coverage For Coronavirus Losses, 9th Circuit Affirms

PHOENIX — The Ninth Circuit U.S. Court of Appeals on Nov. 15 held that an insured failed to plausibly allege that anything other than the COVID-19 pandemic is the efficient proximate cause of its losses, affirming a federal court’s dismissal of the insured’s commercial insurance coverage lawsuit.
November 16, 2023
Insurer Granted Summary Judgment On Breach Of Contract, Bad Faith Claims

DALLAS — A Texas federal judge granted a homeowners insurer’s motion for summary judgment on an insured’s breach of contract claim and extracontractual claims but stayed a ruling on the motion as it pertained to the insured’s claim for violation of the Texas Prompt Payment of Claims Act (TPPCA) to allow the Texas Supreme Court to answer a certified question posed by the Fifth Circuit U.S. Court of Appeals regarding recovery under the TPPCA.
November 15, 2023
Judge Denies Dismissal In Hurricane Coverage Suit, Says Substitution Has No Impact

LAKE CHARLES, La. — A Louisiana federal judge denied dismissal of a homeowners’ bad faith suit against their now-insolvent homeowners insurer for purportedly failing to adequately compensate them for damages caused by Hurricane Laura, finding that substituting the Louisiana Insurance Guaranty Association (LIGA) does not impact the court’s subject matter jurisdiction.
November 14, 2023
5th Circuit: Court Erred In Failing To Address Expert Testimony As To Roof Damage

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Nov. 13 held that a lower federal court erred when it did not address the insured’s expert testimony that his roof suffered functional damage and, therefore, there is a question of fact as to whether the insured’s damage was cosmetic or functional, reversing, vacating and remanding the lower court’s judgment in favor of a homeowners insurer in a coverage dispute stemming from the insurer’s denial of coverage for wind and hail damage.