Legal News & Headlines

Trial Court Erred In Entering Default Judgment, Oregon Appeals Panel Says
SALEM, Ore. - A trial court erred in entering a default judgment of more than $800,000 against an insurer because the insured's complaint did not request any specific monetary relief for the settlement of an underlying asbestos personal injury suit, the Oregon Court of Appeals said Feb. 8 (Portland General Electric Co. v. Ebasco Services Inc., et al., No. A143752, Ore. App.; 2012 Ore. App. LEXIS 116). Full story on lexis.com

Pennsylvania Federal Judge Finds Reformation Of Policy Is Not Warranted
PHILADELPHIA - A Pennsylvania federal judge on Jan. 27 refused to allow insurers to reform their policies to add an exclusion for asbestos-related claims because the insurers failed to prove that the omission of the exclusion was the result of mutual mistake (General Refractories Co. v. First State Insurance Co., et al., No. 04-3509, E.D. Pa.; 2012 U.S. Dist. LEXIS 10679). Full story on lexis.com

Insurer: Counterclaims Of Christy's Asbestos Trust Lack Merit; No Coverage Exists
ST. LOUIS - In a Jan. 20 answer to counterclaims filed by Christy Refractories Co. LLC's Chapter 11 asbestos trust in a declaratory judgment action to determine insurance coverage filed by TIG Insurance Co. in a Missouri federal court, TIG lists 30 affirmative defenses as to why it is not liable to pay for asbestos claims against Christy, including that the pollution exclusions in the TIG policies at issue preclude coverage for the claims (TIG Insurance Company v. The Christy Refractories Company LLC and FXY, Inc., No. 11-1297, E.D. Mo.). Full story on lexis.com

Duty To Defend Against Contamination Suit Exists, Federal Magistrate Judge Says
PORTLAND, Ore. - Insurers named as third-party defendants have a duty to defend their insureds against an underlying environmental contamination suit because the underlying suit alleges facts sufficient enough to trigger the duty to defend, an Oregon federal magistrate judge said Jan. 27 (Century Indemnity Co. v. The Marine Group LLC et al., No. 08-1375, D. Ore.; 2012 U.S. Dist. LEXIS 9822). Full story on lexis.com

Pollution Exclusion Bars Insurance Coverage For Chinese Drywall Claims
MOBILE, Ala. - Coverage for damages arising out of Chinese drywall claims is barred by the pollution exclusion contained in a commercial general liability insurance policy, an Alabama federal judge ruled Feb. 8, granting summary judgment to the insurer (QBE Insurance Corp. v. Estes Heating & Air Conditioning Inc., No. 10-456, S.D. Ala.; 2012 U.S. Dist. LEXIS 16159). Full story on lexis.com

Welding Rod Manufacturer Serves Subpoenas On Insurers In Declaratory Judgment Suit
CLEVELAND - Summonses were issued electronically Feb. 8 to two insurance companies Lincoln Electric Co. is suing in the U.S. District Court for the Northern District of Ohio to determine their duties to the welding rod manufacturer in the products liability suits brought by welders (The Lincoln Electric Co. v. Travelers Casualty & Surety Co., et al., No. 11-2253, N.D. Ohio; See 1/18/12, Page 13). Full story on lexis.com

Contaminated Meat Was The Only Cause Of Injuries, Federal Judge Determines
CHICAGO - Because the manufacture and sale of contaminated meat was the only cause of underlying claimants' injuries, there was only one occurrence pursuant to the terms of the applicable policy, an Illinois federal judge said Feb. 3 in granting an insurer's motion for summary judgment (Travelers Property Casualty Company of America v. RSUI Indemnity Co., No. 11-0173, N.D. Ill.; 2012 U.S. Dist. LEXIS 13847). Full story on lexis.com

Judge Denies Judgment To Insurer On Its Duty To Defend Allegations
MOBILE, Ala. - A federal judge in Alabama on Feb. 6 denied summary judgment to a commercial general liability insurance company regarding whether allegations of faulty repairs in a water and sewage system by an insured constitute an "occurrence" (National Trust Insurance Co. v. Magnolia Enterprises Inc., et al., No. 10-00710, S.D. Ala.; 2012 U.S. Dist. LEXIS 13897). Full story on lexis.com

Insurers Breached Duty To Defend Defect Claims, 9th Circuit Concludes
SAN FRANCISCO - Commercial general liability insurers breached their duty to defend a lawsuit alleging negligence against an insured in the site selection and construction of a new home, the Ninth Circuit U.S. Court of Appeals affirmed Dec. 27, because there was an "occurrence" as the damages were unintended, accidental results of the insured's alleged negligence (Willmar Development LLC v. Illinois National Insurance Co. and Lexington Insurance Co., No. 10-35979, 9th Cir.; 2011 U.S. App. LEXIS 25854). Full story on lexis.com

Louisiana Federal Judge Says Insurer Has Duty To Defend In Pollution Liability Suit
BATON ROUGE, La. - An insurer has a duty to defend its insured in a pollution liability suit brought by the United States because the insurer failed to prove that coverage is excluded under the policy, a Louisiana federal judge said Jan. 30 (Louisiana Generating, L.L.C., et al. v. Illinois Union Insurance Company, No. 10-cv-0516, M.D. La.). Full story on lexis.com

Policy Covers Costs Related To Releases Caused By Katrina, Federal Judge Says
HOUSTON - A Texas federal judge on Jan. 31 determined that the only covered costs under a an excess insurance policy are those related to the cleanup of pollutants that were discharged, dispersed, released or that escaped in the immediate aftermath of Hurricane Katrina (St. Paul Surplus Lines Insurance Co. v. Cox Operating LLC, No. 07-2724, S.D. Texas, Houston Div.; 2012 U.S. Dist. LEXIS 11703; See 12/13/07, Page 6). Full story on lexis.com

7th Circuit: Car Owners In Accidents Are Exempt From Paying Response Costs
CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on Feb. 2 affirmed that owners of personal motor vehicles and their insurers cannot be expected to pay for response costs resulting from accidents because they fall under the "consumer product in consumer use" exception in the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) (Emergency Services Billing Corporation Inc. v. Allstate Insurance Company, et al., No. 11-2381, 7th Cir.). Full story on lexis.com

Virginia High Court Agrees To Rehear Arguments In Global-Warming Suit
RICHMOND, Va. - The Virginia Supreme Court on Jan. 17 agreed to reconsider its finding that an insurer has no duty to defend its insured, a holding company of utility entities, in an underlying suit alleging that excessive carbon dioxide emissions caused global warming that led to the degradation of an Alaska town (The AES Corp. v. Steadfast Insurance Co., No. 100764, Va. Sup.; See 9/21/11, Page 4). Full story on lexis.com

Appeals Panel Upholds Use Of Pro-Rata Approach In Lead Coverage Suit
RICHMOND, Va. - An insurer is liable for less than 45 percent of a jury verdict entered in favor of a tenant who sustained injuries as a result of lead paint in the insured's property because the insurer can be liable only for the time that it insured the property owner, the Fourth Circuit U.S. Court of Appeals said Feb. 3 (Pennsylvania National Mutual Casualty Insurance Co. v. Lakia Roberts et al., No. 10-1987, 4th Cir.; 2012 U.S. App. LEXIS 2084; See 8/4/10, Page 7). Full story on lexis.com

Court Vacates Award For Mold Damage, Finds No Coverage Exists Under Policy
CANTON, Ohio - An Ohio appeals court on Jan. 26 vacated a ruling that awarded damages to homeowners for property and mold-related issues, finding that the damage to their home was the result of faulty construction and were not covered occurrences under an insurance policy issued to the builder of the property (Charles Myers, et al. v. United Ohio Insurance Co., No. 11CA000009, Ohio App., 5th Dist.; 2012 Ohio App. LEXIS 287). Full story on lexis.com

9th Circuit: Bankruptcy Code Trumps Arbitration Proviso In Thorpe, Insurer's Deal
SAN FRANCISCO - A federal bankruptcy court had the discretion to decline to enforce an arbitration provision in a settlement agreement between Thorpe Insulation Co. and one of its insurers because resolution of the insurer's claims for breach of the agreement was a core proceeding in Thorpe's Chapter 11 case and having an arbitrator decide the claims would conflict with the purposes of the U.S. Bankruptcy Code, the Ninth Circuit U.S. Court of Appeals held Jan. 30 in what it called an issue of first impression (Continental Insurance Company v. Thorpe Insulation Company, et al. [In The Matter of: Thorpe Insulation Company], No. 10-55744, 9th Cir.; 2012 U.S. App. LEXIS 1691). Full story on lexis.com

Insurer Tells 1st Circuit Reinsurance Dispute Should Have Been Left Up To A Jury
BOSTON - An insurer tells the First Circuit U.S. Court of Appeals in a Jan. 19 filing that summary judgment of its dispute with its reinsurer was in error and that material facts at issue should have been allowed to proceed to trial before a jury (OneBeacon America Insurance Company v. Commercial Union Assurance Company of Canada, No. 11-2072, 1st Cir.). Full story on lexis.com

Insurer Sues Reinsurer Over $346,143.57 In Asbestos Losses
NEW HAVEN, Conn. - Suing its reinsurer, an insurer told a Connecticut federal court on Jan. 25 that its reinsurer owes it $346,143.57 in asbestos-related reinsurance billings (Travelers Casualty and Surety Company v. Independence American Insurance Company, No. 12-cv-00115, D. Conn.). Full story on lexis.com

Insurer: Severed Federal Suit Is Still More Inclusive Than State Action
PROVIDENCE, R.I. - An insurer tells a Rhode Island federal court in a Jan. 24 filing that severing its claims against a reinsurer from those of another insurer will not prejudice the reinsurer (Seaton Insurance Company, formerly known as Unigard Mutual Insurance Company, et al. v. Clearwater Insurance Company formerly known as Skandia America Reinsurance Corporation, No. 09-cv-00516, D. R.I.). Full story on lexis.com

Reinsurer Sued In Calif. Federal Court For $975,000 In Asbestos-Related Billing
LOS ANGELES - An insurer sued a reinsurer in a California federal court on Jan. 18, alleging that the reinsurer owes it in excess of $975,000 in asbestos personal injury related losses and expenses (New Hampshire Insurance Company v. Transport Insurance Company, No. 12-cv-00431, C.D. Calif.). Full story on lexis.com

Global Warning: Virginia Trial Lawyers Association Predicts The End Of Liability Insurance Following AES v. Steadfast Insurance Company
Virginia Supreme Court Agrees To Rehearing In First Global Warming Coverage Case By Randy J. Maniloff White and Williams, LLP Full story on lexis.com

Delaware Judge Clarifies Trigger Dates For Injuries Caused By 9/11 Cleanup Work
WILMINGTON, Del. - A Delaware judge on Jan. 25 granted an insured's motion for reargument after determining that the time limit for notice of claims should be set at 60 days instead of 30 days and that the beginning and ending trigger dates for the underlying workers' personal injury claims arising out of cleanup services performed after the World Trade Center attacks must be clarified (Deutsche Bank Trust Co. Americas et al., v. Royal Surplus Lines Insurance Co. et al., No. 06C-09-261, Del. Super., New Castle Co.). Full story on lexis.com

Insurer Must Pay Default Judgment In Contamination Suit
NEW YORK - Because environmental contamination that caused property damage was the result of a pollution condition pursuant to the terms of an insurance policy, the insurer must pay a default judgment entered against its insured, a New York federal judge said Jan. 26 (Sunnyside Development Co. LLC v. Chartis Specialty Insurance Co., No. 10-3707, S.D. N.Y.; 2012 U.S. Dist. LEXIS 9392). Full story on lexis.com

Plaintiffs Are Not Named Insureds Under Certain Policies, N.J. Judge Says
TRENTON, N.J. - Plaintiffs seeking coverage for costs related to environmental contamination cleanup costs are not entitled to coverage under policies in which they were not named insureds and under excess policies that clearly included an absolute pollution exclusion, a New Jersey Superior Court judge said Jan. 24 (Newport Associates Phase I Developers Limited Partnership, et al., v. Travelers Casualty and Surety Co., et al., Nos. HUD-L-3070-09, HUD-L-3101-09; N.J. Super., Hudson Co.; 2012 N.J. Super. Unpub. LEXIS 179). Full story on lexis.com

Gas Accumulation Did Not Qualify As An 'Event' To Trigger Coverage, Judge Rules
DENVER - Because an insured's commercial general liability policies expired eight years before the occurrence of a gas explosion for which it was found liable, a Colorado federal judge on Jan. 30 held that the CGL providers did not have a duty to defend or indemnify their former policyholder in a resulting negligence lawsuit (Prospect Resources Inc. v. St. Paul Fire & Marine Insurance Co., et al., No. 1:10-cv-01739, D. Colo.; 2012 U.S. Dist. LEXIS 10257). Full story on lexis.com

English Court Finds It Has Jurisdiction To Enforce Award In Charterparty Dispute
LONDON - An England and Wales court on Jan. 24 dismissed an appeal filed by insurers of a lower court decision that denied their application to set aside an order enforcing an arbitration award in favor of a vessel owner, finding that the court has jurisdiction to enforce the award as a judgment entered in the court (West Tankers Inc. v. Allianz SpA, et al., No. [2012] EWCA Civ 27, England and Wales App.). Full story on lexis.com

Pollution Exclusion Bars Coverage; Federal Judge Denies Motion To Reconsider
TAMPA, Fla. - A Florida federal judge on Jan. 24 denied a motion for reconsideration and reiterated that insurers have no duty to defend or indemnify insureds for property damage caused by defective Chinese drywall because the policies' total pollution exclusion clearly precludes coverage for the claims arising out of the defective drywall (Granite State Insurance Co., et al. v. American Building Materials Inc., et al., No. 10-1542, M.D. Fla.; 2012 U.S. Dist. LEXIS 7730; See 12/7/11, Page 4). Full story on lexis.com

9th Circuit Says Insurers Can Object To Thorpe's Confirmed Chapter 11 Plan
SAN FRANCISCO - Because Thorpe Insulation Co.'s Chapter 11 plan of reorganization could harm insurance companies, the plan is not "insurance neutral" and, therefore, the insurers have standing to object to it, the Ninth Circuit U.S. Court of Appeals held Jan. 24 in reversing approval of the plan and remanding the case so the insurers' arguments can be heard (Motor Vehicle Casualty Company, et al. v. Thorpe Insulation Company, et al.[In The Matter of Thorpe Insulation Company] and National Fire Insurance Company of Hartford, et al. v. Thorpe Insulation Company, et al. [In the Matter of Thorpe Insulation Company], Nos. 10-56543 and 10-56622, 9th Cir.; 2012 U.S. App. LEXIS 1272). Full story on lexis.com

English Justice Denies Claim For Indemnity Of Asbestos Settlement
LONDON - An English justice on Jan. 24 dismissed an energy company's claim for indemnity asserted against an insurer in relation to a settlement the company paid to a former employee who developed mesothelioma after asbestos exposure at work, finding that the insurer was not liable to cover the employer for the entire period of the man's exposure (International Energy Group Limited v. Zurich Insurance PLC UK, No. [2012] EWHC 69 [Comm], England and Wales High, Comm.). Full story on lexis.com

$9.35B Judgment Against Al Qaeda In Favor Of Insurers Certified As Final
NEW YORK - A New York federal judge on Jan. 25 entered a final judgment of $9,351,247,965.99 against Al Qaeda and in favor of 23 insurers after adopting a magistrate judge's finding that the insurers are entitled to treble damages under the Anti-Terrorism Act (ATA) for any claims that they reasonably paid to insureds who suffered business and property damage as a result of the Sept. 11 terrorist attacks (In Re: Terrorist Attacks on September 11, 2001, No. 03 MDL 1570 [GBD] [FM], S.D. N.Y.). Full story on lexis.com