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

Mealey's Catastrophic Loss

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.
November 14, 2023
Judge Tosses Hurricane Ida Suit Against Insurer, Cites No Basis For Jurisdiction

NEW ORLEANS — A Louisiana federal judge dismissed a breach of contract suit filed by a homeowner against his now-insolvent insurer for failure to adequately compensate the homeowner for purported damage from Hurricane Ida, finding that the court no longer has subject matter jurisdiction after the homeowner named the Louisiana Insurance Guaranty Association (LIGA) as a defendant.
November 13, 2023
Insured Files Supplemental Authority On Applicability Of Pollution Exclusion

SAN FRANCISCO — A few days before oral arguments were held in the Ninth Circuit U.S. Court of Appeals in a dispute over the applicability of the pollution exclusion, the insured, seeking coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris, filed a notice of supplemental authority, urging the Ninth Circuit to consider a ruling by the Second District California Court of Appeal in support of its argument that the pollution exclusion does not bar coverage for the underlying suit.
November 13, 2023
Insurer Again Seeks Rehearing In Appraisal Dispute Over Hurricane Irma Damage

ATLANTA — An insurer on Nov. 10 filed a second petition for rehearing en banc challenging the 11th Circuit U.S. Court of Appeals’ ruling that a lower federal court’s order compelling appraisal and staying a Hurricane Irma coverage dispute pending the appraisal is an interlocutory order that is not immediately appealable under Title 28 U.S. Code Section 1292(a)(1), 28 U.S.C. § 1292(a)(1), or under the Federal Arbitration Act (FAA).
November 13, 2023
Reserve Information In COVID-19 Coverage Suit Not Relevant To Bad Faith Claim

SANTA ANA, Calif. — A California federal magistrate judge denied an insured’s motion to compel documents related to the reserve set by an insurer in response to the insured’s claim for business losses sustained in the wake of the COVID-19 pandemic after determining that the reserve information is not relevant to the insured’s bad faith claim because only a nominal reserve was set by the insurer and no changes were made to the reserve since the coverage claim was filed.
November 10, 2023
11th Circuit Denies As Moot Insurer’s Petition For Panel Rehearing In Irma Dispute

ATLANTA — On its own motion, the 11th Circuit U.S. Court of Appeals vacated an opinion, entered a new opinion and denied as moot an insurer’s petition for panel rehearing in an appraisal dispute over Hurricane Irma damage.
November 08, 2023
Judge Modifies Class In Driver’s Suit Against GEICO For Unfair COVID Premiums

SAN FRANCISCO — A California federal judge on Nov. 7 granted an insured’s motion to modify a previously certified class of automotive policy holders in the insured’s suit claiming that GEICO violated California’s unfair competition law (UCL) by profiting from a premium giveback program initiated during the COVID-19 pandemic, with the judge agreeing based on evidence produced to change the class time period.
November 06, 2023
4th Circuit Tosses Appeal In COVID-19 Coverage Suit After Parties Agree To Dismiss

RICHMOND, Va. — One day after an insured and its insurer filed a stipulation of voluntary dismissal, the Fourth Circuit U.S. Court of Appeals dismissed the insured’s appeal of a Maryland federal court’s denial of its motion for leave to file a second amended complaint to address the standard for physical loss that was provided by the Maryland Supreme Court in answer to a certified question in a COVID-19 coverage dispute.
November 06, 2023
No Coverage Owed For Roof Collapse Following Thunderstorm, 5th Circuit Affirms

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Nov. 3 affirmed a lower federal court’s summary judgment ruling in favor of an insurer in a building owner insured’s breach of contract and bad faith lawsuit seeking coverage for damage caused by a collapsed roof following a thunderstorm, rejecting the insured’s contention that its principal’s deposition testimony created a genuine issue of material fact regarding whether the damage was caused by wind or rain.
November 03, 2023
Breach Of Contract, Bad Faith Suit Will Remain In Louisiana Federal Court

NEW ORLEANS — An insured’s breach of contract and bad faith suit arising out of a hurricane damage coverage dispute will remain in federal court because the property insurer met its burden of showing that the federal jurisdictional amount in controversy requirement has been exceeded, a Louisiana federal judge said in denying the insured’s motion to remand to state court.
November 03, 2023
Insured’s Suit Seeking Coverage For Hurricane Damages Cannot Survive, Judge Says

LAKE CHARLES, La. — A Louisiana federal judge dismissed an insured’s suit against her homeowners insurer after determining that the breach of contract claim cannot survive based on the policy’s 24-month suit limitations provisions and that the bad faith and negligent infliction of emotional distress claims cannot survive because the insured failed to provide any support for the claims.
November 02, 2023
Hurricane Coverage Row With Insolvent Insurer Dismissed After Counsel Suspended

LAKE CHARLES, La. — A Louisiana federal judge adopted a federal magistrate judge’s report and recommendation advising dismissal of a homeowner’s hurricane coverage suit against her now-insolvent insurer when the homeowner failed to appear following the court’s suspension of her legal counsel due to the firm’s alleged misconduct in handling hurricane coverage cases.
November 02, 2023
Louisiana Majority Refuses To Disturb Reversal Of Default Judgment In Ida Dispute

NEW ORLEANS — A majority of the Louisiana Supreme Court denied insureds’ petition for a writ of certiorari in a Hurricane Ida coverage dispute, standing by its reversal and remand of a default judgment awarding the insureds $694,072.63 in outstanding sums purportedly due under a homeowners insurance policy, penalties, attorney fees and general damages.
October 30, 2023
Force Majeure Provision Does Not Excuse Rent Payment, Panel Says In Coronavirus Suit

SANTA ANA, Calif. — A California appeals panel affirmed a lower court’s ruling that an appellant cannot recoup rent payments for periods during which it was prevented from operating its indoor health and fitness facility due to the government orders in response to the coronavirus pandemic, rejecting the appellant’s argument that the commercial lease's force majeure provision excused it from paying rent.
October 26, 2023
Policy’s Business Income Coverage Language Is Ambiguous, Federal Judge Rules

LOS ANGELES — A California federal judge partly denied a commercial property insurer’s motion for summary judgment in a breach of contract lawsuit arising from a now defunct restaurant’s suspension of operations, finding that the policy’s business income coverage language is ambiguous.
October 25, 2023
8th Circuit Refuses To Reconsider Remand Of Coronavirus Coverage Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Oct. 24 denied an insurer’s petition seeking rehearing or rehearing en banc of its Sept. 11 ruling that reversed and remanded a coronavirus coverage ruling for an Iowa federal court to determine whether federal diversity jurisdiction exists.
October 25, 2023
Panel Remands For Entry Of Take-Nothing Judgment In Hurricane Harvey Coverage Suit

BEAUMONT, Texas — A Texas appeals panel reversed a lower court’s summary judgment ruling in favor of insureds in a coverage lawsuit arising from Hurricane Harvey damage and remanded for the lower court to enter a take-nothing judgment in favor of the insurer.
October 23, 2023
Majority Substitutes Opinion, Denies Panel Rehearing As Moot In Irma Coverage Suit

ATLANTA — A majority of the 11th Circuit U.S. Court of Appeals on its own motion on Oct. 20 vacated a May 31 opinion, substituted a new opinion and denied as moot an insurer’s motion for panel rehearing en banc, standing by its finding that a lower federal court’s order compelling appraisal and staying a Hurricane Irma coverage dispute pending the appraisal is an interlocutory order that is not immediately appealable under Title 28 U.S. Code Section 1292(a)(1), 28 U.S.C. § 1292(a)(1), or under the Federal Arbitration Act.
October 23, 2023
Insureds Seek Dismissal In Hurricane Coverage Row Involving Liquidated Insurer

ST. CROIX, Virgin Islands — Homeowners notified a federal court in the Virgin Islands that because one of the insurer defendants was never served, the case against it should be dismissed in the insureds’ Hurricane Maria coverage suit involving an insurer in liquidation.