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Mealey's Insurance

January 31, 2025
Majority Affirms Ruling In Insurers’ Favor In Bad Faith Suit Over Flood Deductible

NEW ORLEANS — A majority of the Fifth Circuit U.S. Court of Appeals held that a lower federal court did not err in determining that the extrinsic evidence resolved an ambiguity in favor of the insurers’ interpretation of a policy flood deductible, affirming the lower court’s summary judgment ruling in favor of the insurers in a general contractor’s bad faith lawsuit arising from flood damage at a hotel renovation.
January 28, 2025
Reinsurer To 6th Circuit: Arbitration Awards Can Be Basis For Collateral Estoppel

CINCINNATI — Arguing in part that “judicial review of arbitration awards is still available under the Federal Arbitration Act,” a reinsurer urged the Sixth Circuit U.S. Court of Appeals to uphold a ruling that collateral estoppel applies to a defense costs dispute concerning asbestos lawsuits.
January 28, 2025
Suit Seeking Coverage For Chemical Exposure Injuries Removed To Federal Court

SEATTLE — An insurer acted in bad faith and breached its contract by withdrawing its defense of an insured in an underlying suit alleging that a couple’s exposure to chemicals distributed by the insured caused the couple’s child to be born with spina bifida, the insured says in a complaint removed by the insurer to Washington federal court.
January 28, 2025
Insurers Owe Defense, Indemnity For Underlying PFAS, AFFF Suits, Insured Says

SAN FRANCISCO — An insured maintains in its reply in support of its partial motion for summary judgment, filed in California federal court, that its insurers owe coverage for underlying bodily injury and property damage lawsuits related to per- and polyfluoroalkyl substances (PFAS) allegedly contained in aqueous film-forming foams (AFFF) that were manufactured, sold and distributed by the insured because the underlying suits are potentially covered under the policies and the insurers failed to prove that their policies’ pollution exclusion bars coverage.
January 27, 2025
J&J Wants 2nd Look At Ruling Nixing Insurance After $4.69B Talc Verdict

NEW BRUNSWICK, N.J. — An insurer opposed Johnson & Johnson’s request for reconsideration after a judge in New Jersey concluded that subsequent victories in asbestos-talc cases do not alter the fact that a Missouri jury awarded $4.69 billion in a case against the company and found that it acted in a reprehensible manner, putting the verdict outside the terms of insurance policies because the state forbids insuring punitive damages and the policies cover only accidental injuries.
January 27, 2025
Breach Of Contract, Bad Faith Claims In Asbestos Abatement Dispute Fail

GREENBELT, Md. — A Maryland federal magistrate judge granted a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that the insured failed to support her claims that the insurer breached its contract and acted in bad faith in its handling of the insured’s claim for asbestos abatement and a full roof replacement.
January 24, 2025
6th Circuit Denies Building Owner, Contractor’s Rehearing Petitions In Collapse Suit

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied petitions for rehearing filed by a building owner and a contractor, refusing to reconsider a panel’s finding that coverage is owed only for a portion of a wall that collapsed in a building that was undergoing renovation.
January 24, 2025
Federal Court Dismisses Hospital’s Coronavirus Coverage Suit Following Settlement

BOSTON — A Massachusetts federal court dismissed without prejudice a hospital insured’s breach of contract lawsuit seeking coverage for its losses arising from the COVID-19 pandemic after the insured and its commercial property insurer announced that they reached a settlement.
January 23, 2025
Insurer Must Cover Asbestos Defendant’s Defense Costs, Judge Says

NEW ORLEANS — An insurance policy obligates an insurer to cover costs associated with defending against an asbestos action regardless of whether the expenses came before or after notice of the action, a federal judge in Louisiana said in granting summary judgment in a cross-claim.
January 22, 2025
Insurer’s Silica Dust Coverage Suit Transferred From Minnesota To California

MINNEAPOLIS — An insurer’s suit seeking a coverage declaration for underlying silica dust exposure suits filed against an insured must be transferred to California federal court where a similar suit filed by the insured is pending because the insured filed the California suit before the insurer filed its suit in Minnesota federal court, a Minnesota federal judge said Jan. 21 in granting the insured’s motion to transfer.
January 22, 2025
Bid To Compel Production Of Reinsurance Info Denied In Cleanup Costs Dispute

PADUCAH, Ky. — Saying in part that “neither claims manuals and guidelines nor reinsurance-related documents are relevant to Phase I of this litigation,” a Kentucky federal magistrate judge denied a motion to compel production in a dispute over pollution-related cleanup costs.
January 21, 2025
Oral Arguments Set In Dispute Over Insured’s Knowledge Of Contamination

ATLANTA — The 11th Circuit U.S. Court of Appeals issued a docket note on Jan. 17 setting oral arguments for March 7 of an insured’s appeal of a district court’s ruling that coverage is barred for contamination cleanup costs caused by the release of petroleum and other contaminants from an underground storage tank at a gas station.
January 21, 2025
Condo Association Files Complaint, Says Hidden Damage Covered Under Policy

SEATTLE — A property insurer breached its contract and acted in bad faith when it denied a condominium association’s claim for hidden water damage because the hidden damage was caused by a covered cause of loss and is not excluded under the policies at issue, an insured contends in a complaint filed in Washington federal court.
January 17, 2025
Declaratory Judgment Suit Focuses On Reinsurance, Legionnaires’ Disease Claims

DETROIT — Alleging breach of a reinsurance agreement and seeking declaratory judgment, a captive insurer filed a lawsuit in Michigan federal court over claims concerning Legionnaires’ disease.
January 16, 2025
Shipbuilder Creditor Appeals Asbestos Debtor’s Insurer Settlement Protections

RICHMOND, Va. — Shipbuilder Huntington Ingalls Industries Inc., a frequent co-defendant of Chapter 11 debtor Hopeman Brothers Inc. in asbestos cases, has appealed a Virginia federal bankruptcy judge’s approval of an $18 million settlement between the debtor and insurers, saying in its statement of issues on appeal that a U.S. district court must decide whether the approval order’s inclusion of a “nonconsensual third party release and non-debtor discharge and corresponding injunction” amounts to reversable error.
January 14, 2025
Insureds Say Pollution Exclusion Does Not Bar Coverage For Remediation Costs

ALBUQUERQUE, N.M. — A pollution exclusion does not bar coverage for investigation and remediation costs incurred by insureds as a result of contamination discovered at and near the site of an insured dry cleaning business because the pollution exclusion is ambiguous and must be construed in favor of coverage, the insureds maintain in response to an insurer’s motion for summary judgment filed in New Mexico federal court.
January 14, 2025
Judge Refuses To Reconsider Ruling On Request To Transfer Silica Coverage Suit

LOS ANGELES — A California federal judge denied an insurer’s motion to reconsider a ruling on the denial of the insurer’s request to transfer an insured’s suit seeking coverage for underlying bodily injury suits arising out of silica dust exposure to Minnesota federal court because the insurer failed to show that there are new issues of material fact that were not previously considered by the court.
January 14, 2025
Pollution Exclusion Exception Must Be Construed In Favor Of Coverage, Panel Says

PHILADELPHIA — A district court did not err in finding that a retained coverage limits exception to a pollution exclusion is ambiguous and must be construed in favor of coverage for the insured for underlying water contamination lawsuits, a panel of the Third Circuit U.S. Court of Appeals said.
January 14, 2025
Insured’s Suit Seeking Coverage For Debris Cleanup Costs Transferred To Michigan

CINCINNATI — An Ohio federal judge granted an insurer’s motion to transfer an insured’s lawsuit seeking coverage for the costs of cleaning demolition debris that polluted the Ohio River to Michigan federal court because the insurance policy was issued in Michigan and because the insured is based in Michigan.
January 10, 2025
Facing Insurer’s Opposition, Talc Supplier Seeks Extensions Of Exclusive Periods

TRENTON, N.J. — Raw materials supplier and Chapter 11 debtor Presperse Corp. asked a New Jersey federal bankruptcy court to give it more time to file an amended plan of reorganization after the company’s lone insurer objected to the plan’s disclosure statement and disputed insurance coverage for asbestos personal injury claims.
January 10, 2025
Hospital, Insurer Announce Settlement Of Coronavirus Coverage Suit In Federal Court

BOSTON — A hospital insured and its commercial property insurer tell a Massachusetts federal court in a Jan. 9 joint motion that they have reached a settlement in principle of the insured’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic.
January 09, 2025
N.Y. Appeals Court Reinstates Complaint Against 1 Insurer In COVID-19 Coverage Suit

NEW YORK — A New York appeals court concluded that Bowlero Corp. has stated a cause of action against one of its insurers because its complaint sufficiently asserts that a policy’s special time element coverage extension was triggered by the COVID-19 pandemic and the additional pathogenic materials policy exclusion does not apply, unanimously modifying the lower court’s ruling, reinstating the insured’s complaint against the one insurer and affirming the remainder of the lower court’s decision.
January 08, 2025
5th Circuit Affirms Ruling In Insurer’s Favor In Suit Prompted By Winter Freeze

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Jan. 7 affirmed a lower federal court’s summary judgment ruling in favor of a homeowners insurer in a breach of contract lawsuit arising from property damage caused by a winter freeze, finding that the property did not comport with the insurance policy's coverage requirements because it is undisputed that the plaintiff did not reside on the property at the policy’s inception.
January 07, 2025
Panel Vacates, Remands Ruling On Contamination Damages Incurred By Insured

ATLANTA — The 11th Circuit U.S. Court of Appeals vacated and remanded a district court’s ruling in favor of a pollution liability insurer on the issue of damages incurred by an insured for environmental contamination investigation and remediation costs because the lower court erred in determining that the insured’s claim for past damages was not ripe for adjudication.
January 07, 2025
Suit Seeking Coverage For AFFF Claims Dismissed In Favor Of First-Filed Suit

CHARLESTON, S.C. — An insured’s suit seeking coverage from three of its insurers for underlying lawsuits related to the insured’s manufacture, sale and distribution of aqueous film-forming foams (AFFF) must be dismissed in favor of a similar suit filed by the insured in California because the California suit was filed prior to the insured’s South Carolina federal court suit, a South Carolina federal judge said in granting a motion to dismiss by the insurers.