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

Mealey's Catastrophic Loss

May 23, 2023
Insolvent Insurer Substituted With Guaranty Association In Hurricane Coverage Row

MONROE, La. — A Louisiana federal magistrate judge granted an insured’s request to substitute its insurer that was ordered into liquidation by a Florida state court with Louisiana Insurance Guaranty Association (LIGA) in a breach of contract suit against the insurer seeking coverage for purported hurricane damage to commercial property.
May 22, 2023
Panel Affirms Dismissal Of Consolidated Class Actions Seeking Coronavirus Coverage

SEATTLE — In three rulings, the Ninth Circuit U.S. Court of Appeals on May 19 affirmed a Washington federal judge’s ruling that granted insurers’ motion to dismiss consolidated class actions brought by western Washington businesses seeking coverage for lost income stemming from the coronavirus pandemic, agreeing that COVID-19 does not cause the physical loss or damage to the insureds’ property that is required to trigger coverage.
May 22, 2023
Homeowners Insurer Did Not Act In Bad Faith In Denying Water, Mold Damage Claim

NEW ORLEANS — A homeowners insurer did not act in bad faith in handling an insured’s water and mold damage claim following damages sustained as a result of Hurricane Ida because the evidence supports a finding that the insurer had a reasonable basis to deny coverage for the insured’s damages, a Louisiana federal judge said May 19 in granting the insurer’s motion for summary judgment on the bad faith claim.
May 17, 2023
Insurance Breach Of Contract Claims Survive After Judge Allows Causation Expert

MOBILE, Ala. — A federal judge in Alabama denied an insurer’s motion to exclude an expert retained by homeowners in a policy coverage dispute after finding that his testimony met the requirements of Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals Inc.
May 16, 2023
11th Circuit: Fact Issue Exists As To Whether Insureds’ Breach Prejudiced Insurer

ATLANTA — The 11th Circuit U.S. Court of Appeals vacated a federal court’s denial of insureds’ motion for summary judgment in a Hurricane Irma coverage dispute, finding that there is a dispute of fact regarding whether the insureds’ breach of their policy’s proof-of-loss requirement prejudiced the insurer.
May 15, 2023
Oregon High Court Declines Panel’s Certified Question In COVID-19 Coverage Suit

SALEM, Ore. — The Oregon Supreme Court declined to accept the Ninth Circuit U.S. Court of Appeals’ certified question asking whether “the actual or potential presence of the COVID-19 virus on an insured's premises constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
May 15, 2023
Parties Reach Settlement In Coverage Dispute Over Wildfire Damage To Napa Wineries

SAN FRANCISCO — An insured and its insurer filed a notice in a California federal court indicating that they have settled the insured’s lawsuit seeking coverage for property damage to its Napa County wineries caused by two wildfires.
May 15, 2023
Broadway Owner, Insurers Voluntarily Dismiss Federal Coronavirus Coverage Suit

NEW YORK — The owner and operator of five Broadway theaters and its insurers filed a stipulation notifying a New York federal court that they are voluntarily dismissing the insured’s breach of contract coverage lawsuit arising from the coronavirus pandemic.
May 12, 2023
N.H. High Court Reverses Ruling In Hotel Insureds’ Favor In COVID-19 Coverage Suit

CONCORD, N.H. — The New Hampshire Supreme Court on May 11 held that the presence of SARS-CoV-2 in the air or on surfaces at insureds’ premises fails to satisfy a property insurance policy’s requirement of “loss or damage” or “direct physical loss of or damage to property” under Mellin v. Northern Security Insurance Co., reversing a lower court’s grant of partial summary judgment in favor of the insureds in a coronavirus coverage dispute.
May 12, 2023
California Panel: Insurer Did Not Act In Bad Faith In Windstorm Coverage Dispute

SANTA ANA, Calif. — A California appeals court on May 11 held that an insurer did not act in bad faith in its handling of an insured’s windstorm damage claim, rejecting the insured’s arguments on appeal that the insurer failed to thoroughly investigate his property damage and misrepresented his rental coverage.
May 10, 2023
Federal Judge Denies Insurer’s Summary Judgment Motion In Hurricane Damage Suit

BEAUMONT, Texas — A Texas federal judge adopted a recommendation to deny a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims, noting that the magistrate judge correctly found that issues of fact exist regarding whether additional coverage is owed for hurricane damages sustained to the insureds’ home and whether the insurer’s denial of additional damages was reasonable.
May 09, 2023
California Jury Returns Verdict In Insurer’s Favor In COVID-19 Coverage Suit

LOS ANGELES — A California jury returned a special verdict in favor of a commercial property insurer in insureds’ breach of contract coverage lawsuit arising from the coronavirus pandemic, finding that SARS-CoV-2 did not cause any direct physical loss or damage to the insureds’ hotel on or before June 1, 2020.
May 09, 2023
Federal Magistrate Signs Protective Order In Bobcat Wildfire Coverage Dispute

LOS ANGELES — A federal magistrate judge in California signed a stipulated protective order in a coverage dispute over underlying lawsuits arising from the Bobcat Wildfire after the parties announced that they did not resolve their dispute following court-ordered mediation.
May 08, 2023
5th Circuit Affirms Dismissal Of New Orleans Hotelier’s Coronavirus Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 5 affirmed a lower federal court’s dismissal of a hotel owner’s breach of contract lawsuit seeking coverage for its lost income after it was temporarily shut down in response to the coronavirus pandemic, agreeing with the lower court that the insured failed to demonstrate a “tangible” loss to trigger coverage.
May 08, 2023
Yacht Insurer’s Motion For Summary Judgment Denied On Suit Limitations Provision

FORT LAUDERDALE, Fla. — A Florida federal judge determined that a yacht insurer’s motion for summary judgment on the issue of whether a policy’s one-year suit limitation must be denied because a question of fact exists as to whether the limitations period was extended based on the insurer’s adjustment of the claim.
May 05, 2023
Louisiana Majority: Court Erred In Denying Insurance Agent’s Exception Of Peremption

LAKE CHARLES, La. — A majority of a Louisiana appeals court panel held that a lower court erred in finding that an insured’s professional negligence claims against an insurance agent and his company are not perempted under state law, reversing but noting, along with a judge who filed a separate concurrence, that the agent’s conduct in obtaining business interruption/extra expense (BI/EE) coverage that was “significantly insufficient” to meet the insured’s needs is “reprehensible and not excused by the result of this litigation.”
May 05, 2023
Insurance Guaranty Association Intervention Denied In Hurricane Coverage Suit

LAKE CHARLES, La. — A Louisiana federal magistrate judge denied the Louisiana Insurance Guaranty Association’s (LIGA’s) motion to intervene in a homeowner’s suit against a now-insolvent insurer seeking coverage for hurricane damage to her home, finding that LIGA “is not an intervenor of right” because LIGA’s statutory rights as an intervenor did not apply until after the insurer was deemed insolvent, which occurred after the suit was filed.
May 05, 2023
Insurer Asks Texas Appeals Court To Reverse Ruling In Storm Damage Coverage Suit

EDINBURG, Texas — An insurer asked a Texas appeals court to reverse a lower court’s summary judgment ruling in favor of an insured in a coverage dispute over storm damage, arguing that the lower court improperly granted the insured no-evidence summary judgment on whether it filed its storm damage claim within the policy’s one-year coverage period.
May 04, 2023
Insurer’s Declaratory Relief Suit Over Building Collapse Coverage Dismissed

ALEXANDRIA, La. — Ruling only that he concurred with a federal magistrate judge’s recommendation, a federal judge in Louisiana issued a judgment dismissing an insurer’s declaratory relief action against its insured contractor and a property owner in a coverage dispute stemming from the collapse of the property owner’s building during renovation work.
May 04, 2023
Church Seeks Costs After $170,000 Verdict In Water Damage Coverage Suit

MOBILE, Ala. — On the heels of a nearly $170,000 judgment entered in its favor in an insurance dispute over an insurer’s handling of a property damage claim after Hurricane Sally, a church is seeking an additional $7,998.74 in costs litigating the action, according to a bill of costs the church submitted in Alabama federal court.
May 04, 2023
Pollution, Contamination Exclusion Bars Coverage For Virus Claims, Judge Reiterates

PHILADELPHIA — A pollution and contamination exclusion included in primary and excess all-risk policies bars coverage for an insured hotel operator’s business losses sustained in the wake of the COVID-19 pandemic, a Pennsylvania judge said in denying the insured’s motion for reconsideration and rejecting the insured’s argument that the exclusion applies only to traditional environmental pollution claims.
May 04, 2023
Breach Of Contract, Bad Faith Claims Fail Against Insurer In COVID-19 Coverage Suit

NEW ORLEANS — Breach of contract and bad faith claims alleged against a commercial property insurer cannot proceed because the insureds failed to show that their properties sustained a direct physical loss as a result of governmental shutdown orders issued in the wake of the COVID-19 pandemic, a Louisiana federal judge said in granting the insurer’s motion to dismiss.
May 03, 2023
Bad Faith Claim Cannot Proceed In Tornado Damage Coverage Dispute, Judge Says

ANNISTON, Ala. — A claim for bad faith alleged against a homeowners insurer and arising out of a coverage dispute for tornado damages cannot proceed because the evidence does not support a finding that the insurer intentionally failed to conduct an inspection of the damages and that the insurer did not have a reasonable basis to deny coverage for additional damages, an Alabama federal judge said in partially granting the insurer’s motion for summary judgment.
May 03, 2023
Panel: Insureds Fail To Allege Physical Alteration To California Movie Theaters

LOS ANGELES — A California appeals panel held that movie theater owner insureds have failed to allege a covered loss under their “‘all risk’” commercial property and general liability insurance policy because they have not demonstrated a physical alteration of their insured property, affirming a lower court’s grant of the insurer’s motion for judgment on the pleadings in the insured’s breach of contract and bad faith lawsuit arising from the coronavirus pandemic.
May 03, 2023
Partial Grant Issued To Insurer Over Fraud Alleged In Bad Faith Fire Dispute Claim

DENVER — A Colorado federal judge granted in part an insurer’s summary judgment motion in a homeowner’s bad faith and breach of contract suit against it after the insurer denied a claim for coverage following an electrical fire, finding that the motion is granted as to the bad faith and unreasonable denial claims because the insurer’s “conduct was reasonable” when it deemed her policy void for failing to tell the insurer that she no longer resided at the property.