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Legal News & Headlines

Texas High Court Denies Rehearing On Applicability Of Joint Venture Provision
AUSTIN, Texas - The Texas high court on May 31 denied a petition for rehearing filed by insurers in a coverage dispute arising out of the Deepwater Horizon oil spill in the Gulf of Mexico, refusing to reconsider its decision that an exception to a policy's joint venture provision does not limit excess coverage for defense costs incurred by the insured (Anadarko Petroleum Corp., et al. v. Houston Casualty Co., et al., No. 16-1013, Texas Sup., 2019 Tex. LEXIS 526).

5th Circuit Panel Refuses To Rehear Environmental Damage Coverage Dispute
NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on June 3 denied a petition for rehearing filed by a company that conducted fracking operations on an insured's facility asking it to reconsider its ruling that reversed a federal court's finding that a site pollution legal liability insurer waived its subrogation rights under an onshore master services agreement (MSA) Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir.).

California High Court Hears Arguments On Notice Provision In Environmental Dispute
SAN FRANCISCO - The California Supreme Court on June 4 heard oral arguments regarding whether California's common-law notice-prejudice rule is a fundamental public policy and should be applied to a policy's notice provision and consent provision in an environmental contamination coverage suit (Pitzer College v. Indian Harbor Insurance Co., No. S239510, Calif. Sup.).

Parties Ordered To Participate In Settlement Conference In Contamination Coverage Suit
MINNEAPOLIS - An insured and an insurer involved in a dispute over coverage for environmental contamination cleanup costs must participate in a settlement conference, a Minnesota federal magistrate judge ordered May 30 (Soo Line Railroad Co., doing business as Canadian Pacific v. The Travelers Indemnity Co., No. 18-1989, D. Minn.).

Insurers: Coverage Barred Based On Lead Liability, Pollution Exclusions
CHICAGO - No coverage is owed to an insured for claims asserted against the insured by the U.S. Environmental Protection Agency because the policies at issue bar coverage, the insurers maintain in a May 31 complaint filed in Illinois federal court (Markel Insurance Co., et al. v. J. Solotken & Co. Inc., No. 19-3661, N.D. Ill.).

Pollution Exclusion Does Not Apply To Oil Contaminated By Insured's Work, Appellant Says
LOS ANGELES - A trial court correctly determined that a pollution exclusion does not bar coverage for contamination of oil in a storage tank caused by an insured's work; however, the trial court incorrectly determined that the insurer was entitled to rescind the insured's policy, the party seeking coverage for damage caused by the insured's work argues in a May 22 brief to the Second District California Court of Appeal (NRG Delta LLC v. Endurance American Specialty Insurance Co., No. B285909, Calif. App., 2nd Dist., Div. 5, 2019 CA App. Ct. Briefs LEXIS 1450).

Insured Argues Coverage Owed For Underlying Chemical Exposure Liability Suits
CHICAGO - An insured seeking coverage for underlying liabilities arising out of exposure to polychlorinated biphenyls argues in a June 3 response brief filed in Illinois federal court that an insurer's motion for summary judgment should be denied because the insured was not a party to two settlement agreements, which the insurer claims releases it from liability (Magnetek Inc. v. The Travelers Indemnity Co., et al., No. 17-3173, N.D. Ill.).

Coverage For Asbestos Exposure Barred By Pollution Exclusions, Federal Judge Says
ST. LOUIS - No coverage is afforded for the settlement of an underlying asbestos exposure suit because the pollution exclusion clearly bars coverage, a Missouri federal judge said May 21 in granting an insurer's motion for summary judgment (Zurich American Insurance Co. v. Insurance Company of North America, No. 14-1112, E.D. Mo., 2019 U.S. Dist. LEXIS 84942).

W.R. Grace Insurers Dispute Liability For Montana Plaintiffs' Claims
WILMINGTON, Del. - Negligence claims leveled by asbestos plaintiffs in Montana against insurers of former Chapter 11 debtor W.R. Grace & Co. are barred by W.R. Grace's bankruptcy injunction because they meet the derivative liability requirements for injunctive protection, the insurers say in a May 20 reply brief on remand in Delaware federal bankruptcy court (Continental Casualty Co., et al. v. Jeremy B. Carr, et al., No. 15-50766, D. Del. Bkcy.).

Insurer Did Not Waive Its Right To Invoke Policy's Vacancy Provision
CHARLESTON, W.Va. - The West Virginia Supreme Court of Appeals on May 20 determined that a circuit court did not err in concluding that an insured failed to present clear and convincing evidence that an insurer waived its right to invoke a policy's vacancy provision (Mohammed Ashraf M.D. v. State Auto Property and Casualty Insurance Co., No. 18-0382, W.Va. Sup., 2019 W. Va. LEXIS 222).

Assignment Of Insurance Policies Not Included In Purchase Agreement, Panel Says
MOUNT VERNON, Ill. - A trial court did not err in dismissing a plaintiff's complaint against a number of insurers seeking a finding that coverage is owed for environmental claims filed against the plaintiff's corporate predecessor because the asset purchase agreement (APA) did not include a valid assignment of rights to the predecessor's insurance policies, the Fifth District Illinois Appellate Court said May 24 (The Premcor Refining Group Inc., et al. v. ACE Insurance Company of Illinois, et al., No. 5-18-0210, Ill. App., 5th Dist., 2019 Ill. App. Unpub. LEXIS 935).

Fracking Company Asks Panel To Rehear Environmental Damage Coverage Dispute
NEW ORLEANS - A company that conducted fracking operations on an insured's facility on May 15 filed a petition asking a panel of the Fifth Circuit U.S. Court of Appeals to reconsider its ruling that reversed a federal court's finding that a site pollution legal liability insurer waived its subrogation rights under an onshore master services agreement (MSA) (Halliburton Energy Services Inc. v. Ironshore Specialty Insurance Co., No. 17-20678 consolidated with No. 18-20239, 5th Cir.).

Insured Ordered To Produce Additional Documents In Contamination Coverage Suit
MINNEAPOLIS - Information related to an insured's communications with its other insurers regarding coverage liabilities for environmental contamination cleanup costs incurred at the insured's railyard are relevant to the insured's dispute with another one of its insurers, a Minneapolis federal magistrate judge said May 29 in partially granting the insurer's motion to compel the production of interrogatory responses and documents (Soo Line Railroad Co., doing business as Canadian Pacific, v. The Travelers Indemnity Co., No. 18-1989, D. Minn., 2019 U.S. Dist. LEXIS 90279).

Pollution Liability Insurer Does Not Have To Cover Insured's Salvage Costs
NEW YORK - A district court properly concluded that a pollution liability insurer is not responsible for any salvage costs incurred by an insured after two of its barges were grounded because there was no substantial threat of oil discharge as required for coverage to exist under the pollution liability policy, the Second Circuit U.S. Court of Appeals said May 29 (Starr Indemnity and Liability Co. v. Water Quality Insurance Syndicate, No. 18-1563, 2nd Cir., 2019 U.S. App. LEXIS 15861).

Judge: Insurer Has Duty To Defend Engineering Firm Against Negligent Design Suit
CINCINNATI - An Ohio federal judge on May 28 held that a professional liability insurer has a duty to defend its engineering and construction firm insured against an underlying lawsuit alleging negligent design, negligent construction and breach of contract but stayed the indemnification issue pending resolution of the underlying action (Allied World Surplus Lines Insurance Company v. Richard Goettle, Inc., No. 17-670, S.D. Ohio, 2019 U.S. Dist. LEXIS 88545).

Rental Dwelling Insurer Did Not Breach Contract In Denying Coverage For Water Damage
LOS ANGELES - A trial court properly granted a rental dwelling insurer's motion for summary judgment because the insureds failed to prove that the insurer breached its contract in denying coverage for water damage to their rental home, the Second District California Court of Appeal said May 22 (Alex Nijmeh, et al. v. State Farm General Insurance Co., No. B282396, Calif. App., 2nd Dist., Div. 7, 2019 Cal. App. Unpub. LEXIS 3515).

Expert Testimony Properly Excluded In Contamination Dispute, 7th Circuit Says
CHICAGO - The Seventh Circuit U.S. Court of Appeals on May 16 affirmed a district court's ruling in favor of an insurer on the applicability of the sudden and accidental exception to a policy's pollution exclusion, agreeing with the lower court's finding that the insured could not prove that the contamination was sudden and accidental because the insured's expert testimony was inadmissible (Varlen Corp. v. Liberty Mutual Insurance Co., et al., No. 17-3212, 7th Cir., 2019 U.S. App. LEXIS 14529).

No Coverage Owed For Environmental Cleanup Costs, 9th Circuit Affirms
SAN FRANCISCO - An umbrella liability insurer has no duty to defend its insured against an underlying suit seeking environmental contamination cleanup costs because the policy's pollution exclusion clearly bars coverage for cleanup costs, the Ninth Circuit U.S. Court of Appeals said May 16 in affirming a district court's ruling (RLI Insurance Co. v. Visalia, No. 18-15668, 9th Cir., 2019 U.S. App. LEXIS 14556).

Insurer Seeks Reimbursement For Damages Caused By Engine Failure In Fracking Pump Unit
BEAUMONT, Texas - An insurer argues in a May 13 motion for summary judgment filed in Texas federal court that it is entitled to reimbursement from the manufacturers of a fracking pump unit for more than $15 million in costs paid on behalf of its insured for damages incurred after the fracking unit malfunctioned and caused a fire at the well site (AIG Europe Ltd. v. Caterpillar Inc. and Dragon Products LLC, No. 17-319, E.D. Texas).

Insured Files Suit Seeking More Than $40M In Damages For Gas Well Explosion
PITTSBURGH - An insured seeking coverage for pollution costs and damages caused by a gas well that spewed drilling fluid and fracking materials above the surface of the ground claims in a May 15 complaint filed in Pennsylvania state court that its insurers breached their contract and acted in bad faith in denying coverage for the more than $40 million in damages incurred by the insured (CNX Gas Co. LLC v. Lloyd's of London, et al., No. GD-19-007029, Pa. Comm. Pls., Allegheny Co.).

Workers' Comp Insurer Urges Montana High Court To Reject Asbestos Liability
HELENA, Mont. - The court should reject a plaintiff's "distorted" and backward-working attempt at creating liability on behalf of a workers' compensation insurer for asbestos exposures and instead adopt sound analytical framework from the Restatement of Torts, an insurer tells the Montana Supreme Court in a May 3 reply brief (Maryland Casualty Co. v. The Asbestos Claims Court, et al., No. OP 19-0051, Mont. Sup.).

Fraser's Asbestos Claimants Seek To Pursue Recovery Against Insurance Carriers
TACOMA, Wash. - Asbestos claimants of Chapter 11 debtor Fraser's Boiler Service Inc. on May 14 sought relief from the automatic stay in Washington federal bankruptcy court so they can continue their lawsuits seeking damages only from the company's insurers (In re: Fraser's Boiler Service, Inc., No. 18-41245, W.D. Wash. Bkcy.).

Underlying Plaintiff Permitted To Intervene In Lead Paint Exposure Coverage Suit
BALTIMORE - A Maryland federal judge on May 14 granted an underlying plaintiff's motion to intervene in an insurer's declaratory judgment suit after determining that common questions of law and fact exist between the insureds and the underlying plaintiff, who obtained a $2.2 million judgment against the insured defendants in a lead paint exposure suit (Pennsylvania National Mutual Casualty Insurance Co. v. Benjamin L. Kirson, et al., No. 18-3275, D. Md., 2019 U.S. Dist. LEXIS 81526).

Insureds' Suit Seeking Coverage For Mold, Water Damages Must Be Remanded
SAN DIEGO - An insurer's notice of removal, filed a year after the insureds filed their suit arising out of a coverage dispute for mold and water damages, was not timely, and the insureds' suit must be remanded, a California federal judge said May 15 (Boris Groysman, et al. v. Liberty Insurance Corp., No. 19-667, S.D. Calif., 2019 U.S. Dist. LEXIS 82382).

2nd Circuit Upholds Dismissal Of Insureds' Complaint In Defective Concrete Suit
NEW YORK - The Second Circuit U.S. Court of Appeals on May 16 affirmed a district court's dismissal of an amended complaint filed by insureds seeking damages as a result of defective concrete used in their home's foundation because the insureds failed to carry their burden of proving that coverage is afforded under the policy and that the insurer acted in bad faith when it denied their claim (Joseph Mazzarella, et al. v. Amica Mutual Insurance Co., No. 18-1269, 2nd Cir., 2019 U.S. App. LEXIS 14719).

Defendant Insurers Do Not Owe Any Defense, Indemnity, Oregon Panel Affirms
SALEM, Ore. - The Oregon Court of Appeals on May 8 affirmed a trial court's ruling that primary and excess insurers do not have to contribute to defense and indemnify costs for an insured's environmental contamination and asbestos liabilities because the insurers did not assume the insured's liabilities during a purchase agreement (Allianz Global Risks US Insurance Co. v. ACE Property & Casualty Insurance Co., No. A159858, Ore. App., 2019 Ore. App. LEXIS 591).

Insurers Failed To Prove Underlying Claims Do Not Fall Within Carve-Out Provision
MARSHALL, Texas - A Texas federal judge on May 10 adopted a magistrate judge's recommendation that a motion for summary judgment filed by defendant insurers in a coverage dispute over underlying claims arising out of exposure to polychlorinated biphenyls (PCBs) should be denied, agreeing with the magistrate judge that a question of fact remains as to whether the underlying claims fall within a carve-out provision included in a 1995 settlement agreement between the insured and its insurers (Pharmacia LLC v. Grupo de Inversiones Suramericana S.A., et al., No. 15-920, E.D. Texas, 2019 U.S. Dist. LEXIS 79215).

Length Of Exposure To Lead Paint Cannot Be Determined, Judge Says
BALTIMORE - A Maryland federal judge on May 7 denied an insurer's motion for summary judgment on the issue of the allocation of damages for an underlying lead paint exposure suit after concluding that based on the evidence, a determination could not be made on the length of the underlying plaintiffs' exposure to lead paint (Allstate Insurance Co. v. Jam #32 Corp., No. 17-3293, D. Md., 2019 U.S. Dist. LEXIS 76667).

Insurer Files Suit Seeking Coverage Obligation For Underlying Lead Paint Claims
BALTIMORE - No coverage is owed for injuries sustained as a result of exposure to lead paint after June 13, 1999, because a lead paint exclusion added to insureds' personal umbrella policy on June 13, 1999, bars coverage for lead paint exposure claims, an insurer says in a May 10 complaint filed in Maryland federal court (Allstate Insurance Co. v. Asia Powe, et al., No. 19-1376, D. Md.).

Reinsurers: No Exclusive Jurisdiction Exists To Hear Breach Of Contract Case
CONCORD, N.H. - Reinsurers argue in a May 10 reply brief that a New Hampshire federal court does not have exclusive jurisdiction under the Foreign Sovereign Immunities Act (FSIA) to decide a breach of contract dispute over $22 million in outstanding reinsurance billings (United States Fire Insurance Co., et al. v. Equitas Insurance Ltd., et al., No. 18-01205, D. N.H.).

Ordinance, Law Exclusion Bars Coverage For Additional Work, Federal Judge Says
UTICA, N.Y. - An ordinance or law exclusion included in a homeowners policy bars coverage for bringing a home's electrical wiring up to code in the insured's home, a New York federal judge said May 7, noting that the shoddy electrical work is unrelated to the covered water and mold damage in the home (Edmund G. Sanderson v. First Liberty Insurance Corp., No. 16-644, N.D. N.Y., 2019 U.S. Dist. LEXIS 76494).

Ruling Reversed On Breach Of Contract, Bad Faith Claims In Water Damage Suit
WEST PALM BEACH, Fla. - The Fourth District Florida Court of Appeal on May 8 reversed a trial court's ruling in favor of an insurer in a water damage suit after determining that the insurer's payment of an appraiser's award constitutes a confession that it breached the policy and that genuine issues of fact remand as to whether the insurer acted in bad faith in handling the insureds' claim (Hershel Bryant, et al. v. Geovera Specialty Insurance Co., No. 4D18-189, Fla. App., 4th Dist., 2019 Fla. App. LEXIS 7161).

 
 
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.