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Legal News & Headlines

No Coverage Owed Under Excess Policies For Insured's Remediation Costs, Judge Says
NEW YORK - An insured seeking coverage for environmental remediation costs is not entitled to coverage under excess policies because the costs, when allocated on a pro rata basis over a 40-year period, do not reach the attachments points of the excess policies, a New York federal judge said Nov. 24 (Olin Corp. v. Certain Underwriters at Lloyd's, London, et al., No. 18-8197, S.D. N.Y., 2018 U.S. Dist. LEXIS 199079).

Federal Magistrate Judge Says Insurer Has No Further Duty For Oil Spill Costs
NEW YORK - A New York federal magistrate judge on Nov. 7 determined that an excess insurer has no further duty to indemnify its insured for oil spill remediation costs because the evidence shows that the parties never intended for the excess insurer to continue paying pollution defense costs after the policy's limit for pollution cleanup and response costs was reached (American Commercial Lines LLC, et al. v. Water Quality Insurance Syndicate, No. 09-7957, S.D. N.Y., 2018 U.S. Dist. LEXIS 194202).

Insured Objects To Amicus Curiae Brief, Says Amicus Party Is Not Unbiased
HARTFORD, Conn. - In a Nov. 21 brief to the Connecticut Supreme Court, an insured seeking coverage for underlying asbestos and silica claims objects to the Complex Insurance Claims Litigation Association's application to file an amicus curiae brief, arguing that rejection of the application is warranted because there is significant overlap between the amicus and the insurers involved in the coverage dispute (R.T. Vanderbilt Co. Inc. v. Hartford Accident & Indemnity Co., et al., Nos. SC 20000, SC20001, SC20003, Conn. Sup.).

Panel Denies Rehearing On Reinsurer's Liability As To Asbestos Claims
NEW YORK - In a one-page order, the Second Circuit U.S. Court of Appeals on Nov. 14 denied a request for panel rehearing or for rehearing en banc of its ruling that a reinsurer's liability follows an insurer's expense-supplemental obligations under umbrella policies (Utica Mutual Insurance Co. v. Clearwater Insurance Co., Nos. 16-2535 & 16-2824, 2nd Cir.).

Expedited Discovery Ordered In Asbestos Coverage Dispute On Policies' Exhaustion
ERIE, Pa. - A Pennsylvania federal judge on Nov. 20 denied an insured's motion for an interim funding order in an asbestos coverage dispute but ordered the parties to participate in a period of expedited discovery regarding the exhaustion of the insured's primary policies and the potential coverage obligations of an excess insurer (Zurn Industries LLC v. Allstate Insurance Co., et al., No. 18-299, W.D. Pa., 2018 U.S. Dist. LEXIS 197481).

Judge Sends Excess Insurer's Coverage Dispute Over Toxic Fumes To Parallel Lawsuit
ALEXANDRIA, Va. - An excess insurer's case against Lumber Liquidators Inc. regarding coverage for lawsuits alleging injuries as a result of toxic levels of formaldehyde in the insured's laminate flooring was dismissed Nov. 16 after a Virginia federal judge found it more efficient to have the dispute resolved in an earlier-filed and parallel Wisconsin state court lawsuit (St. Paul Fire and Marine Insurance Co. v. Lumber Liquidators Inc., et al., No. 18-2820, E.D. Va.).

Remand Of Suit Seeking Business Interruption Costs Not Warranted, Judge Says
TRENTON, N.J. - A New Jersey federal judge on Nov, 19 denied a motion to remand filed by insureds in a suit alleging that their insurer acted in bad faith in ceasing payments for business interruption losses caused by mold growth within the insureds' dental office because the suit does not present an exceptional circumstance that would warrant abstention by the federal court (Anthony J. Vitale DMD, et al. v. State Farm Fire and Casualty Co., No. 18-8988, D. N.J., 2018 U.S. Dist. LEXIS 197043).

Contamination Coverage Suit To Be Litigated In Missouri Rather Than North Carolina
CHARLOTTE, N.C. - An insurer's suit filed in North Carolina federal court and seeking a declaration that no coverage is owed to an insured for more than $3 million in environmental remediation costs must be dismissed because the dispute can be litigated in Missouri federal court where the insured's suit against the insurer is pending, a North Carolina federal judge said Nov. 15 (Great American E&S Insurance Co. v. Butterball LLC, No. 18-113, E.D. N.C., 2018 U.S. Dist. LEXIS 194871).

Coverage Triggered By Exposure To Asbestos, New York Panel Affirms
NEW YORK - Coverage for underlying asbestos claims arising out of the construction of the original World Trade Center towers is triggered if the underlying claims allege that the exposure occurred during the construction of the towers even if the disease did not develop until years later, the a New York appellate panel said Nov. 15 in affirming a lower court's decision (American Home Assurance Co. v. The Port Authority of New York and New Jersey, et al., No. 651096/12, N.Y. Sup., App. Div., 1st Dept., 2018 N.Y. App. Div. LEXIS 7793).

Settlement Approvals Flout 9th Circuit Precedent, Asbestos Insurers Argue
TACOMA, Wash. - A bankruptcy court erred in approving settlements between Chapter 11 debtor Fraser's Boiler Service Inc. and several asbestos insurers and in barring equitable contribution and breach of contract claims by nonsettling insurers against the insurers, the nonsettling insurers told a Washington federal court Oct. 23 (In re: Fraser's Boiler Service, Inc., Nos. 3:18-cv-5637 and 3:18-cv-05638, W.D. Wash.).

Insured Reinforces Argument That Exception To Pollution Exclusion Does Not Apply
CHICAGO - An insured recently replied to an insurer's response in the Seventh Circuit U.S. Court of Appeals, reiterating its argument seeking reversal of a federal judge's ruling in favor of the insurer on the applicability of the sudden and accidental exception to the pollution exclusion (Varlen Corp. v. Liberty Mutual Insurance Co., et al., No. 17-3212, 7th Cir.).

Motion To Dismiss Denied; Claim Against Insurer's Parent Company Supported
SAN FRANCISCO - A California federal judge on Nov. 14 denied a motion to dismiss an insured's third amended complaint after determining that the insured plausibly alleged that the insurer and its parent company acted in bad faith by engaging in a scheme to hide coverage for a water damage claim from the insured (Tam Vu v. Liberty Mutual Insurance Co., et al., No. 18-3594, N.D. Calif., 2018 U.S. Dist. LEXIS 194471).

Judge Dismisses Insurer's Case On Duty To Indemnify 10 Construction Defect Cases
PHILADELPHIA - Because there has been no finding of liability in 10 construction defect cases, a Pennsylvania federal judge on Nov. 14 dismissed a commercial general liability insurer's lawsuit on the scope of its duty to indemnify as it is not ripe (First Specialty Insurance Corp. v. Hudson Palmer Homes Inc., et al., No. 17-5732, E.D. Pa., 2018 U.S. Dist. LEXIS 194560).

Connecticut Federal Judge Amends Ruling For Insurers In Collapse Class Action Suit
BRIDGEPORT, Conn. - A Connecticut federal judge on Nov. 8 amended a prior ruling on a number of motions to dismiss filed by defendant insurers in a class action suit seeking coverage for the deterioration and cracking of homeowners' basement walls caused by the use of defective concrete to clarify that the claims asserted by two plaintiffs against their insurer are dismissed and that three additional insurers must be dismissed entirely from the suit (Michael Halloran v. Harleysville Preferred Insurance Co., et al., No. 16-133, D. Conn., 2018 U.S. Dist. LEXIS 191215).

No Duty To Defend, Indemnify Insured In Underlying Carbon Monoxide Poisoning Suit
PHILADELPHIA - An insurer has no duty to defend or indemnify an insured landlord for an underlying negligence suit arising out carbon monoxide poisoning claims because the policy's pollutant exclusion clearly bars coverage, a Pennsylvania federal judge said Nov. 5 (Foremost Insurance Co. v. Nosam LLC, et al., No. 17-2843, E.D. Pa., 2018 U.S. Dist. LEXIS 190085).

Asbestos Coverage Dispute Must Be Litigated In Texas, Massachusetts Justice Says
BOSTON - A Massachusetts justice on Sept. 24 dismissed an insurer's asbestos coverage suit after determining that the dispute should be litigated in Texas where the insured's suit against the insurer was filed (Lamorak Insurance Co. v. Celanese Corp., et al., No. 1884 CV 00473-BLS1, Mass. Super., Suffolk, Co., 2018 Mass. Super. LEXIS 241).

Asbestos Coverage Dispute Must Await Chapter 11 Results, Bankruptcy Judge Says
TRENTON, N.J. - With new Chapter 11 debtor Duro Dyne National Corp. already on the path to reorganization, a New Jersey federal bankruptcy judge on Oct. 17 denied a request by asbestos insurers to lift the automatic bankruptcy stay so a New York state court coverage case can proceed (In re: Duro Dyne National Corp., et al., No. 18-27963, D. N.J. Bkcy.).

Insurer To Federal Court: Mold Exclusion Precludes Hurricane Damage
MIAMI - A commercial general liability insurer cites a mold exclusion among others in its Nov. 8 complaint seeking a declaratory judgment from a Florida federal court that it has no duty to defend or indemnify damages caused by a condominium association's failure to remediate mold following a hurricane (Mt. Hawley Insurance Co. v. Aquasol Condominium Association Inc., et al., No. 18-24692, S.D. Fla.).

Federal Judge Reopens Insurer's Coverage Case Over Defective Work
MONROE, La. - In granting reconsideration in part, a Louisiana federal judge on Nov. 5 reopened an insurer's coverage dispute regarding allegations that a subcontractor's faulty work led to children becoming sick from excess moisture (Houston Specialty Insurance Co. v. Ascension Insulation & Supply Inc., et al., No. 17-1010, W.D. La., 2018 U.S. Dist. LEXIS 189303).

On Remand, Texas Court Again Rules In Insurer's Favor In Storm Damage Dispute
FORT WORTH, Texas - After the Texas Supreme Court remanded an appellate court's ruling in favor of a homeowners insurer in a coverage dispute over storm damage, an appellate panel on Nov. 8 concluded that no evidence exists that the insureds' property damage was caused by or solely attributable to a covered peril (Richard Seim, et al. v. Allstate Texas Lloyds, et al., No. 02-16-00050, Texas App., 2nd Dist., 2018 Tex. App. LEXIS 9190).

Claims Arising From 2 Bridge Collapses Are Related Claims, Appeals Panel Affirms
RICHMOND, Va. - Coverage for underlying claims filed against an insured as a result of two bridge collapses is subject to a policy's $3 million liability limit, rather than the policy's $5 million aggregate limit, because the claims are related claims that arose from the same design failure by the insured, the Fourth Circuit U.S. Court of Appeal said Nov. 7 in affirming a district court's opinion (Stewart Engineering Inc. v. Continental Casualty Co., et al., No. 18-1386, 4th Cir., 2018 U.S. App. LEXIS 31521).

Claims Dismissed Against Insurer Over Denied Coverage For Basement Wall Cracking
BRIDGEPORT, Conn. - A Connecticut federal judge on Nov. 9 dismissed insureds' claims for breach of contract and violation of the Connecticut Unfair Trade Practices Act (CUTPA) against an insurer regarding the denial of coverage for cracking caused by allegedly defective concrete in the insureds' basement walls (Robert John Houlihan, et al. v. Safeco Insurance Company of America, et al., No. 18-184, D. Conn., 2018 U.S. Dist. LEXIS 192032).

Delay In Settling Collapse Claim Was Unreasonable, Vexatious, Panel Says
ELGIN, Ohio - A trial court did not err in finding that an insurer's delay in settling a claim following the collapse of an insured building was unreasonable and vexatious because the insurer failed to offer a written explanation for the denial of certain costs, failed to complete the property investigation and failed to complete a determination of liability, the Second District Illinois Appellate Court said Nov. 8 (Charter Properties Inc. v. Rockford Mutual Insurance Co., No. 2-17-0637, Ill. App., 2nd Dist., 2018 Ill. App. LEXIS 829).

Ohio High Court Denies Review In Treatment Plant Construction Dispute
COLUMBUS, Ohio - The Ohio Supreme Court on Oct. 24 denied an insured's petition seeking review of a trial court's ruling in favor of insurers involved in an environmental contamination dispute arising out of the insured's construction of a treatment plant to prevent the discharge of acid water from a mine (Bellaire Corp. v. American Empire Surplus Lines Insurance Co., et al., No. 2018-1159, Ohio Sup., 2018 Ohio LEXIS 2513).

Wisconsin High Court Hears Arguments In Pollution Liability Dispute
MADISON, Wis. - The Wisconsin Supreme Court on Oct. 28 heard oral arguments in a coverage dispute over whether a pollution liability insurer owes coverage to an additional insured for underlying property damage claims arising out of a sewage backup (Steadfast Insurance Co. v. Greenwich Insurance Co., No. 2016AP1631, Wis. Sup.).

Motion To File Amended Complaint Denied In Sewer Line Backup Dispute
BALTIMORE - A Maryland federal magistrate judge on Nov. 5 denied an insured's motion for leave to file a second amended complaint in a coverage dispute arising out of a sewer line backup after determining that allowing the amended complaint would be prejudicial to the insurer (Class Produce Group LLC v. Harleysville Worcester Insurance Co., No. 16-3431, D. Md., 2018 U.S. Dist. LEXIS 188642).

No Benefits Due For Occupational Dust Exposure, High Court Majority Says
CHARLESTON, W.Va. - The majority of the West Virginia Supreme Court of Appeals on Nov. 2 affirmed a workers' compensation board of review's decision that four claimants are not entitled to benefits for occupational pneumoconiosis (OP) arising out of their work in coal mines and a factory because none of the four claimants filed claims within three years of their date of last exposure or within three years of being diagnosed with an impairment as a result of the OP (Lester Pennington Jr. v. West Virginia Office of the Insurance Commissioner, Nos. 17-1060, 17-1061, 17-1063, 17-1123, W. Va. Sup., 2018 W. Va. LEXIS 676).

Indiana Appeals Court Says Insurer Owes Coverage For Only 1 Occurrence
INDIANAPOLIS - The Indiana Court of Appeals on Oct. 30 reversed a trial court's ruling that an insurer must pay the policy limit for two occurrences after determining that the insurer owes the policy limit for only one occurrence because there was only one accident that occurred as a result of the insured's failure to properly package and properly label a box that contained hazardous chemicals for shipping (Auto Owners Insurance Co. v. William Long, et al., No. 18A-CT-852, Ind. App., 2018 Ind. App. LEXIS 395).

Fire Constitutes 1 Occurrence, Wisconsin High Court Says In Reversing
MADISON, Wis. - The Wisconsin Supreme Court on Oct. 30 determined that a fire caused by logging operations constitutes only one occurrence under a commercial general liability policy and said that the lower courts erred in finding that there were multiple occurrences to account for each time the fire crossed a property line (Secura Insurance v. Lyme St. Croix Forest Co. LLC, et al., No. 2016AP299, Wis. Sup.).

No Coverage Owed For Collapse, Insurer Argues In Response Brief
AUSTIN, Texas - No coverage is owed for a collapse that occurred during the construction of a hotel because the collapse is precluded by a policy's earth movement exclusion, sewer exclusion and defects exclusion, an insurer argues in a Nov. 2 response to the insured's motion for summary judgment (White Lodging Services Corp., et al. v. Liberty Mutual Fire Insurance Co., No. 17-277, W.D. Texas).

 
 
The above is not legal advice. That can only come from a qualified attorney who is familiar
with all the facts and circumstances of a particular, specific case and the relevant law.