Mealey's Insurance Bad Faith
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July 28, 2023
Federal Judge Remands Hailstorm Damage Suit Against Homeowners Insurer, Agency
OKLAHOMA CITY — An Oklahoma federal judge remanded a lawsuit filed by insureds against their homeowners insurer and insurance agency after determining that the insurer failed to carry its burden of proving that the agency was fraudulently joined to the breach of contract and bad faith suit to defeat federal diversity jurisdiction.
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July 28, 2023
Bad Faith Claims Against Third-Party Claims Administrator Cannot Proceed
NEW ORLEANS — A Louisiana federal judge granted a third-party insurance claims administrator’s motion for summary judgment after determining that a plaintiff’s bad faith claims against the administrator cannot proceed because the claims administrator is not an insurer and is not liable to the plaintiff.
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July 28, 2023
Bad Faith Claim Against Auto Insurer Fails To Allege Sufficient Facts, Judge Says
CAMDEN, N.J. — An insured’s bad faith claim against an auto insurer must be dismissed because the insured failed to allege sufficient facts in support of her allegation that the insurer unreasonably delayed or denied her claim for benefits under the policy following her involvement in an auto accident, a New Jersey federal judge said July 27 in dismissing the claim without prejudice.
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July 28, 2023
Breach Of Contract, Bad Faith Suit To Remain In Oklahoma Federal Court
OKLAHOMA CITY — A breach of contract and bad faith suit filed against a homeowners insurer will remain in Oklahoma federal court because at the time of removal from state court, the insurer made a plausible showing that the amount in controversy exceeded the federal jurisdictional minimum of $75,000, an Oklahoma federal judge said in denying the insureds’ motion to remand.
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July 28, 2023
Bifurcation Not Warranted In Assignee’s Suit, Federal Magistrate Judge Says
ST. THOMAS, Virgin Islands — Bifurcation of an assignee’s contractual claims from the assignee’s extracontractual claims is not warranted because the insurer failed to show that bifurcation would promote judicial efficiency or that it would be prejudiced if the claims are not bifurcated, a Virgin Islands federal judge said in denying the insurer’s motion to bifurcate.
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July 27, 2023
Auto Insurer’s Denial Of Claim For Damages Was Reasonable, Panel Says
LOS ANGELES — A trial court properly granted an auto insurer’s motion for summary judgment on a bad faith claim because the insurer presented overwhelming evidence that the denial of the insured’s claim for damages was reasonable, the Second District California Court of Appeal said in affirming the trial court’s ruling.
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July 25, 2023
Texas High Court Accepts Certified Question As To TPPCA In Tornado Coverage Dispute
AUSTIN, Texas — The Texas Supreme Court accepted a certified question from the Fifth Circuit U.S. Court of Appeals in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), agreeing to answer whether an insurer’s payment of a full appraisal award for tornado damage plus any possible statutory interest bars the insured’s recovery of attorney fees.
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July 24, 2023
No Additional Abrupt Collapse Coverage Owed, Insurer Argues To 10th Circuit
DENVER — An insurer and its claims service manager argue to the 10th Circuit U.S. Court of Appeals that a building owner insured is owed no coverage under an insurance policy’s additional abrupt collapse coverage, contending that the insured’s building “did not collapse because its structural capacity was not ‘substantially’ or ‘significantly’ impaired.”
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July 24, 2023
Insurer, Insured Stipulate To Dismissal In Classic Car Policy Coverage Dispute
DENVER — An insurer and its insured stipulated to dismissal of claims against each other in a Colorado federal court regarding alleged material misrepresentations the insured made in procuring a classic car insurance policy and the insurer’s denial of coverage for the insured’s allegedly stolen cars.
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July 20, 2023
Sufficient Facts Alleged In Support Of Statutory Bad Faith Claim In Defects Suit
GREENBELT, Md. — A Maryland federal judge denied an insurer’s motion to dismiss a claim for statutory bad faith after determining that the insured general contractor alleged sufficient facts in support of its claim that the insurer acted in bad faith by failing to process its claim for coverage of a faulty wall system installed as part of a construction project within 45 days as required under Maryland law.
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July 20, 2023
Bad Faith Claim Cannot Proceed Without Breach Of Contract Claim, Panel Says
CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a district court’s ruling that a bad faith claim cannot proceed against the third-party administrator of a health plan because under Wisconsin law, a bad faith claim cannot proceed without a breach of contract claim and the insureds conceded that their breach of contract claim cannot proceed against the third-party health plan administrator.
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July 20, 2023
Breach Of Contract, Bad Faith Claims Against Life Insurer Cannot Proceed
MONTGOMERY, Ala. — An Alabama federal judge dismissed a life insurance beneficiary’s breach of contract and bad faith suit after determining that the claims fails because the life insurance policy was terminated before the death of the beneficiary’s husband.
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July 19, 2023
9th Circuit Vacates Ruling For Insurer, Remands For CAFA Jurisdiction Determination
PORTLAND, Ore. — A trial court erred in granting summary judgment to an insurer accused in a putative class action of bad faith and other violations related to delayed medical payments following vehicle accidents as the court must first determine whether it actually has jurisdiction under the Class Action Fairness Act (CAFA), a Ninth Circuit Court of Appeals panel ruled.
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July 17, 2023
Judge Allows Adding Guaranty Association And Remands In Hurricane Coverage Dispute
NEW ORLEANS — A Louisiana federal judge on July 14 granted a homeowner’s motion to add the Louisiana Guaranty Association (LIGA) as a defendant and remanded to state court her suit against a now-insolvent insurer for its breach of contract and bad faith failure to compensate her for purported damage caused by Hurricane Ida, finding that the purpose of the amendment “is the inclusion of the proper defendant, rather than the exclusion of federal jurisdiction.”
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July 17, 2023
Insured Allowed To Amend Bad Faith, Declaratory Relief Claims In Auto Coverage Suit
PHOENIX — Although an insured’s breach of contract claim is barred by Arizona’s three-year statute of limitations and must be dismissed, an Arizona federal judge granted the insured leave to amend claims for bad faith and declaratory relief against an auto insurer in a dispute over whether the insurer properly refused to stack the insured’s auto benefits.
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July 17, 2023
Homeowners Association Appeals Ruling For Insurer In Suit Arising From Roof Damage
LOS ANGELES — A condominium homeowners association has appealed a California judge’s grant of summary judgment to its insurer in its breach of contract and bad faith lawsuit arising from storm damage to the roof of a Studio City building that housed 31 luxury condominiums.
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July 14, 2023
Breach Of Contract, Bad Faith Claims To Proceed In Wildfire Coverage Suit
SACRAMENTO, Calif. — A California federal judge denied a property insurer’s motion to dismiss insureds’ claims for breach of contract and bad faith after determining that the insureds stated sufficient facts to support both claims.
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July 14, 2023
Misrepresentations About How Property Fire Started Were Material, Judge Determines
SYRACUSE, N.Y. — A New York federal judge granted a homeowners insurer’s motion for summary judgment in a fire damage coverage suit after determining that misrepresentations made by one of the insureds regarding knowledge of how the fire started were material and constitute a breach of the insurance policy.
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July 14, 2023
Bifurcation Of Extracontractual Claims Not Warranted In Auto Coverage Dispute
ALBUQUERQUE, N.M. — A New Mexico federal magistrate judge denied a motion to bifurcate a breach of contract claim from insureds’ extracontractual claims in a coverage dispute stemming from a road rage incident after determining that bifurcating the claims would not be judicially efficient or conserve judicial resources.
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July 13, 2023
Insureds Were Not Withheld Policy Benefits; Bad Faith Claim Fails, Judge Says
LOS ANGELES — A second amended complaint filed by insureds against their homeowners insurers must be dismissed because the insureds’ bad faith claim, the only claim alleged against the insurers, cannot proceed as the insureds were not withheld benefits and the insurers did not cancel the policy despite an initial notice of cancellation.
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July 13, 2023
5th Circuit Certifies Question In Tornado Coverage Dispute To Texas High Court
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on July 12 certified a question to the Texas Supreme Court in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), asking the state’s highest court whether an insurer’s payment of a full appraisal award for tornado damage plus any possible statutory interest bars the insured’s recovery of attorney fees.
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July 13, 2023
Appraisal Not Permitted After Suit Is Filed, Alaska Federal Judge Says
ANCHORAGE, Alaska — An Alaska federal judge denied a motion to compel appraisal in a breach of contract and bad faith suit stemming from roof and water damage to an insured home because the policy’s appraisal provision states that appraisal cannot be invoked after a suit is filed.
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July 12, 2023
Panel Affirms Denial To Add Punitive Damages In Suit Against Now-Insolvent Insurer
DAYTONA BEACH, Fla. — A Florida appellate court affirmed a lower court’s order denying a homeowner’s request to amend his complaint to add punitive damages in his breach of the duty of good faith and fair dealing suit against a now-insolvent insurer, finding that the homeowner failed to satisfy punitive damages requirements under Florida law regarding the “general business practice” related to the insurer’s alleged lack of standards for investigating claims.
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July 12, 2023
Auto Insurer Acted Reasonably In Handling Claim Against Insured, Panel Says
DENVER — A district court properly granted summary judgment in favor of an auto insurer on a bad faith claim because the evidence shows that the insurer acted reasonably in attempting to settle a claim lodged against the insured before a judgment in excess of the insured’s policy limits was entered against the insured, the 10th Circuit U.S. Court of Appeals said.
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July 12, 2023
Bad Faith Claim Against Auto Insurer Must Be Dismissed, Federal Judge Says
CAMDEN, N.J. — An insured’s bad faith claim alleged against her auto insurer must be dismissed because the insured failed to offer sufficient facts in support of her contention that the insurer acted in bad faith in handling her claim for benefits under an auto policy, a New Jersey federal judge said.