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Legal News & Headlines

2nd Circuit Panel Remands Judgment In Contamination Dispute For Proper Allocation
NEW YORK - The Second Circuit U.S. Court of Appeals on July 18 vacated and remanded a judgment entered against an insurer in an environmental contamination coverage dispute after determining that the damages must be allocated in accordance with the all sums, vertical exhaustion method outlined in a 2016 decision by the New York Court of Appeals (Olin Corp. v. OneBeacon America Insurance Co., et al., No. 15-2047, 2nd Cir., 2017 U.S. App. LEXIS 12939).

New York Justice Finds Insurers Were Not Timely Notified Of Contamination Claim
ALBANY, N.Y. - A New York Supreme Court justice on July 11 granted a motion for summary judgment filed by two insurers in an environmental contamination suit after determining that the insurers were not timely notified of the claim filed against their insured and that no reasonable explanation was provided for the more than three-year delay in notifying the insurers of the claim (State of New York v. Diana L. Flora et al., No. L61-13, N.Y. Sup., Albany Co.).

Court Allows Widow To Add Claims To Suit Over Missing Asbestos Payment
NEW YORK - A widow may add claims for declaratory judgment and tortious interference with contract to her case claiming that insurers and an administrator are intentionally delaying or denying payment on a more than $7 million asbestos verdict, a New York justice held in an opinion posted July 18 (Ruby Konstantin, et al. v. Aetna Casualty & Surety Co., et al., No. 652897/2013, N.Y. Sup., New York Co., 2017 N.Y. Misc. LEXIS 2697).

Reinsurer, Insurer's Late Notice Dispute Set For Trial In Federal Court
UTICA, N.Y. - A reinsurer and insurer's dispute over reinsurance concerning an underlying $325 million settlement of asbestos claims against an insured has been scheduled for trial on Nov. 13 (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-cv-00853, N.D. N.Y.).

Reinsurer Argues To New York High Court For Cap Of Defense Costs In Asbestos Suit
NEW YORK - Reinsurance certificates should be interpreted according to their plain language requiring "all reinsurance 'subject to' the amount of liability and subordinating the follow-the-form clause to the certificates' specific terms," a reinsurer argues in a brief filed June 27 in the New York Court of Appeals, saying that its liability for defending and indemnifying asbestos litigation is capped (Global Reinsurance Corporation of America v. Century Indemnity Co., No. CTQ-2016, 0005, N.Y. App.).

Excess Insurer Seeks Review By California High Court On Issue Of Policy Exhaustion
LOS ANGELES - In a June 27 petition for review filed in the California Supreme Court, an excess insurer says the high court should accept review of a silica coverage suit because the appellate court failed to address what constitutes proper exhaustion of the primary insurance policy at issue (Truck Insurance Exchange v. Moldex Metric Inc., et al., No. S242845, Calif. Sup., 2017 CA S. Ct. Briefs LEXIS 1064).

Insurer Says Trial Court Properly Dismissed Insureds' Declaratory Judgment Claim
LAKELAND, Fla. - An insurer argues in a May 30 brief filed in the Second District Florida Court of Appeal that a trial court's dismissal of a declaratory judgment claim in a water damage coverage dispute was not in error because the trial court properly found that the insureds did not state a cause of action for declaratory relief (Samuel Rivera et al. v. Homeowners Choice Property and Casualty Insurance Co. Inc., No. 2D16-4567, Fla. App., 2nd Dist., 2017 FL App. Ct. Briefs LEXIS 2144).

Panel Dismisses Insurance Guaranty Association From Asbestos Coverage Dispute
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on July 12 dismissed the Property & Casualty Insurance Guaranty Corp. (PCIGC) from an insured insulation company's appeal of a partial summary judgment order entered in favor of a number of solvent and insolvent insurers involved in an asbestos coverage case (General Insurance Company of America and The Walter E. Campbell Co. Inc. v. United States Fire Insurance Co., et al., No. 17-1585, 4th Cir.).

Pollution Exclusion Bars Coverage For Contaminant Dispersed Within Swine Feed
MINNEAPOLIS - A Minnesota federal judge July 14 granted a motion for judgment on the pleadings filed by an insurer after determining that a policy's pollution exclusion bars coverage for contaminated fat products supplied to a pork producer because the pollution exclusion applies to the contaminant that was dispersed within the supplied fat products fed to the pork producer's swine (Restaurant Recycling LLC, v. New Fashion Pork LLP, intervenor plaintiff, v. Employer Mutual Casualty Company, d/b/a EMC Insurance Companies and Hamilton Mutual Insurance Company, No. 17-7, D. Minn., 2017 U.S. Dist. LEXIS 109755).

Illinois Judge Rejects Insured's Arguments, Denies Motion To Reconsider
CHICAGO - An Illinois judge on July 10 denied an insured's motion for reconsideration in an environmental contamination coverage suit, rejecting the insured's argument that the court erred in determining that the underlying environmental contamination suit did not allege any release of hazardous materials into the environment (Illinois Toolworks Inc. v. ACE Specialty Insurance Co., et al., No. 14-20792, Ill. Cir., Cook Co., Chancery Div.).

New Jersey Federal Magistrate Consolidates 2 Environmental Contamination Lawsuits
NEWARK, N.J. - A New Jersey federal magistrate judge on July 14 granted an insured's motion to consolidate a subrogation lawsuit filed by a property owner against an insured and an insurance coverage lawsuit filed against the insured after determining that the suits involve common questions of law regarding subrogation of costs and coverage for a property contaminated with mercury (BRG Harrison Lofts Urban Renewal LLC v. General Electric Company, et al., and Evanston Insurance Co. v. Accredited Environmental Technologies Inc., et al., Nos. 16-6577, 17-1584, D. N.J., 2017 U.S. Dist. LEXIS 109447).

Insurer Permitted To Depose 2 Individuals Regarding Knowledge Of Policies
INDIANAPOLIS - An Indiana federal judge on July 10 granted an insurer's motion to compel the deposition of two individuals after determining that the insurer is entitled to depose the individuals regarding their knowledge of policies issued to insureds seeking coverage for environmental contamination claims (Eli Lilly and Co., et al. v. Arch Insurance Co., et al., No. 13-1770, S.D. Ind., 2017 U.S. Dist. LEXIS 105833).

Professional Services Exclusion Bars Coverage For Pipeline Explosion, Panel Says
SAN FRANCISCO - The First District California Court of Appeal on July 11 affirmed a trial court's judgment in favor of an excess insurer after finding that its policy's professional services exclusion bars coverage for underlying claims arising from a deadly pipeline explosion (Energy Insurance Mutual Limited v. Ace American Insurance Co., No. A140656, Calif. App., 1st Dist., Div. 4).

Insured's Negligent Work Constitutes An 'Occurrence' Under Policy, 1st Circuit Says
CHICAGO - A condominium association's claim that a painting subcontractor acted negligently is sufficient under Illinois law to constitute an "occurrence" under a commercial general liability policy, the Seventh Circuit U.S. Court of Appeals affirmed July 13 (Westfield Insurance Co. v. National Decorating Service, Inc., et al., No. 16-1439, 7th Cir., 2017 U.S. App. LEXIS 12516).

Judge Allows First-Party Insured's Bad Faith Claim To Proceed To Trial
SIOUX CITY, Iowa - While dismissing an insured's third-party bad faith claim against an insurer for denied coverage of water damage, an Iowa federal judge on June 30 allowed the insured's first-party bad faith and punitive damages claims to proceed to trial (Tim Van Der Weide v. Cincinnati Insurance Co., No. 14-4100, N.D. Iowa; 2017 U.S. Dist. LEXIS 101735).

6th Circuit Majority Says Settlement Agreement Applies To Only 1 Battery Plant
CINCINNATI - A Sixth Circuit U.S. Court of Appeals panel majority on June 30 reversed a district court's finding that a 1989 settlement agreement regarding environmental cleanup costs bars all potential claims for environmental contamination arising out of two of the insured's battery plants after determining that the settlement agreement pertains only to coverage for one of the battery plants (Employers Insurance of Wausau, et al. v. McGraw Edison Company, No. 16-1264, 6th Cir., 2017 U.S. App. LEXIS 11773).

Insurer Owes Defense To Insureds For Environmental Contamination Suit, Judge Says
HOUSTON - An insurer has a duty to defend its insureds in an underlying environmental contamination suit because the policy's exclusions for pollution and use of an auto do not apply to bar coverage, a Texas federal judge said July 7 in granting the insureds' motion for summary judgment (USA Environment, L.P. et al., v. American International Specialty Lines Insurance Co. n/k/a AIG Specialty Insurance Co., No. 16-2216, S.D. Texas, 2017 U.S. Dist. LEXIS 104962).

Federal Judge Says Claims Related To Environmental Remediation Not Timely Filed
BECKLEY, W.Va. - A West Virginia federal judge on July 7 granted an insurer's motion for summary judgment in an environmental remediation coverage suit after determining that the insured's claims for breach of contract and bad faith were not filed within the applicable statute of limitations (R.T. Rogers Oil Company Inc. v. Zurich American Insurance Company, No. 16-1390, S.D. W.Va., 2017 U.S. Dist. LEXIS 105150).

California Panel Affirms No Coverage Due For Damage To Underground Storage Tank
LOS ANGELES - An insured is not entitled to coverage for the collapse of an underground storage tank because an impairment of the tank's structural integrity does not qualify as an actual collapse for which coverage is afforded under the policy, the Second District California Court of Appeal said July 3 (Tustin Field Gas & Food, Inc., v. Mid-Century Insurance Company, No. B268850, Calif. App., 2nd Dist., Div. 2, 2017 Cal. App. LEXIS 602).

Maryland Federal Judge Denies Motion To Dismiss In Pier Collapse Suit
BALTIMORE - A Maryland federal judge on July 5 denied a third-party defendant's motion to dismiss an insured's third-party complaint alleging claims arising out of a collapsed pier after determining that the insured stated a plausible negligence claim against the third-party defendant (The Hartford Fire Insurance Co. v. The Harborview Marina & Yacht Club Community Association Inc., No. 16-769, D. Md.; 2017 U.S. Dist. LEXIS 103260).

Bankruptcy Judge Removes Consent Finding In Coverage Dispute Ruling
CHICAGO - An insurer successfully petitioned an Illinois federal bankruptcy judge to remove a finding in his ruling denying the insurer summary judgment in a coverage dispute with asbestos claimants in the Chapter 11 case of Oakfabco Inc. that the insurer waived its right to object to the ruling, according to a June 29 amended opinion (In re: Oakfabco, Inc., No. 15-27062, N.D. Ill. Bkcy., 2017 Bankr. LEXIS 1856).

Illinois Majority Says Insured's Documents May Be Protected
CHICAGO - The First District Illinois Appellate Court on June 30 reversed a trial court's order regarding the production of documents by an insured after determining that the documents may be protected by the attorney-client privilege (Motorola Solutions Inc, v. Zurich Insurance Company, et al., No. 1-16-1465, Ill. App., 1st Dist., Div. 1, 2017 Ill. App. LEXIS 443).

Insured Settles Environmental Contamination Coverage Dispute With 1 Of Its Insurers
NEWARK, N.J. - An insured seeking coverage for environmental contamination costs settled its claims with one of its insurers on June 27, according to a stipulation of dismissal filed in New Jersey federal court (E.M. Sergeant Pulp & Chemical Co. Inc., et al. v. The Travelers Indemnity Co. Inc., et al., No. 12-1741, D. N.J.).

Insurer Opposes Umpire In Reinsurance Arbitration Dispute With Syndicates
BOSTON - In a dispute over environmental claims, an insurer argues in a June 21 brief filed in a Massachusetts federal court that it should not be forced to accept an umpire proposed by a group of insurance syndicates in arbitration because of "shenanigans" in the appointment process (Certain Underwriters at Lloyd's, London v. Transport Insurance Co., No. 17-10618, D. Mass.).

7th Circuit Says Claim Barred By Failure To Comply With Policy Receipt Provision
CHICAGO - The Seventh Circuit U.S. Court of Appeals on June 27 affirmed a district court's ruling that an insurer has no duty to provide coverage for the contamination of an insured's products because the insured did not execute a storage agreement or possess a warehouse receipt as required by the terms of the policy (PQ Corp. v. Lexington Insurance Co., No. 16-3280, 7th Cir., 2017 U.S. App. LEXIS 11457).

Reinsurer Notes Insurer's Inaccuracies, Seeks Discovery Ruling Reconsideration
SYRACUSE, N.Y. - Noting that an insurer's opposition is "riddled with inaccuracies," a reinsurer argues in its June 26 reply brief that a New York federal court should reconsider a discovery ruling in a dispute over asbestos claims or compel the insurer to produce all post-complaint internal documents involving coverage issues relating to primary and umbrella policies (Utica Mutual Insurance Co. v. R&Q Reinsurance Co., No. 15-cv-270, N.D. N.Y.).

Georgia Appeals Panel Affirms $1M Verdict For Homeowners In Negligence Suit
ATLANTA - The Fifth Division Georgia Court of Appeals on June 28 affirmed a jury verdict of $1 million in favor of homeowners seeking coverage for the negligent installation of an air conditioning system and the subsequent growth of mold in their home (Auto-Owners Insurance Company v. Dolan, et al. and Air Mechanix, LLC v. Dolan, et al., Nos. A17A0408, A17A0409, A17A0410, Ga. App., 5th Div., 2017 Ga. App. LEXIS 327).

Negligent Work Exclusion Precludes Coverage For Damaged Fuel Tank
SAN DIEGO - A California federal judge on June 26 granted a motion for judgment on the pleadings filed by two insurers in a coverage dispute over a damaged fuel tank after determining that the policy's negligent work exclusion precludes coverage for the damage (Terra Nova Gas Station Inc., et al. v. AMCO Insurance Co., No. 16-1565, S.D. Calif., 2017 U.S. Dist. LEXIS 98465).

No Coverage Afforded For Home's Foundation Damage, Federal Judge Says
HARTFORD, Conn. - No coverage is afforded for foundation damage to an insured home because no coverage is afforded for collapse or for latent defects under the policy at issue, a Connecticut federal judge said June 26 in granting an insurer's motion for summary judgment (Gueng-Ho Kim, et al. v. State Farm Fire and Casualty Co., No. 15-879, D. Conn., 2017 U.S. Dist. LEXIS 97871).

 
 
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with all the facts and circumstances of a particular, specific case and the relevant law.