Mealey's Insurance Bad Faith : Mealey's : Legal News & Analysis

Mealey's Insurance Bad Faith

August 28, 2023
Pollution Liability Insurer Says Bad Faith Suit Must Be Heard In Federal Court

SEATTLE — An insured’s complaint alleging claims for breach of contract and bad faith arising out of a commercial general liability and pollution liability insurer’s denial of coverage for underlying bodily injury suits stemming from exposure to chemicals distributed by the insured must be removed to Washington federal court because diversity of citizenship exists and the amount in controversy exceeds the federal jurisdictional minimum of $75,000, the insurer says in a notice of removal.
August 28, 2023
Breach Of Contract, Bad Faith Claims Against Auto Insurer Fail, Judge Says

PHOENIX — An insured’s claims for breach of contract and bad faith cannot proceed against an auto insurer because the insured failed to show that an automobile accident in which he was involved was caused by an uninsured driver and that the auto insurer acted in bad faith in handling the insured’s claim following the accident, an Arizona federal judge said Aug. 25 in granting the auto insurer’s motion for summary judgment.
August 28, 2023
Insurers Tell 5th Circuit $7M Hurricane Ida Dispute Belongs In Arbitration

NEW ORLEANS — A group of foreign and domestic insurers tells the Fifth Circuit U.S. Court of Appeals in an appellee brief that it should affirm a Louisiana federal court’s ruling compelling arbitration of property owners’ claims for $7 million in damages caused by Hurricane Ida and for bad faith, writing that the arbitration is required under the insureds’ policies and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention).
August 25, 2023
6th Circuit Affirms Finding That Insurer Couldn’t Void Policy In Fire Coverage Row

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a district court’s determination that a homeowners insurer could not void a policy after a jury returned a verdict in favor of the Tennessee homeowner and their insurance agency in a fire coverage dispute, finding that the insurer failed to prove that the homeowners’ misrepresentation about not having automatic water sprinklers in their home increased the risk of loss needed to void an insurance policy pursuant to Tennessee law.
August 25, 2023
Reinsurer Wins Permission To Seal 2 Agreements In Cleanup Costs Coverage Row

PADUCAH, Ky. — A Kentucky federal magistrate judge on Aug. 24 granted a motion to seal a third-party administrative services agreement (ASA) and a reinsurance agreement, saying the entities involved have a compelling interest that “outweighs the public’s interest in accessing” the documents and that redaction would be “impractical.”
August 24, 2023
Bad Faith Claim Against Homeowners Insurer Fails, Louisiana Federal Judge Says

SHREVEPORT, La. — A bad faith claim against a homeowners insurer cannot proceed because the insureds failed to meet their burden of showing that the insurer acted arbitrarily and capriciously in handling their claim for damages sustained to their home by hail, a Louisiana federal judge said in granting the insurer’s motion for partial summary judgment.
August 23, 2023
Illinois Law, Not New Jersey Law, Governs Travel Insurance Policies, Judge Says

NEWARK, N.J. — A New Jersey federal judge granted an insurer’s motion to dismiss a putative class action complaint alleging claims for violations of New Jersey law, breach of contract and bad faith based on the insurer’s denial of claims for the reimbursement of premiums paid for travel insurance policies following trip cancellations caused by the coronavirus pandemic because the master policy, which governs the travel insurance policies, is governed by Illinois law and not New Jersey law.
August 22, 2023
Judge Grants Remand After Guaranty Association Added To Hurricane Coverage Row

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to remand in a breach of contract and bad faith suit filed against a now-insolvent insurer over its purported failure to cover damages related to Hurricane Ida, finding that because the homeowner added the Louisiana Guaranty Association (LIGA) as a defendant, diversity jurisdiction is defeated.
August 21, 2023
Alaska Federal Judge Limits Testimony Of Expert In Insurance Coverage Spat

ANCHORAGE, Alaska — An insurance industry standards expert is not qualified to opine on building codes or construction, an Alaska federal judge ruled, also finding that testimony that constitutes a legal conclusion in a dispute over insurance coverage for a damaged roof is excluded.
August 21, 2023
California High Court Agrees To Review Tribe’s Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court granted an Indian tribe insured’s petition to review a state appellate court’s finding that the insured and its experts failed to present sufficient evidence to demonstrate that the coronavirus caused property damage to the tribe’s casino and resort.
August 17, 2023
Judge: Electronic Data Exclusion Bars Coverage For Home Depot’s Data Breach Loss

CINCINNATI — A federal judge in Ohio held Aug. 16 that an insurance policy’s electronic data exclusion bars coverage for Home Depot’s losses stemming from a 2014 data breach, granting the insurers’ motions for summary judgment in Home Depot’s breach of contract and bad faith lawsuit seeking damages up to the full collective policy limits of $50 million.
August 17, 2023
Reinsurer Seeks Leave To Seal Agreements In Cleanup Costs Coverage Row

PADUCAH, Ky. — Arguing that “the agreements are riddled with the sensitive competitive information,” a reinsurer in a coverage dispute filed an unopposed motion in Kentucky federal court seeking leave to seal redacted versions of a third-party administrative services agreement (ASA) and a reinsurance agreement.
August 15, 2023
All-Risk Policies Provide Coverage For Wind-Driven Rain, Federal Judge Says

SEATTLE — A Washington federal judge granted an insured condominium association’s motion for summary judgment in a coverage dispute over millions of dollars of hidden water damage sustained by the association’s buildings by wind-driven rain after determining that coverage is owed under two sets of policies for wind-driven rain when interpreting the policies’ language based on an ensuing loss provision and the efficient proximate rule.
August 15, 2023
Insurer Says District Court’s Ruling On Misrepresentations Must Be Reversed

ATLANTA — A district court’s ruling that an insurer could not demonstrate reliance upon its insureds’ fraudulent misrepresentations regarding mold damage in an insured hotel must be reversed because the district court failed to view the evidence in the insurer’s favor as the nonmoving party, an insurer argues in a cross-appeal reply brief filed in the 11th Circuit U.S. Court of Appeals.
August 14, 2023
Auto Insurer’s Motion To Transfer Breach Of Contract, Bad Faith Suit Granted

PITTSBURGH — A putative class action filed by an insured who alleges that his auto insurer breached its contract and acted in bad faith by relying on the auto policy’s regular use exclusion to deny underinsured motorist (UIM) benefits must be transferred to the U.S. District Court for the Eastern District of Pennsylvania where a similar suit against the same auto insurer is pending because the similar suit was filed first, a federal judge in Pennsylvania said in granting the auto insurer’s motion to transfer.
August 14, 2023
Insured’s Pro Se Suit Against Auto Insurers Must Be Dismissed, Judge Says

RICHMOND, Va. — A Virginia federal judge dismissed an insured’s complaint with prejudice against his auto insurers after determining that the insured fail to allege sufficient facts in support of claims for negligence, fraud and bad faith and after further finding that the claims are barred by the applicable statute of limitations.
August 14, 2023
Issues Of Material Fact Exist On Extra-Contractual Claims Against Auto Insurer

TACOMA, Wash. — An insured’s extra-contractual claims against an auto insurer can proceed because there are genuine issues of material fact as to whether the insurer acted reasonably in evaluating and handling the insured’s claim for underinsured motorist (UIM) benefits.
August 14, 2023
Trial Court Erred In Denying Request To Add Punitive Damages Claim, Panel Says

DAYTONA BEACH, Fla. — A trial court erred in denying an insured’s motion for leave to amend a breach of contract and bad faith complaint to add a claim for punitive damages because the insured presented sufficient evidence in support of her contention that the insurer misrepresented the available coverage under the policy and that the insurer’s failure to properly investigate her claim was a general practice of the insurer.
August 14, 2023
Statute Of Limitations Bars Breach Of Contract, Bad Faith Suit, Texas Panel Says

HOUSTON — The First District Texas Court of Appeals affirmed a trial court’s ruling in favor of an insurer after determining that an insured’s breach of contract and bad faith suit is barred by the applicable two-year statute of limitations because the insured failed to show that the correct insurer had notice of the suit within the two-year statute of limitations.
August 11, 2023
3rd Circuit Refuses To Rehear Coverage Ruling In Suit Over Construction Accident

PHILADELPHIA — The Third Circuit U.S. Court of Appeals denied a commercial general liability insurer’s petition for rehearing or rehearing en banc of a ruling that a policy’s employer liability exclusion does not bar coverage for a lawsuit arising from a construction accident.
August 10, 2023
California Panel Reverses Ruling For Insurer In Builder’s SIR Refund Action

LOS ANGELES — Finding it unclear when a homebuilder exceeded the self-insured retention (SIR) amounts in homebuilders protective policies covering homes in several states, a California appellate panel reversed the trial court’s order sustaining its insurer’s demurrer on statute of limitations grounds of the builder’s suit seeking a refund for excess amounts it paid under the policies.
August 03, 2023
Assault, Battery Exclusion Precludes Coverage; Bad Faith Claim Fails, Panel Says

ST. LOUIS — A district court properly found that no coverage is afforded under a commercial general liability insurance policy for a bar patron’s injuries sustained in a shooting at an insured bar because the policy’s assault and battery exclusion precludes coverage and also properly found that the insured bar owner’s bad faith claim cannot proceed because no coverage is afforded under the policy, the Eighth Circuit U.S. Court of Appeals said.
August 03, 2023
Amending Bad Faith Claim Would Be Futile, Judge Says In Denying Insureds’ Motion

PHILADELPHIA — A Pennsylvania federal judge denied a motion for leave to file a second amended complaint to allow insureds to add facts in support of a bad faith claim against an auto insurer because amendment would be futile as the bad faith claim is barred by the applicable two-year statute of limitations.
August 03, 2023
GEICO Seeks Rehearing After 9th Circuit Vacates Ruling In Medical Payment Case

PORTLAND, Ore. — An insurer accused in a putative class action of bad faith and other violations related to delayed medical payments following vehicle accidents filed a petition for rehearing en banc after a Ninth Circuit U.S. Court of Appeals panel vacated a summary judgment ruling and directed the trial court to first determine whether it has jurisdiction under the Class Action Fairness Act (CAFA).
August 02, 2023
Breach Of Contract, Bad Faith Claims Fail In Water, Mold Damage Suit

MOBILE, Ala. — Breach of contract and bad faith claims against a homeowners insurer fail because the insureds did not show that their home sustained a direct physical loss as a result of a hurricane or that a material issue of dispute exists as to whether the insurer acted in bad faith in investigating and adjusting their claim for water and mold damages, an Alabama federal judge said in granting the insurer’s motion for summary judgment.