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

Mealey's Insurance Bad Faith

May 24, 2024
Bad Faith Claims Proceed; Fact Issue Exists On Whether Additional Covered Is Owed

LAKE CHARLES, La. — A homeowners insurer is not entitled to partial summary judgment on its insureds’ bad faith claims arising out of a dispute over coverage for hurricane damages because a question of fact exists as to whether additional payments were owed and withheld under the policy by the insurer, a Louisiana federal judge said.
May 24, 2024
Suit Limitation Provision Bars Insureds’ Breach Of Contract, Bad Faith Suit

PHILADELPHIA — Breach of contract and bad faith claims alleged against a homeowners insurer and based on the insurer’s handling of a claim for fire damages cannot proceed because the insureds failed to file suit within one year of the loss as required by the policy’s one-year suit limitation, a Pennsylvania federal judge said May 23 in dismissing the claims without prejudice.
May 24, 2024
California Jury Awards Sisters $18M In Bad Faith Suit Over Flood Damage

SAN BERNARDINO, Calif. — A California jury awarded two sisters $6 million in past noneconomic losses and $12 million in punitive damages after finding that insurers committed breach of contract and acted in bad faith in their handling of the insureds’ property damage claim arising from a 2019 flood.
May 23, 2024
Insured’s Claim For Damages Cannot Succeed Without Breach Of Contract, Judge Says

CHICAGO — An Illinois federal judge granted a commercial liability insurer’s motion for judgment on the pleadings after determining that the insured’s claim for damages under Illinois law based on an alleged unreasonable delay in handling the insured’s claim for underinsured motorist benefits cannot proceed because the insured’s breach of contract claim fails.
May 23, 2024
Failure To Settle Medical Malpractice Claim Was Not Bad Faith, Federal Judge Says

ROCKFORD, Ill. — A bad faith claim brought against a professional liability insurer for failing to settle an underlying medical malpractice claim prior to the entry of jury verdict award that was in excess of the policy limits must be dismissed because the evidence does not support a finding that the insurer acted in bad faith, an Illinois federal judge said in granting the insurer’s motion for summary judgment.
May 23, 2024
Guaranty Association Answers Hurricane Damage Claims, Says Allegations Lack Facts

NEW ORLEANS — The Louisiana Insurance Guaranty Association (LIGA) responded to a homeowner’s petition for damages by stating that the allegations against LIGA are not factual but are legal conclusions regarding the homeowner’s claims that his now-insolvent homeowners insurer, for which LIGA is successor in interest, failed to adequately compensate him for alleged losses related to Hurricane Ida.
May 22, 2024
Parties In Bad Faith Suit Over Water Damage Report Unspecified Settlement

PHOENIX — After an insured, insurer and reinsurer reported an unspecified settlement in a bad faith suit over water damage, an Arizona federal judge ordered that the case be dismissed with prejudice unless the notice of settlement is withdrawn or a stipulation to dismissal is filed by June 17.
May 22, 2024
Insured’s Suit Remanded For Failure To Show Adjuster Was Fraudulently Joined

OAKLAND, Calif. — Remand of an insured’s breach of contract and bad faith suit is warranted because the homeowners insurer and its adjuster failed to meet their burden of showing that the insured’s negligent misrepresentation claim against the adjuster is frivolous, a California federal judge said in granting the insured’s motion to remand.
May 21, 2024
Insured Is Not Entitled To 2 Monthly Disability Payments, Massachusetts Panel Says

BOSTON — A trial court properly found that an insured is not entitled to both total disability benefits and lifetime total disability benefits under a disability income policy because the policy clearly provides that lifetime total disability benefits are not payable until the maximum amount of total disability benefits is paid or until the insured’s 65th birthday, the Massachusetts Appeals Court said May 21 in affirming the trial court’s summary judgment order in favor of the insurer on breach of contract and bad faith claims.
May 21, 2024
Insured Failed To Show Disability Insurer Acted With Reckless Disregard, Judge Says

LOUISVILLE, Ky. — A Kentucky federal judge granted a disability insurer’s motion to dismiss an insured’s claims for violation of the Kentucky Unfair Claims Settlement Practices Act (KUCSPA) and breach of the covenant of good faith and fair dealing because the insured failed to show that the insurer acted with reckless disregard when it determined that the insured was entitled to only residual disability benefits and not total disability benefits.
May 17, 2024
Connecticut Judge Strikes Claims Filed Against Insurer In Mold Damage Suit

VERNON, Conn. — A Connecticut judge granted an insurer’s motion to strike bad faith, unfair trade practices and unjust enrichment claims because an additional insured who seeks coverage for mold and property damages related to the collapse of a hallway floor failed to sufficiently support the claims.
May 17, 2024
Colorado Panel Says Trial Court Properly Applied Case Law In Auto Coverage Suit

DENVER — A trial court properly applied Colorado case law when it denied an auto insurer’s request to contest the liability of its own insured during a default judgment hearing involving an uninsured motorist because the insurer failed to make the required showing that its participation in the hearing was necessary to determine the issue of liability, the Colorado Division 7 Court of Appeals said May 16.
May 17, 2024
Insured Seeks Damages Other Than Attorney Fees For Alleged Bad Faith, Judge Says

SALT LAKE CITY — A Utah federal judge denied an auto insurer’s motion for partial summary judgment on a breach of the implied covenant of good faith and fair dealing claim, rejecting the insurer’s argument that the claim must be dismissed because the insured is seeking only attorney fees as damages.
May 17, 2024
Additional Insured’s Request For Attorney Fees To Proceed In Chemical Coverage Suit

ROCHESTER, N.Y. — An additional insured’s request for attorney fees and costs in a chemical exposure coverage dispute can proceed because the additional insured has alleged sufficient facts in support of its claim for breach of the implied covenant of good faith and fair dealing based on a breach of the insurance contract, a New York federal judge said in denying the insurer’s motion to dismiss and to strike.
May 16, 2024
Judge Cleans Up Docket, Closes Hurricane Coverage Suit Against Insolvent Insurer

LAKE CHARLES, La. — A Louisiana federal judge on May 15 issued an order administratively closing a homeowner’s breach of contract and bad faith suit over Hurricane Laura damage after the case had been stayed for almost a year due to the insurer’s insolvency, finding that “[n]early four years have passed since Hurricane Laura and the court wishes to clean up its docket.”
May 16, 2024
Claims Against Life Insurer Related To Policy Conversion Fail, 3rd Circuit Says

PHILADELPHIA — A district court properly granted summary judgment in favor of a life insurer because there is no evidence that the insurer breached its contract, acted in bad faith or made any misrepresentations regarding the policyholder’s options to convert a term life insurance policy to a whole life or universal life insurance policy, the Third Circuit U.S. Court of Appeals said in affirming the district court’s summary judgment ruling.
May 15, 2024
Additional Insured Failed To Show Specific Jurisdiction Exists Over Insurer

SAN FRANCISCO — A California federal judge on May 14 granted, with leave to amend, an insurer’s motion to dismiss an additional insured’s bad faith complaint arising out of the insurer’s appointment of counsel to represent the additional insured and the insured in an arbitration proceeding in Texas because the additional insured failed to show that specific jurisdiction exists in California over the insurer.
May 15, 2024
New Jersey Panel Reverses Ruling In Insurer’s Favor In Storm Damage Dispute

TRENTON, N.J. — A New Jersey appeals court reversed a lower court’s summary judgment ruling in favor of an insurer in an insured’s breach of contract and bad faith lawsuit arising from storm damage claim, concluding that a construction company’s invoices sufficiently established a prima facie showing of disputed facts as to how much property damage was “causally related” to a fallen tree limb, preventing summary judgment.
May 15, 2024
Insured’s Claim For Breach Of Duty Of Good Faith, Fair Dealing Dismissed

CINCINNATI — An insured’s claim for breach of the duty of good faith and fair dealing alleged against a homeowners insurer cannot proceed because claims for breach of the duty of good faith and fair dealing in Ohio arise only in tort and not under a contract, an Ohio federal judge said May 14 in dismissing the claim.
May 15, 2024
Coverage For Water Damages Limited To $10K Under Homeowners Policy, Panel Says

HOUSTON — No additional coverage is owed under a homeowners policy for water damages caused by water pipes that burst as a result of power outages and freezing temperatures in the wake of Winter Storm Uri in Texas because the policy’s water damage endorsement clearly limits coverage under the policy to $10,000, the First District Texas Court of Appeals said May 14 in affirming a trial court’s ruling on breach of contract and extracontractual claims.
May 14, 2024
Multifamily Housing Lessor Seeks Coverage For Antitrust Conspiracy Claims In MDL

DENVER — A multifamily housing lessor insured sued its primary and excess data protection liability insurers in a Colorado federal court for breach of contract and bad faith, seeking coverage for an underlying multidistrict litigation alleging that it was involved in an antitrust conspiracy when it used a revenue management software to artificially inflate multifamily housing rents above market across the country.
May 14, 2024
Federal Judge Dismisses Lead Insurer From D&O Coverage Dispute Over SEC Subpoena

WASHINGTON, D.C. — A District of Columbia federal judge granted a joint motion filed by Federal Home Loan Mortgage Corp. (Freddie Mac) and its lead insurer to dismiss the insurer from Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
May 08, 2024
COMMENTARY: Bad Faith As A Substitute For Prejudice In Reinsurance Late Notice Disputes

By Robert M. Hall
May 13, 2024
9th Circuit Affirms No ‘Accident’ In Appeal Of Construction Insurance Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 13 affirmed in an unpublished memorandum a Nevada federal judge’s grant of an insurer’s motion for judgment on the pleadings in a coverage dispute with a contractor and a homeowners association (HOA), finding that the insurer was entitled to a declaratory judgment of no coverage because an “accident” had not occurred while the contractor worked on one of the HOA’s buildings.
May 13, 2024
U.S. High Court Refuses To Review Suit Alleging State Farm Agents Were Negligent

WASHINGTON, D.C. — The U.S. Supreme Court on May 13 denied insureds’ petition for a writ of certiorari seeking review of a Ninth Circuit U.S. Court of Appeals’ ruling that affirmed a lower federal court’s grant of an automobile liability insurer’s motion for summary judgment and denied the insureds’ motion to certify questions to the Montana Supreme Court in their lawsuit alleging that the insurer’s agents were negligent in failing to explain or offer underinsured motorist coverage when they purchased their automobile liability policies.