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Mealey's Insurance

May 22, 2023
Motion To Amend Complaint In Toxic Emissions Suit Denied; Bad Faith Claims Not Ripe

MIAMI — A Florida federal judge denied an insured’s motion for leave to amend its complaint to add claims for statutory and common-law bad faith against its insurer in a coverage dispute arising out of toxic emissions created by the insured’s practice of sugarcane burning after determining that the bad faith claims are not yet ripe as the court has not resolved the issue of damages.
May 19, 2023
Excess Insurer’s Policies Provide Only Duty To Indemnify, Not Defend, Judge Says

RIVERSIDE, Calif. — An excess insurer’s policies only require the insurer to indemnify its insured for covered claims and does not require the insurer to defend against claims, a California federal judge said in partly granting the excess insurer’s motion for summary judgment in a groundwater contamination coverage suit.
May 18, 2023
Insurer Says No Coverage Due For Costs Incurred As A Result Of Oil Pipeline Rupture

DALLAS — An insured is not entitled to coverage for cleanup and remediation costs incurred as a result of a crude oil pipeline rupture because the excess policy at issue contains a pollution endorsement that bars coverage for the costs incurred by the insured, a second-layer excess liability insurer maintains in a complaint filed in Texas federal court.
May 18, 2023
Insurer Says District Court Erred In Finding Bacteria Exclusion Is Ambiguous

RICHMOND, Va. — A district court erred in finding that a primary insurer owes a duty to defend its insured against an underlying suit arising out of exposure to Legionella bacteria at an insured hotel because the phrase “good or product intended for bodily consumption” as used in the policy’s bacteria exclusion is not ambiguous, the primary insurer contends in its appellant brief filed in the Fourth Circuit U.S. Court of Appeals.
May 18, 2023
5th Circuit Panel Denies Panel Rehearing In Mold Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals denied a petition for panel rehearing filed by insureds and refused to reconsider its finding that a mold exclusion in a homeowners policy bars coverage for the insureds’ mold damages.
May 16, 2023
Insurer Does Not Oppose 1 Of 3 Stay Requests In Asbestos Liabilities Row

OMAHA, Neb. — After three defendants cited Pennsylvania liquidation proceedings in asking a Nebraska federal court for stays in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures, NICO says in a May 15 filing that it does not oppose a stay against one of the defendants.
May 16, 2023
Umbrella Insurer Says 1 Policy Limit Applies For Environmental Claims

DETROIT — An umbrella liability insurer filed a motion for partial summary in Michigan federal court, contending that its three-year policy includes only one $5 million policy limit for all three years and not three separate $5 million limits if it is found to owe coverage for underlying environmental contamination suits filed against the insured.
May 15, 2023
Federal Magistrate Judge Denies Motion For Entry Of Default In Water, Mold Suit

HARRISBURG, Pa. — A Pennsylvania federal magistrate judge denied a homeowners insurer’s motion for entry of default in a suit seeking a coverage declaration for water and mold damages and, instead, granted the insureds’ motion for an extension of time to file an answer to the insurer’s declaratory judgment complaint.
May 15, 2023
No Coverage Owed For Asbestos Bodily Injury Suit Based On Untimely Notice

NEWARK, N.J. — An insured seeking coverage for an underlying asbestos bodily injury suit is not entitled to coverage under primary and excess policies because the insured breached the policies’ notice provisions by failing to notify its insurers of the underlying lawsuit until after a jury verdict was entered, a New Jersey federal judge said in granted the insurers’ motion for summary judgment.
May 11, 2023
Ohio High Court To Consider Damages Issue In Lead Paint Abatement Suit

COLUMBUS, Ohio — The Ohio Supreme Court accepted review of state appellate court’s ruling that an insured’s obligation to contribute to a lead paint abatement fund constitutes damages under the applicable insurance policies.
May 11, 2023
Parties Dispute Coverage Issues In Groundwater Contamination Suit

RIVERSIDE, Calif. — In reply briefs filed in support of competing motions for summary judgment in a groundwater contamination coverage suit, an insured and its excess insurer seek a ruling from a California federal court on whether judgment should be entered on the insured’s breach of contract claim arising out of the insurer’s termination of coverage based on the insurer’s position that coverage is owed for only one occurrence under the applicable policies.
May 09, 2023
Citing Liquidation Order, Reinsurer Seeks Stay Of Claims In Liabilities Row

OMAHA, Neb. — Arguing that two abstention doctrines apply because of Pennsylvania liquidation proceedings, a reinsurer moved in Nebraska federal court to stay claims against it in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures.
May 09, 2023
Kaiser Insurer Petitions For Review Of 4th Circuit’s Ruling On Lack Of Standing

WASHINGTON, D.C. — The Fourth Circuit U.S. Court of Appeals erred in veering from the “plain text” of the U.S. Bankruptcy Code, which allows a “‘party in interest’” to “‘appear and be heard on any issue’” in a Chapter 11 case, the primary insurer for debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. tells the U.S. Supreme Court in a petition challenging the Fourth Circuit’s finding that it lacks standing to oppose the debtors’ confirmed plan of reorganization.
May 05, 2023
Insurer Says No Coverage Due For Tenant’s Suit Arising Out Of Legionnaire’s Disease

LOUISVILLE, Ky. — No coverage is afforded for an underlying bodily injury suit arising out of an apartment tenant’s contraction of Legionnaire’s disease while residing in an insured apartment building because the policy at issue excludes coverage for bodily injury claims related to the exposure to any fungi, wet rot, dry rot or bacteria, the insurer says in a complaint filed in Kentucky federal court.
May 05, 2023
Insureds Seek Panel Rehearing In Mold Damage Coverage Suit Before 5th Circuit

NEW ORLEANS — A panel rehearing of the Fifth Circuit U.S. Court of Appeals’ finding that a mold exclusion in a homeowners policy bars coverage is warranted because the mold damages are covered under the policy’s exception to the mold exclusion since water intrusion, which is a covered cause of loss under the policy, caused the mold growth in the insureds’ home, the insureds say in a petition for panel rehearing.
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 03, 2023
Insurer Says District Court Correctly Found No Coverage For Mold, Water Damage

ATLANTA — The 11th Circuit U.S. Court of Appeals should affirm a district court’s ruling that no coverage is owed for mold damage discovered in an insured hotel because the hotel has a long and documented history of water leaks and mold growth due to faulty construction that incepted prior to the applicable policy period, the insurer says in its appellee brief.
May 03, 2023
Polychlorinated Biphenyls Exclusion Bars Some Costs Incurred By Insured, Judge Says

SOUTH BEND, Ind. — An Indiana federal judge partially granted an insurer’s motion for reconsideration and reversed a prior decision on the applicability of the policy’s polychlorinated biphenyls (PCB) exclusion after determining that the exclusion is enforceable as it applies to the cleanup of damages related to PCBs because the insurer’s policy specifically stated that insurer had the right to include exclusions in its policy that differed from the lead policy, a layered multisite, multistate insurance policy.
May 01, 2023
Pollution Exclusion Bars Coverage For Noxious Odors Suit, Insurers Maintain

TYLER, Texas — No coverage is owed for an underlying suit alleging damages caused by the release of noxious odors by an insured fertilizer plant because the policies’ exclusions for pollution and expected an intended injury bar coverage, insurers say in a complaint filed in Texas federal court.
May 01, 2023
Pollution Exclusion Does Not Bar Coverage For Cleanup Of Blood, Feces, Panel Says

DAYTONA BEACH, Fla. — A trial court correctly found that a policy’s pollution exclusion does not bar coverage for the cleanup of blood and feces in an insured’s shed because blood does not qualify as a pollutant pursuant to the policy’s definition of a pollutant, the Fifth District Florida Court of Appeal said.
May 01, 2023
5th Circuit To Review Challenge To Arbitrability Of $7M Hurricane Ida Claims

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeal has granted an unopposed request to review a federal court’s ruling compelling arbitration of a dispute over an insured’s claims for millions of dollars in damages caused by Hurricane Ida and for bad faith against its foreign and domestic insurers, after the insured and insurers both stated that the arbitrability of such claims is the subject of a “split among the Louisiana federal district courts.”
April 28, 2023
Parties Stipulate To Withdrawal Of Reinsurer’s Appeal Of Defense Costs Ruling

NEW YORK — An appeal to the Second Circuit U.S. Court of Appeals in a long-running dispute over defense costs for asbestos liabilities has been withdrawn by stipulation of the parties.
April 28, 2023
Claims Fail In Water Damage, Asbestos Contamination Coverage Suit, 9th Circuit Panel Says

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s entry of summary judgment in favor of a property insurer, agreeing with the district court’s finding that the insured failed to meet her burden of proving that the insurer breached its contract or acted in bad faith in its handling of her claim for water damage and asbestos contamination.
April 28, 2023
Negligence Claim Against Insurer In Water Damage Coverage Suit Cannot Proceed

PROVIDENCE, R.I. — A negligence claim alleged against a homeowners insurer in a coverage dispute over water damage cannot proceed because the insured failed to show that the insurer owed a duty of care to the insured and breached its duty of care, a Rhode Island federal judge said.