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

Mealey's Catastrophic Loss

October 13, 2023
Policy’s 2-Year Prescriptive Period Provision Not Applicable To Bad Faith Claim

LAKE CHARLES, La. — A bad faith claim alleged by insureds against their homeowners insurer can proceed because the policy’s two-year prescriptive period applies only to the insureds’ breach of contract claim, a Louisiana federal judge said after determining that the bad faith claim is subject to a 10-year prescriptive period based on precedent set forth by the Louisiana Supreme Court.
October 13, 2023
Reconsideration Denied In Bid To Substitute Guaranty Association For Insurer

NEW ORLEANS — A Louisiana federal judge denied a request to reconsider an order denying substituting a now-insolvent insurer with the Louisiana Insurance Guaranty Association (LIGA) in a suit seeking coverage for purported damage to a home caused by Hurricane Ida, finding that there are no obligations transferred from an insolvent insurer to LIGA permitting it to “step into the shoes of the insolvent insurer.”
October 10, 2023
California Federal Judge Finds Contractor Cannot Bring Bad Faith Claim

LOS ANGELES — Because there has been no excess judgment in underlying arbitration proceedings stemming from a general contractor’s alleged failure to properly secure a building under construction in advance of a hurricane, the contractor cannot state a claim against a commercial general liability insurer for bad faith, a federal judge in California ruled in granting the insurer’s motion for partial summary judgment on the claim.
October 10, 2023
Citing Mudpie, 9th Circuit Affirms Virus Exclusion Bars Coverage For COVID-19 Losses

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of insureds’ lawsuit seeking coverage for their losses arising from the coronavirus pandemic and subsequent governmental orders, finding that, as in Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., the insureds failed to plausibly assert that “the efficient cause” of their losses was anything other than the spread of the COVID-19 virus throughout California.
October 06, 2023
Panel Affirms Dismissal Of Coverage Suit For Insureds’ Failure To Comply With Rule

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 5 affirmed a lower federal court’s dismissal without prejudice of a coverage dispute over the insureds’ claims for tornado and wind and hailstorm damage, finding that the lower court did not abuse its discretion in finding that the insureds failed to comply with a local rule that required the retention of local counsel.
October 06, 2023
Hurricane Coverage Suit Remanded After Guaranty Association Added As Defendant

NEW ORLEANS — A Louisiana federal judge remanded to state court a homeowner’s hurricane coverage suit against his now-insolvent insurer, finding that remand is appropriate because adding the Louisiana Insurance Guaranty Association (LIGA) as a defendant in the amended complaint defeats subject matter jurisdiction.
October 06, 2023
5th Circuit Remands Coverage Suit Over $1M Settlement Of Canceled Music Festival

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 5 remanded an insured’s lawsuit seeking coverage for an underlying $1 million class action settlement arising from its refusal to refund ticket sales for the South by Southwest festival that was canceled due to the coronavirus pandemic, finding that it cannot reach the merits of the appeal because the parties have not established diversity of citizenship.
October 05, 2023
Waiver Provision Bars Insurer’s Equitable Subrogation Claim, California Panel Says

LOS ANGELES — A California appeals panel affirmed a lower court’s summary judgment ruling in favor of Southern California Edison Co. (SCE) in an insurer’s equitable subrogation lawsuit alleging that a wildfire that resulted in $25 million in paid claims was the sole result of SCE’s negligence, finding that the subcontract’s waiver provision barred the insurer’s claims.
October 04, 2023
Insurer Asks 8th Circuit To Reconsider Remand Of Coronavirus Coverage Suit

ST. LOUIS — An insurer seeks rehearing or rehearing en banc of the Eighth Circuit U.S. Court of Appeals ruling that reversed and remanded a coronavirus coverage lawsuit for an Iowa federal court to determine whether federal diversity jurisdiction exists, arguing that the panel “expressly rejected the principle of federal law that parties are bound by their concessions of jurisdictional facts.”
October 03, 2023
California Panel Reverses Ruling In Insurers’ Favor In Coronavirus Coverage Suit

LOS ANGELES — A California appeals panel on Oct. 2 reversed and remanded a lower court’s order granting a group of insurers’ motion for judgment on the pleadings in a real estate investment firm’s coronavirus coverage dispute, rejecting the insurers’ argument that the pollution exclusion barred coverage.
October 02, 2023
Federal Judge Rules For Insurer In Landlord’s Coronavirus Coverage Suit

NEW YORK — A federal judge in New York on Sept. 29 granted a commercial property insurer’s motion for summary judgment in a coronavirus coverage suit, noting that the Second Circuit U.S. Court of Appeals has held in 11012 Holdings, Inc. v. Sentinel Ins. Co. that, pursuant to New York law, the unambiguous words “physical loss or damage” “require actual physical loss of or damage to the insured's property.”
September 29, 2023
Federal Judge Remands Hurricane Ida Coverage Dispute For Lack Of Jurisdiction

NEW ORLEANS — A Louisiana federal judge remanded to state court homeowners’ bad faith and breach of contract suit against their now-insolvent insurer, which they allege failed to pay for damages resulting from Hurricane Ida, finding that the court lacks jurisdiction because the homeowners added the Louisiana Insurance Guaranty Association (LIGA) as a defendant in their amended complaint.
September 29, 2023
Negligence, Bad Faith Claims Cannot Proceed Against Homeowners Insurer, Judge Says

DENVER — Negligence and bad faith claims against a homeowners insurer cannot proceed because the insureds failed to show that they specifically requested that a homeowners policy, rather than a dwelling policy, be issued for their primary home in Colorado that was destroyed in a wildfire, a Colorado federal judge said in granting the insurer’s motion to dismiss.
September 28, 2023
Panel: Insured Fails To Satisfy Delaware’s Long-Arm Statute In COVID-19 Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Sept. 27 affirmed a lower federal court’s dismissal of a regional sports television network insured’s breach of contract and declaratory judgment lawsuit seeking coverage for its losses arising from the coronavirus pandemic, rejecting the insured’s argument that Delaware’s long-arm statute subsection (c)(1) confers personal jurisdiction over the insurer.
September 27, 2023
Music Festival Organizer Seeks $2.8M For Losses Arising From Tuscany Storm

PHILADELPHIA — An insured that organized a three-day music festival in Tuscany sued its insurer for breach of contract, declaratory relief and bad faith in a Pennsylvania federal court, seeking coverage under an Event Cancellation Policy for its alleged $2.8 million in losses caused by severe weather.
September 27, 2023
Judge Again Denies Insureds’ Motion To Certify Class In Tornado Coverage Dispute

CHICAGO — For the second time in a little over a year, a federal judge in Illinois denied insureds’ motion for class certification in their lawsuit alleging that their homeowners insurer systematically underestimated and underpaid their structural and personal property damage that was caused by a June 22, 2015, tornado, finding that the insureds “plainly failed to distill an actionable common question” to warrant class certification.
September 27, 2023
Judge Grants Motion To File Amended Complaint In Hurricane Ida Coverage Row

NEW ORLEANS — A Louisiana federal judge granted homeowners’ motion to file an amended complaint and add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in their breach of contract and bad faith suit against their now-insolvent insurer over its failure to cover purported damages caused by Hurricane Ida, finding no evidence that the motion to amend is “to defeat federal jurisdiction” and that because diversity jurisdiction no longer exists, the case must be remanded to state court.
September 26, 2023
Panel Affirms Demurrer In Entertainment Conglomerate’s Coronavirus Coverage Suit

LOS ANGELES — A California appeals panel affirmed a lower court’s ruling that sustained commercial property insurers’ demurer to an entertainment conglomerate insured’s complaint seeking coverage for its economic losses arising from the coronavirus, finding that, until the U.S. Supreme Court provides guidance in pending cases, it sides with the vast majority of courts that have ruled that direct physical loss or damage to property is a prerequisite for coverage.
September 25, 2023
Illinois Panel Affirms Ruling In Insurers’ Favor In Coronavirus Coverage Suit

CHICAGO — An Illinois panel on Sept. 22 affirmed a lower court’s grant of commercial property insurers’ motion to dismiss an insured’s lawsuit seeking coverage for its business income losses and extra expenses arising from the coronavirus, finding that no coverage was triggered because the insured failed to demonstrate that it incurred damage of a physical nature.
September 21, 2023
Florida Panel Reverses Order Denying Insurer’s Motion To Strike Expert Witness

WEST PALM BEACH, Fla. — A Florida appeals panel on Sept. 20 held that a lower court erred in admitting insureds’ expert testimony in a windstorm coverage dispute, reversing an order denying the insurer’s motion to strike the expert witness and remanding for a new trial.
September 20, 2023
Homeowner Sues Insolvent Insurer Over Failure To Cover Hurricane Damages

FORT MYERS, Fla. — A homeowner filed a breach of contract suit against his insolvent homeowners insurer, alleging that the insurer failed to compensate him for damages caused by Hurricane Ian.
September 19, 2023
Louisiana Panel Dismisses Appeal In Suit Arising From Hurricanes Zeta, Ida

NEW ORLEANS — A Louisiana appeals panel held that two judgments in a lawsuit arising from hurricanes Zeta and Ida property damage are neither final nor appealable, granting the Louisiana Division of Administration Office of Community Development’s (OCD) motion to dismiss the appeal.
September 19, 2023
Dismissal Granted In Multiple Hurricane Damage Suit Against Insolvent Insurer

LAKE CHARLES, La. — A Louisiana federal judge dismissed a homeowner’s breach of contract suit against a now-insolvent insurer over its failure to compensate for damages caused by two hurricanes, finding that the magistrate judge correctly determined in a report and recommendation that because the homeowner amended her complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant, the court lacks subject matter jurisdiction.
September 18, 2023
Nevada High Court Vacates Ruling Against Insurer In Coronavirus Coverage Suit

CARSON CITY, Nev. — Granting a commercial property insurer’s petition for writ of mandamus in a coverage dispute arising from the forced closure of a shopping mall in response to the coronavirus pandemic, the Nevada Supreme Court directed the lower court to vacate its order denying the insurer’s motion for summary judgment on the insured’s breach of contract and declaratory relief claims after finding that the insured’s evidence failed to create a genuine dispute of material fact regarding the existence of “direct physical loss or damage” to trigger coverage and that the policy’s pollution and contamination exclusion further barred coverage.
September 15, 2023
Motion To Add Guaranty Association Granted, Case Remanded In Hurricane Ida Suit

NEW ORLEANS — A Louisiana federal judge granted insured homeowners’ motion to file a supplemental complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a Hurricane Ida coverage suit against their now-insolvent insurer, finding a lack of evidence that the homeowners sought to amend their complaint to defeat diversity jurisdiction but that because it is defeated by adding LIGA, the case must be remanded to state court.