Counterclaims In Suit Over Cleanup Settlement Can Stay

By Adam Lidgett (June 23, 2017, 7:25 PM EDT) -- A California federal judge declined to toss two bad-faith counterclaims against Travelers Property Casualty Co. in its suit over a policyholder's settlement of a pipe rupture lawsuit without consulting the insurer, saying Friday both claims have been properly pled.

In the underlying California state court suit, Pacific Building Group and Old Republic General Insurance Corp. sued Travelers policyholder Mountain Movers Engineering Co. in October 2013 over "property damage caused by a sewage spill allegedly arising from Mountain Movers' work" at a building in an office park in Carlsbad, California. But after securing a defense from Travelers under a reservation of rights,...

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