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Mealey's Insurance

February 16, 2024
New York High Court: Restaurateur Fails To Allege Direct Physical Loss Or Damage

ALBANY, N.Y. — The New York Court of Appeals on Feb. 15 held that the owner and operator of numerous restaurants failed to allege persistent contamination or total uninhabitability of its restaurants to trigger coverage for “direct physical loss or damage,” affirming the First Department New York Supreme Court Appellate Division’s affirmation of a lower court’s dismissal of the insured’s coverage lawsuit arising from an alleged tens of millions of dollars in revenue loss prompted by the coronavirus pandemic.
February 15, 2024
Liquidation Order Leads To Permanent Stay For 1 Defendant In Coverage Row

NEWARK, N.J. — All claims against one defendant in a suit in New Jersey federal court over environmental investigation and remediation have been permanently stayed because of a liquidation and injunction order issued by the Delaware Court of Chancery.
February 14, 2024
Claims Against LIGA Tossed In Asbestos Coverage Suit Involving Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted summary judgment to the Louisiana Insurance Guaranty Association (LIGA) and dismissed an asbestos liability suit against it, finding that the claims for asbestos-related lung cancer against LIGA, as the statutory obligor for a now-insolvent insurer, are not covered claims.
February 12, 2024
Insureds File Suit, Seek Coverage For Costs Incurred To Remediate Riverbank

SAN FRANCISCO — Insureds filed suit against their umbrella liability insurer in California federal court, alleging that the insurer breached its contract and acted in bad faith by relying on the policy’s pollution exclusion to deny coverage for costs incurred in remediating a riverbank.
February 12, 2024
11th Circuit Schedules Oral Arguments In Mold Coverage, Bad Faith Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals scheduled oral arguments for April 16 in a mold coverage suit involving an insured’s appeal of a district court’s ruling on breach of contract and bad faith claims and an insurer’s cross-appeal of the district court’s ruling on fraud and conspiracy counterclaims asserted by the insurer.
February 09, 2024
Insurer Petitions 9th Circuit For Panel Rehearing Of Pollution Exclusion Ruling

SAN FRANCISCO — A district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris should be affirmed because a panel majority of the Ninth Circuit U.S. Court of Appeals failed to consider two applicable California appellate decisions before concluding that the insurer’s pollution exclusion does not apply to toxic dust, an insurer argues in its petition for panel rehearing.
February 08, 2024
Dismissal Granted In Asbestos Liability Case Involving Guaranty Association

NEW ORLEANS — A Louisiana federal judge on Feb. 7 granted a motion for voluntary dismissal of a man’s claim that he was exposed to asbestos through contact with a specific worker at a shipyard but keeping other claims regarding exposure against the shipyard, related parties, multiple insurers and the Louisiana Insurance Guaranty Association (LIGA).
February 07, 2024
4th Circuit Affirms District Court’s Ruling On Continuous Trigger Of Coverage

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Feb. 6 affirmed a district court’s ruling that a continuous trigger of coverage applies in a toxic chemical exposure suit based on an answer to a certified question from the West Virginia Supreme Court of Appeals regarding the appropriate trigger of coverage.
February 07, 2024
Texas Panel: Exclusion Bars Coverage For Baylor College Of Medicine’s COVID-19 Losses

HOUSTON — A Texas appeals court on Feb. 6 affirmed a lower court’s summary judgment ruling in favor of insurers in Baylor College of Medicine’s lawsuit seeking commercial property insurance coverage for its lost business income arising from the coronavirus pandemic, finding that the Pollution and Contamination exclusion unambiguously bars coverage.
February 06, 2024
Texas Judge Allows Cross-Claim, Countercross-Claims In Asbestos Dispute To Proceed

FORT WORTH, Texas — A Texas judge denied competing motions to dismiss filed by an insured and one of its excess insurers after determining that the excess insurer and the insured alleged sufficient facts to support a cross-claim and countercross-claims filed in an asbestos coverage suit.
February 06, 2024
Coverage Owed For Some Fuel Spill Cleanup Based On Pollution Exclusion Wording

LAS VEGAS — An excess insurer owes coverage for fuel oil that spilled from a tractor because the excess policy’s pollution exclusion did not exclude coverage for cleanup costs stemming from a statutory or regulatory requirement, a Nevada federal judge said in finding that some of an insured’s cleanup costs are covered by the excess policy.
February 06, 2024
Insureds Appeal Pollution Exclusion Ruling In Carbon Monoxide Coverage Suit

BISMARCK, N.D. — Insureds filed a notice of appeal to the Eighth Circuit U.S. Court of Appeals, seeking review of a district judge’s finding that a pollution exclusion in their farmowners insurance policy excludes coverage for an underlying bodily injury suit arising out of carbon monoxide exposure at the insureds’ business.
February 01, 2024
W.R. Grace Insurer, Former Employees Resolve Dispute Over Asbestos Payments

GREAT FALLS, Mont. — A W.R. Grace & Co. insurer and former workers resolved two cases accusing the insurer of profiting from the “float” created when it delays asbestos-related payments for which it was liable.
January 31, 2024
Service Is Key Issue In Suit Against Reinsurer For Settlement Reimbursement

OMAHA, Neb. — Whether a Brazil-based reinsurer was properly served has become a key issue in a suit seeking reimbursement for a settlement reached with Montana regarding alleged asbestos exposure, with an insurer telling the Nebraska federal court in a reply brief that precedent supports its bid for default judgment.
January 31, 2024
Wall’s Structural Instability Caused By Deterioration, Not Collapse, Judge Says

CHATTANOOGA, Tenn. — No coverage is owed for the replacement of an entire wall of a building undergoing renovations because the cause of the structural instability of the wall was deterioration and not the collapse of a limited number of bricks from the wall during the construction work, a Tennessee federal judge said Jan. 30 in entering judgment in favor of the insurer.
January 31, 2024
Missouri Federal Judge Dismisses Water Damage Suit Following Settlement

ST. JOSEPH, Mo. — A Missouri federal judge dismissed an insured’s suit seeking coverage for water damage caused by the improper installation of the home’s exterior insulation system and exterior doors after the parties filed a joint stipulation for dismissal following the settlement of the insured’s claim.
January 30, 2024
Pollution Exclusion Bars Coverage For Chemical Explosion, Insurer Says

HOUSTON — No coverage is owed to an insured for underlying lawsuits stemming from an explosion following the release of toxic chemicals at an oil refinery because the insured failed to provide timely notice of the incident and the policy’s pollution exclusion precludes coverage, an excess liability insurer says in a complaint filed in Texas federal court.
January 29, 2024
Delaware Judge Stays Exposure Coverage Suit Until Similar Suit Is Resolved

WILMINGTON, Del. — A Delaware state judge on Jan. 26 stayed a suit filed by two insurers seeking a declaration regarding their coverage obligations to insureds for underlying bodily injury suits arising out of exposure to the release of ethylene oxide (EtO) from the insureds’ sterilization plants after determining that a suit pending in Illinois state court filed by one of the insureds prior to the insurers’ Delaware suit should be resolved first as the Illinois suit involves the same coverage issues and parties.
January 29, 2024
Kaiser Debtors, Claimant Reps Agree Asbestos Insurer Not A Party In Interest

WASHINGTON, D.C. — The U.S. Supreme Court should affirm the finding by three courts that the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. does not have standing to object to the debtors’ reorganization plan because none of the insurer’s prepetition interests is affected by the plan, the debtors and asbestos claimants’ representatives tell the high court in respondent briefs on the merits.
January 29, 2024
W.Va. High Court Says Rulings In Chlorine Gas Coverage Suit Are Not Appealable

CHARLESTON, W.Va. — The West Virginia Supreme Court of Appeals dismissed an appeal filed by insurers in a coverage dispute over damages caused by the release of liquefied chlorine after determining that it lacks subject matter jurisdiction to review a circuit court’s findings that the insurers’ policy exclusions for wear and tear, faulty workmanship and pollution do not bar coverage for the damages because the lower court’s orders were not final appealable orders as required under West Virginia law.
January 25, 2024
Fact Issues Exist On Insureds’ Conduct, Insurer’s Handling Of Water Damage Claim

DENVER — A Colorado federal judge on Jan. 24 determined that portions of a breach of contract claim and a bad faith claim against a homeowners insurer can proceed because questions of fact exist as to whether the insureds provided the insurer with all requested information regarding their claim for water damages and whether the insurer acted unreasonably in handling the insureds’ claim.
January 24, 2024
9th Circuit Panel Majority Reverses Ruling On Pollution Exclusion’s Applicability

SAN FRANCISCO — The majority of the Ninth Circuit U.S. Court of Appeals on Jan. 23 reversed a district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris after determining that a potential for coverage exists because the mechanism of exposure does not clearly constitute an event that is commonly thought of as pollution event pursuant to California precedent.
January 24, 2024
Magistrate Judge Recommends Default Judgment, Sanctions Be Entered Against Insureds

HARRISBURG, Pa. — A Pennsylvania federal magistrate judge recommended granting an insurer’s motion for entry of default and motion for sanctions in a water and mold coverage suit because the insured homeowners have repeatedly refused to comply with a number of the court’s orders and the insurer has been prejudiced as a result of the insureds’ failure to comply with the court’s orders.
January 23, 2024
Dismissal Stipulated In Asbestos Coverage Dispute Involving Guaranty Association

COLUMBIA, S.C. — Remaining defendant insurers stipulated to dismissal in a South Carolina federal court of cross-claims by or against two defendant insurers that were previously dismissed from a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.
January 23, 2024
Insured Entitled To Depose Claims Handlers In Environmental Coverage Dispute

DETROIT — An insured seeking coverage for underlying environmental contamination suits is entitled to depose an insurer’s claims handlers because the information sought by the insured is relevant to the insured’s coverage claim and is relevant in determining whether the insurer acted in bad faith in handling the claim, a special master appointed by a Michigan federal court said in granting the insured’s motion to compel deposition testimony.