Mealey's Insurance Pleadings : Mealey's : Legal News & Analysis

Mealey's Insurance Pleadings

April 28, 2023
Insured Says Judgment For Insurer On Bad Faith Claims In Water Damage Suit Was Error

SAN FRANCISCO — An insured claims in an appellant brief filed in the First District California Court of Appeal that a trial court erred in granting an insurer’s motion for summary judgment on her bad faith claims in a water damage coverage suit because the insurer waived its right to assert the policy’s provision requiring the insured to participate in an examination under oath before filing suit.
April 27, 2023
D&O Insurer Asks Court To Reconsider Ruling In Employee Embezzlement Coverage Suit

SAN DIEGO — A directors and officers liability insurer on April 26 moved for reconsideration or clarification of a California federal judge’s March 29 order that denied its motion for summary judgment and a homeowners association insured’s motion for partial summary judgment in a coverage lawsuit over a $688,931 judgment arising from employee embezzlement.
April 26, 2023
Court Erred In Rejecting Concurrent Cause Argument, Subrogee Insurer Argues

ATLANTA — The 11th Circuit U.S. Court of Appeals should reverse a federal district court’s grant of summary judgment in favor of an insurer in a coverage dispute over payment of policy claims made by a joint venture that oversaw a construction project at a water reclamation facility because a subrogee insurer is seeking to recover damages not solely for design defects, but for damages caused by a combination of policy-excluded design defects and “covered hydrostatic pressure,” the subrogee insurer argues in a reply brief filed in the appellate court.
April 24, 2023
Restaurant Owner Says Coverage Owed For Sewage Line Backup Damages

LOS ANGELES — An insured restaurant owner argues in a brief filed in the Second District California Court of Appeal that a trial court incorrectly granted summary judgment in favor of its insurer in a coverage dispute over water damages caused by a sewer line backup because issues of fact exist as to the cause of the backup and whether coverage was afforded for some of the damage.
April 24, 2023
Trustee Advises Federal Judge Of Sale Closure In $24M Insurance Policies Sale

FORT LAUDERDALE, Fla. — A liquidating trustee provided a Florida federal judge with notice of closing on the $24 million sale of trust policies related to a company in receivership after the judge approved the sale and a settlement between the trust and trust investment manager Acheron Capital Ltd.
April 19, 2023
U.S. Supreme Court Hears Arguments In FCA Dispute Over Overcharging Medicare

WASHINGTON, D.C. — Whistleblowers in consolidated qui tam actions told the U.S. Supreme Court in April 18 oral arguments that the Seventh Circuit U.S. Court of Appeals erred in affirming judgments for pharmacies accused of fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program for prescription drugs in violation of the False Claims Act (FCA) because the court failed to consider the relevance of the pharmacies’ subjective beliefs regarding whether they were overcharging the government programs.
April 17, 2023
Plaintiffs Resume Bid For Third-Party Complaint Against Reinsurers In Crash Case

MIAMI — Describing a bid for leave to file a third-party complaint against it as “rife with procedural, jurisdictional, and substantive defects,” a reinsurer urged a Florida court to deny the long-pending motion in a plane crash case in which settlements were reached over an $844 million default judgment.
April 17, 2023
Reinsurer’s Receiver Tells Delaware Court Of Negotiations With ‘Major Counterparty’

WILMINGTON, Del. — In an April 14 update to the Delaware Court of Chancery on addressing the impact of higher-than-expected mortality due to the COVID-19 pandemic and other causes on a proposed rehabilitation plan, the receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) reports pursuing negotiations with “a major counterparty."
April 14, 2023
Dismissal, Remand Argued In Dispute Over Arbitrator In Reinsurance Row

NEW YORK — Parties in a lawsuit seeking replacement of an arbitrator in a proceeding concerning two reinsurance contracts between Bermuda-based entities have filed competing motions in New York federal court, with one seeking remand and the other seeking dismissal.
April 14, 2023
Disability Claimant Appeals Ruling On Reduction Of Disability Income Benefits

SAN FRANCISCO — A disability claimant filed a notice of appeal to the Ninth Circuit U.S. Court of Appeal, seeking review of a California federal judge’s decision to grant a disability income insurer’s motion for judgment on the pleadings based on a finding that the insurer correctly reduced the claimant’s disability income benefits according to the terms of the disability income policy.
April 13, 2023
Pollution Exclusion Bars Coverage For Underlying Bodily Injury Suit, Insurer Says

WEST PALM BEACH, Fla. — A commercial lines insurer maintains in a suit filed in Florida federal court that it has no duty to defend or indemnify its insureds for an underlying suit alleging that exposure to diesel fumes caused the underlying plaintiff to contract bladder cancer because the policies’ pollution exclusion bars coverage.
April 12, 2023
Homeowners Sue Insolvent Insurer, Guaranty Association Over Hurricane Ida Damage

NEW ORLEANS — Louisiana homeowners sued an insolvent insurer and the Louisiana Guaranty Association (LIGA) as the purported guarantor for the insurer, asserting claims for breach of contract and breach of the duty of good faith and fair dealing related to the insurer’s alleged failure to compensate them for their damage from Hurricane Ida.
April 12, 2023
Airline Accuses Insurer Of Unfairly Denying Coverage In Passenger’s Coma Lawsuit

SAN FRANCISCO — An airline in a complaint filed in California federal court accuses its insurer of bad faith claims handling and violation of California’s unfair competition law (UCL) for improperly denying coverage for certain causes of action the airline faces in connection with a separate lawsuit brought by the family of a quadriplegic man who was left comatose after an incident while traveling.
April 10, 2023
Insured: Insurer Is Distracting N.Y. High Court From Controlling Policy Language

ALBANY, N.Y. — The owner and operator of numerous restaurants replied to a commercial property insurer’s response to its appeal of the First Department New York Supreme Court Appellate Division’s affirmation of a lower court’s dismissal of its coverage lawsuit arising from an alleged tens of millions of dollars in revenue loss prompted by the coronavirus pandemic, asking the New York Court of Appeals to reject the insurer’s attempt to distract it from the policy’s controlling language.
April 10, 2023
D&O Insurers Refute Global Medical Device Co.’s False Claims Act Coverage Suit

FORT MYERS, Fla. — Primary and excess directors and officers liability insurers filed an answer to a global medical device company insured’s breach of contract lawsuit seeking coverage for its underlying defense and settlement costs arising from an underlying False Claims Act lawsuit, arguing that the policies “speak for themselves.”
April 07, 2023
Smucker Seeks Coverage For Claims Alleging Injury From Contaminated Product

AKRON, Ohio — The J.M. Smucker Co. sued its general liability insurer in a California federal court for breach of contract and seeks a declaratory judgment as to coverage for claims against the company seeking damages for bodily injuries resulting from the alleged bacterial contamination of Smucker’s Jif-brand peanut butter.
April 06, 2023
Ruling Freeing Insurer Of Duty To Defend In Defects Suit Appealed To 9th Circuit

SEATTLE — Homeowners will appeal a federal judge’s ruling that an insurer did not breach its duty to defend a subcontractor in an underlying construction defects lawsuit based on a policy exclusion that barred coverage for the damages the homeowners sought in bringing the suit under a series of new construction exclusions, the homeowners stated in a notice of appeal filed in Washington federal court.
April 06, 2023
Texas Lab Agrees To Pay $5.9M In FCA Suit Over Unneeded Tests Billed To Medicare

BRUNSWICK, Ga. — The U.S. government and a qui tam relator stipulated to dismissal of their claims against a Texas lab after it agreed to pay at least $5.9 million to settle a suit alleging that the lab paid commissions to independently contracted marketers in violation of the Anti-Kickback Statute (AKS) and False Claims Act (FCA) and submitted for payment claims for unnecessary testing to federal government health care programs.
April 06, 2023
Provider, Insurer Debate Need For Review Of Texas Arbitration Payment Dispute

FORT WORTH, Texas — A medical provider told the Texas Supreme Court that nothing in the state’s out-of-network dispute process required or even permitted an arbitrator to look outside the 10 factors laid out by the law after an insurer told the court that the case presents only a question of “routine judicial deference.”
April 06, 2023
Parking Garage Owner Appeals Ruling In Design Defects Suit To D.C. Circuit

WASHINGTON, D.C. — A business appealed a grant of summary judgment in favor of commercial general liability (CGL) insurers in a coverage lawsuit stemming from crack repairs the business was required to make on structural supports in a parking garage based on faulty design and construction of the garage, according to a notice of appeal the business filed in District of Columbia federal court.
April 06, 2023
Plaintiffs Drop Negligence, UCL Suit Against Marketer Over Alleged Scheme

SAN DIEGO — Saying the defendant didn’t file an answer or a motion for summary judgment, the plaintiffs in a putative class suit alleging that they were sold counterfeited and nonexistent PregnancyCare insurance policies under “supposed captive reinsurance programs” filed a notice of voluntary dismissal without prejudice in California federal court.
April 06, 2023
Parties Dispute Reconsideration Of Ruling On Alleged Damages Paid By Reinsurers

EAST ST. LOUIS, Ill. — Arguing that an Illinois federal court made two errors in a suit over alleged legal malpractice, an insurer moved for reconsideration of a partial summary judgment ruling that it cannot recover alleged damages paid by its reinsurers; the defendants said in opposition that the insurer “tries to manufacture an untimely procedural defense based upon an inapplicable procedural rule and inapplicable case law.”
April 06, 2023
Insurer Makes No Showing Why Default Should Be Overturned, Contractor Says

FLORENCE, S.C. — A South Carolina federal judge should deny a motion for relief from default judgment and to set aside entry of default filed by an insurer in a contractor’s coverage dispute stemming from water intrusion and other construction defect issues at a mixed-use development project because the insurer failed to provide a “satisfactory explanation for the default much less establish the ‘mistake, inadvertence, excusable neglect, or surprise’” as required, the contractor argues in an opposition brief.
April 05, 2023
Reinsurer In Asbestos Coverage Liabilities Row Notifies Court Of Liquidation Order

OMAHA, Neb. — Parties in a federal suit in Nebraska against reinsurers over the $157.2 million settlement that National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures have notified the court of developments in two other proceedings, including an order of liquidation entered against a defendant.
April 05, 2023
Class Settlement Of Up To $117.7M Proposed In Life Insurance Cost Increase Suits

PHILADELPHIA — Plaintiffs challenging cost of insurance (COI) increases on universal life insurance policies have asked a Pennsylvania federal court to consolidate two cases for settlement, preliminarily certify a settlement class and preliminarily approve a settlement that includes a fund of up to $117.75 million and a five-year COI rate increase freeze.