Divided Wisconsin Supreme Court finds use of defective ingredient requiring destruction of health supplement not Property Damage. The Wisconsin Supreme Court, in a ruling 3-2 ruling, found that Nebraska Cultures of California, Inc. (“Nebraska Cultures”) and Jeneil Biotech, Inc. (“Jeneil”) were not entitled to a defense or indemnity from their respective insurers, Evanston Insurance Co. (“Evanston”) and The Netherlands Insurance... Read More

PA District Court and a CA Appellate Court find material misrepresentation in policy applications, supporting the conventional wisdom that policyholders generally should prefer juries. Pennsylvania / Heinz:    A jury originally found in favor of H.J. Heinz and against its excess insurer, Starr Insurance Co., in its efforts to collect on its $25MM Accidental Contamination and Government Recall insurance policy in... Read More

 CA appellate court applying MO law finds $55MM settlement not covered. A California appeals court from the Fourth Appellate District, applying Missouri law, affirmed summary judgment for The Fidelity & Casualty Co. Of New York (“CNA”) in a case brought by its policyholder, Doe Run Resources.  CNA had denied coverage under its excess policy because Doe Run had not received... Read More

First District orders retrial, clarifying standard for a policyholder’s burden to prove a settlement was reasonable and realigning the defendant policyholder as a plaintiff. The Illinois First District Appellate court, applying Illinois law, overruled a verdict in favor of United National Insurance, finding that the trial court had applied an incorrect burden of proof on the policyholder, Faure Brothers Corp.... Read More

Discussing the scope of Farmers Mutual, NJ Appeals Court forces policyholder to pay the allocated pro-rata share of its insolvent carriers. A New Jersey state appellate court, applying New Jersey law, affirmed a trial court decision in a coverage action brought by Ward Sand and Material Co against various of its primary and excess insurers.   The policyholder accepted Pennsauken, NJ... Read More

The Tenth Circuit, applying Oklahoma law, held that the insolvency of a primary insurer, Home Insurance Co., did not require two umbrella insurers to “drop down” and provide defense and indemnity coverage to an asbestos defendant.     Montello, Inc. (“Montello”), a distributor of products used in the oil-drilling industry, distributed a product containing asbestos from 1966 to 1985.  The Home... Read More

A Florida Federal District Court, applying Florida law, held that an insurer must indemnify a general contractor for damages caused by subcontractors’ faulty workmanship, including both for the cost of repairing the defectively installed work and the costs of repairing damage to non-defectively installed work. Pavarini Construction Company (“Pavarini”) was the general contractor for a large condominium building.  The project... Read More

The Vermont Supreme Court, applying Vermont law, held that coverage for damage to a home caused by a contractor spraying the pesticide chlorpyrifos throughout the house to combat bed bugs was barred by a pollution exclusion in the homeowners policy. The homeowners, Neil and Patricia Whitney, noticed bed bugs in their home shortly after a new foster child was placed... Read More

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