Mealey's Insurance Bad Faith
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June 16, 2023
Insured Failed To Show Auto Insurer Acted Unreasonably In Handling Claim
TACOMA, Wash. — An insured’s claims for bad faith and violations of Washington’s Insurance Fair Conduct and Consumer Protection acts cannot proceed because the insured failed to show that an auto insurer’s investigation and handling of a claim for underinsured motorist (UIM) benefits was unreasonable, a Washington federal magistrate judge said in granting the auto insurer’s motion to dismiss the claims.
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June 15, 2023
Panel: Insured’s Late Notice Of Theft/Vandalism Claim Actually Prejudiced Insurer
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals held June 14 that an insured’s late notice of its claim seeking coverage for its losses stemming from theft and vandalism following a tenant vacancy actually prejudiced its insurer as a matter of law, affirming a lower court’s grant of the insurer’s motion for partial summary judgment in the insured’s breach of contract and bad faith lawsuit.
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June 15, 2023
Insured’s Motion To Amend Bad Faith Suit Against Auto Insurer Denied As Untimely
SALT LAKE CITY — A Utah federal magistrate judge denied an insured’s motion to amend a breach of contract and bad faith complaint filed against her auto insurer because the insured failed to demonstrate that good cause exists to modify the court’s scheduling order to allow her to file an amended complaint a year after the deadline for filing motions to amend.
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June 15, 2023
Insureds Permitted To Amend Complaint To Assert Breach Of Settlement Agreement
HOUSTON — A Texas federal judge granted a motion for leave to file an amended complaint by the insureds who allege that their homeowners insurer breached its contract and acted in bad faith in handling their claim for storm damage because the insureds demonstrated that good cause exists for the amendment and because the insurer will not be prejudiced by the amendment.
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June 15, 2023
Auto Insurer’s Motion To Bifurcate Denied In Auto Coverage Dispute
ALBUQUERQUE, N.M. — A New Mexico federal judge denied an auto insurer’s motion to bifurcate an insured’s bad faith claims from a breach of contract claim after determining that bifurcation is not warranted because the bad faith and other extracontractual claims brought under New Mexico law are based on more than an allegation that the insurer failed to pay the insured’s claim in full.
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June 14, 2023
Claims Alleging Breach Of Contract, Bad Faith Preempted By ERISA, Judge Says
TRENTON, N.J. — Claims for breach of contract, bad faith and breach of fiduciary duty arising out of a dispute over the entitlement to the proceeds from a decedent’s retirement plans must be dismissed because the claims are preempted under the Employee Retirement Income Security Act (ERISA) as the claims relate to employee-benefit plans governed by ERISA, a New Jersey federal judge said in granting the plan defendants’ motion to dismiss.
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June 13, 2023
Breach Of Contract, Bad Faith Claims Fail Against Claims Adjuster, Judge Says
LAKE CHARLES, La. — Breach of contract and bad faith claims against an insurance claims adjusting company cannot proceed because under Louisiana law, a claims adjuster owes no duty to an insured, a Louisiana federal judge said in dismissing the claims against the adjusting company.
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June 12, 2023
Expert On Damages Calculation Admitted As Court Mulls Class Certification
LAFAYETTE, La. — An expert’s proposed methodology to calculate damages in a case alleging that an insurer used improper vehicle valuation methods in vehicle damage claims is admissible, a Louisiana federal magistrate judge ruled in denying a motion to exclude.
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June 09, 2023
Panel Affirms Judgment For Insurer On Breach Of Contract, Bad Faith Claims
ST. LOUIS — A district court did not err in granting a property insurer’s motion for summary judgment on breach of contract and bad faith claims because the insureds failed to prove that they sustained any damages, a necessary element of a breach of contract claim, the Eighth Circuit U.S. Court of Appeals said in affirming the lower court’s ruling.
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June 08, 2023
Panel Denies English Reinsurer’s Rehearing Bid In All-Sums Allocation Case
NEW YORK — A Second Circuit U.S. Court of Appeals panel denied a petition for panel rehearing in which an English facultative reinsurer argued that the opinion “misreads the context” of one English case and “overlooked an English appellate decision reaching exactly the opposite conclusion” in a case concerning all-sums allocation of an environmental claims settlement.
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June 08, 2023
Calif. Federal Judge Grants Motion To Compel Arbitration, Stays Bad Faith Claim
SAN FRANCISCO — A California federal judge granted an auto insurer’s motion to compel arbitration of its insured’s breach of contract claim because arbitration is required under California law and further stayed litigation of the insured’s bad faith claim because the result of the arbitration will impact the result of the bad faith claim.
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June 08, 2023
Condo Developer Urges Court To Deny JMOL Or New Trial In Slab Coverage Suit
DENVER — The developer of a condominium project “presented sufficient evidence” to support a jury’s $2.54 million damages after its builders risk insurer denied coverage for a cracked concrete slab, and although the verdict “may not have been perfect, there was no irreconcilable inconsistency that justifies a new trial,” the developer tells a federal court in Colorado in responses to the insurer’s motions for judgment as a matter of law (JMOL) and a new trial.
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June 07, 2023
Nebraska Panel Says Fact Issues Remain In Row Over Insurance Policy Rescission
PAPILLION, Neb. — A Nebraska Court of Appeals panel on June 6 reversed and remanded a lower court’s order granting summary judgment to an insurer that asserted a defense of rescission for possible fraud in its insureds’ bad faith and contractual indemnity suit for failure to cover breast cancer treatments, finding that fact issues remain regarding the application of a preexisting condition exclusion.
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June 06, 2023
Judge Dismisses Tulane’s Suit Seeking Coverage For Losses Arising From Coronavirus
NEW ORLEANS — Three days after the administrators of the Tulane Educational Fund filed a stipulation of dismissal, a federal judge in New Orleans on June 5 dismissed the fund’s declaratory judgment and bad faith lawsuit seeking coverage for its medical catastrophe expense (MCE) claim and evacuation expenses (EE) resulting from the COVID-19 virus.
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June 05, 2023
Insurer Responds To Condo Owner’s Washington High Court Appeal In Collapse Dispute
OLYMPIA, Wash. — A commercial property insurer asked the Washington Supreme Court to affirm an appeals court’s finding that a condominium owners association insured failed to provide evidence of an “abrupt or sudden falling down of any part of a building such that it could not be occupied for its intended purpose” to trigger policy coverage, arguing that the insured does not explain how previous state and federal court decisions create a conflict with the appeals court’s ruling.
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June 05, 2023
Panel Upholds Finding That Property Insurer Did Not Act In Bad Faith
PHOENIX — A trial court did not err in granting a commercial property insurer’s motion for judgment as a matter of law (JMOL) in a hailstorm damage coverage dispute because the evidence supports a finding that the insurer did not act in bad faith or act unreasonably in handling the insured’s claim for damages, the Division 1 Arizona Court of Appeals said.
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June 05, 2023
Bad Faith Claim Proceeds; Judge Says Stay Of Suit Not Warranted
PHOENIX — An Arizona federal judge denied a property insurer’s motion to stay a breach of contract and bad faith suit until an appraisal proceeding is completed because the bad faith claim, stemming from the insurer’s handling of the insureds’ fire damage claim, will be viable regardless of the outcome of the appraisal proceeding.
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June 02, 2023
Dismissal Of Breach Of Contract, Bad Faith Suit Was Error, Panel Majority Says
DALLAS — The majority of the Texas Fifth District Court of Appeals reversed and remanded a trial court’s dismissal of a breach of contract and bad faith suit brought against a homeowners insurer after determining that the insurer failed to show that the insureds’ claims have no basis in fact.
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May 31, 2023
Breach Of Contract, Bad Faith Suit Remanded To North Carolina State Court
WINSTON-SALEM, N.C. — A breach of contract and bad faith suit brought against insurers that issued a single homeowners policy arising out of the denial of the insureds’ theft claim must be remanded because the insurers failed to meet their burden of proving that complete diversity of citizenship exists as one of the insurer defendants is a citizen of the same state as the insureds, a North Carolina federal judge said.
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May 25, 2023
Breach Of Contract, Bad Faith Suit Against Property Insurer Dismissed
RALEIGH, N.C. — A North Carolina federal judge dismissed a breach of contract and bad faith suit against a property insurer in a hurricane damage coverage dispute after determining that the insureds failed to show how the insurer, which adhered to the terms of the contract by paying an appraisal award entered in favor of the insureds within 60 days, breached the insurance contract and acted in bad faith.
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May 25, 2023
Counterclaims Against Excess Insurer In Explosion Coverage Suit Must Be Dismissed
TRENTON, N.J. — An insured’s counterclaims for breach of contract and bad faith alleged against its excess insurer, which relied on its policy’s total pollution exclusion to deny coverage for underlying suits arising out of an explosion set off by the use of the insured’s magnesium powder, must be dismissed for failure to allege sufficient facts in support of the claims, a New Jersey federal judge said in granting the insurer’s motion to dismiss.
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May 25, 2023
Delaware Discovery Ruling Addresses Reserve Info, Reinsurance Communications
NEW CASTLE, Del. — A motion to compel insurers to produce documents relating to reinsurance communications and internal loss reserve information was granted in a Delaware court in a suit over more than $434 million in claimed losses after a landslide and explosion in September 2018 closed a natural gas pipeline for more than two years.
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May 25, 2023
Magistrate Recommends Adding Guaranty Association In Insureds’ Wind Damage Suit
LAFAYETTE, La. — Two weeks after a Louisiana federal magistrate judge issued a report recommending granting homeowners’ motion to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a suit against their now-insolvent homeowners’ insurer, a federal judge adopted the report and recommendation, finding that the magistrate’s findings were “correct under applicable law.”
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May 25, 2023
Insurer Seeks JMOL Or New Trial In Slab Coverage Suit; Amicus Cannot Weigh In
DENVER — A federal judge in Colorado has denied an insurance association’s motion to appear as amicus curiae in support of an insurer that seeks judgment as a matter of law (JMOL) or a new trial after a jury found that it breached the terms of a builders risk policy issued to a real estate developer when it denied coverage for a cracked concrete slab at a condominium project.
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May 24, 2023
Judge: Bad Faith Claim Against Reinsurer Is Stated Under Direct-Liability Theory
PHOENIX — An Arizona federal judge on May 23 mostly denied dismissal of claims against a reinsurer in a breach and bad faith suit over water damage, ruling in part that the insured “has adequately stated a claim for bad faith against [the reinsurer] on a direct-liability theory, notwithstanding its admitted lack of contractual privity.”