The Texas Supreme Court, in response to certified questions from the Fifth Circuit Court of Appeals, held that the installation of faulty flanges in a refinery diesel unit did not constitute “physical injury” to the unit and, therefore, the insurer was not required to cover the cost to replace of the flanges. U.S. Metals, Inc. (“US Metals”) sold ExxonMobil Corporation... Read More
Illinois Jury Finds Against Insurer in Bad Faith Case – Awards $13,000,000 in Punitive Damages A Cook County jury found against ISMIE Mutual Insurance Company (“ISMIE”) in a dispute that alleged ISMIE acted in bad faith in defending its insured obstetricians in an underlying medical malpractice suit. The jury awarded compensatory damages of $1,350,000 and punitive damages of $13,000,000. Alizabeth... Read More
Insurer’s Unreasonable Delay in Accepting Defense Results in Loss of Control A California federal court, applying California law, held that Travelers Indemnity Company of Connecticut (“Travelers”) breached its duty to defend its insured by delaying to provide a defense and, as a result, the Court found that Travelers forfeited its right to select counsel and control the defense. The insured, Centex... Read More
No Coverage After Beverage Product Failed Quality Control and Was Destroyed A Massachusetts appellate court, applying Massachusetts law, held that the loss of a bottled beverage product that was destroyed after quality control testing indicated that there was a risk for spoliation and was not covered under an “all risks” policy because the loss was excluded by a “faulty workmanship”... Read More
WV Supreme Court Reverses $8,000,000 Silica Jury Verdict Against Travelers Due to Late Notice The Supreme Court of Appeals of West Virginia, applying West Virginia law, reversed a jury verdict for $8,000,000 and held that Travelers Indemnity Company (“Travelers”) had no coverage obligation to U.S. Silica under three comprehensive general liability policies finding that the decades-long delay between when the... Read More
Illinois Supreme Court Reverses Appellate Ruling and Holds That the Workers’ Compensation Act and Workers’ Occupational Diseases Act Bar Common-Law Mesothelioma Action The Illinois Supreme Court, applying Illinois law, reversed the Illinois First District Appellate Court and held that an injured employee may not bring a direct common-law action against his employer for a mesothelioma claim because the claim... Read More
The Fifth Circuit, applying Texas law, held that an excess insurance policy issued by Axis Insurance Company (“AXIS”) was not triggered because the insured, Martin Resource Management Corporation (“MRMC”), settled with the underlying primary insurer, Zurich American Insurance Company (“Zurich”), for less than the policy limits and therefore the primary policy was not exhausted as required by the terms... Read More
The Seventh Circuit, applying Indiana law, held that First Mercury Insurance Co. (“First Mercury”) had no duty to defend home security system dealer, Defender Security Co. (“Defender”), in an underlying class action alleging that it illegally recorded customer calls, because the underlying suit did not allege any “oral or written publication of material that violates a person’s ‘right of... Read More
An Illinois appellate court, applying Texas law, held that mold-related injuries allegedly caused by the faulty construction of a building were not barred by a pollution exclusion because the exclusion did not clearly and unambiguously apply to mold. In 2001, a group of Texas government employees alleged that they sustained bodily injuries due to exposure to mold resulting from D.... Read More
An Illinois circuit court, applying Illinois law, ruled that Continental Casualty Co. (“CNA”) only had to satisfy the single occurrence limit in multi-year umbrella policies that it issued to Borg-Warner Corp. (“BWC”), rejecting the argument that the policies had annualized limits equaling an additional $70 million in total occurrence limits according to the opinion. In 2004, CNA filed suit seeking... Read More
