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Mealey's Insurance Bad Faith

  • November 08, 2024

    N.Y. Appeals Court: Evidence Conclusively Established Insurer Did Not Act In Bad Faith

    BROOKLYN, N.Y. — A New York appeals court concluded that a lower court should have granted an insurer’s motion to dismiss an insured’s bad faith claim in a coverage dispute over an underlying personal injury lawsuit but found that the lower court properly determined that the insurer failed to establish that coverage was barred under the policy’s employee exclusion.

  • November 07, 2024

    No Coverage Owed For Alleged Sexual Assault By Insured, 9th Circuit Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals held that an insurer owes no coverage for an underlying sexual assault action brought against the insured, affirming the lower federal court’s grant of summary judgment in favor of the insurer in the insured’s breach of contract and bad faith lawsuit.

  • November 05, 2024

    Freddie Mac, Insurer Move To Dismiss Claims Between Them In D&O Coverage Suit

    WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and an insurer filed a joint stipulation asking a Washington federal court to dismiss the claims between them in 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.

  • October 29, 2024

    Insurer Acted Unreasonably By Failing To Defend Insured Against Negligence Suit

    SEATTLE — A trial court erred in finding that a settlement between a third party and an insured was reasonable because the insurer was not provided with an opportunity to be heard at the reasonableness hearing; however, the trial court properly entered summary judgment in favor of the assignee on claims alleging breach of contract, bad faith and violation of the Washington Insurance Fair Conduct Act (IFCA) because the insurer’s failure to defend its insured was unreasonable, the Division I Washington Court of Appeals said Oct. 28.

  • October 28, 2024

    Denial Of Coverage For Failed Water Pipe Was Not Bad Faith, Panel Says

    PASADENA, Calif. — A district court did not err in granting summary judgment in favor of a homeowners insurer on a bad faith claim because no reasonable juror could find that the insurer’s denial of coverage based on its policy’s exclusion for continuous or repeated seepage or leakage of water was unreasonable, the Ninth Circuit U.S. Court of Appeals held Oct. 25 in an unpublished opinion.

  • October 25, 2024

    Questions Of Fact Exist On Request To Reinstate Long-Term Care Policy, Panel Says

    TRENTON, N.J. — The New Jersey Superior Court Appellate Division on Oct. 24 reversed and remanded a trial court’s ruling on a breach of contract claim after determining that questions of fact exist on whether the insured properly requested that a long-term care insurance policy be reinstated within the policy’s grace period.

  • October 25, 2024

    Auto Coverage Suit To Remain In Federal Court; Bad Faith Claim Fails, Judge Says

    LAS VEGAS — A Nevada federal judge denied an insured’s motion for remand and granted an auto insurer’s motion to dismiss the insured’s bad faith claim after determining that the insured failed to show that complete diversity of citizenship does not exist and failed to provide sufficient facts showing that the insurer’s valuation of her claim was unreasonable.

  • October 24, 2024

    Panel Says Auto Insurer’s Request For Liability Release Was Not Bad Faith Conduct

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s ruling that an auto insurer did not act in bad faith by requiring a signed release of liability for a relative of an insured because the auto insurer’s request for the release of liability was not unreasonable based on the insurer’s determination that the insured’s relative was an additional insured under its auto policy.

  • October 23, 2024

    Reconsideration Of Dismissal Sought In Crop Insurance Extracontractual Damages Row

    COOKEVILLE, Tenn. — Arguing that dismissal of their suit seeking extracontractual damages from a crop insurer “was incorrect and premature” because a related suit against federal regulators remains pending, farmers moved in Tennessee federal court for reconsideration of the ruling against them.

  • October 23, 2024

    Bad Faith Claim Cannot Proceed Against Disability Insurer, Federal Judge Says

    NEW YORK — An insured’s bad faith claim against a disability insurer cannot proceed because under New York law, an insured cannot allege a first-party bad faith claim against an insurer based on a denial of coverage, a New York federal judge said in granting the disability insurer’s motion to dismiss the bad faith claim.

  • October 22, 2024

    Contamination Exclusion Bars Coverage For COVID-19 Losses, Federal Judge Says

    SACRAMENTO, Calif. — An all-risk policy’s contamination exclusion bars coverage for losses sustained during the COVID-19 pandemic because a California appellate panel’s determination that a contamination exclusion bars coverage for COVID-19 losses is binding and warrants the same finding in a similar suit filed by insureds in federal court, a California federal judge said Oct. 21 in granting an insurer’s motion for summary judgment.

  • October 22, 2024

    Motion To Substitute Guaranty Association Denied In Row Over Hurricane Coverage

    LAFAYETTE, La. — A Louisiana federal magistrate judge denied an insured’s motion to substitute the Louisiana Insurance Guaranty Association (LIGA) for a now-insolvent insurer in a dispute over coverage for purported damages caused by Hurricanes Laura and Delta, finding that even if the court determined that it had subject matter jurisdiction over LIGA through a transfer of interest from the insurer to LIGA, the state of Louisiana’s interest in regulating insurance provides a sufficient reason for abstention.

  • October 21, 2024

    Colorado Federal Judge Refuses To Reconsider Ruling On Water Exclusion, Exception

    DENVER — A Colorado federal judge denied a homeowners insurer’s motion for reconsideration, refusing to reconsider whether an underground cistern is part of a home’s plumbing system and covered under the policy’s exception to the water exclusion because the insurer failed to raise the issue in response to the insureds’ motion for partial summary judgment.

  • October 21, 2024

    Insured’s Bad Faith Claim, UM Benefits Claim Properly Dismissed, Panel Says

    ST. PAUL, Minn. — The Minnesota Court of Appeals affirmed a trial court’s dismissal of an insured’s claim seeking coverage for uninsured motorist (UM) benefits and the insured’s claim alleging breach of the duty of good faith and fair dealing, agreeing with the lower court that the complaint fails to provide sufficient facts in support of either claim.

  • October 18, 2024

    Panel Partly Reverses Ruling In Coverage Suit Arising From Hurricanes Laura, Delta

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 17 reversed a lower federal court’s imposition of statutory penalties, attorney fees and costs in favor of a church insured in its lawsuit alleging that the insurer underpaid its losses arising from Hurricanes Laura and Delta, finding that the lower court erred when it determined that the insurer’s conduct was arbitrary and capricious and without probable cause.

  • October 17, 2024

    Third Party Failed To Obtain Judgment Against Insured As Required By Ohio Law

    AKRON, Ohio — A trial court properly dismissed a third-party claimant’s lawsuit against an auto insurer because the claimant failed to obtain a judgment against the insured tortfeasor as required under Ohio law before filing a direct action against the insurer, the Ninth District Ohio Court of Appeals said.

  • October 15, 2024

    Panel: No Professional Liability Coverage Owed For Gender Discrimination Claim

    ST. PAUL, Minn. — The Minnesota Court of Appeals on Oct. 14 affirmed a lower court’s summary judgment ruling in favor of a medical professional liability insurer in a plastic surgeon insured’s breach of contract and bad faith lawsuit seeking coverage for a transgender woman’s claims that he discriminated against her based on her sexual orientation when he refused to perform breast augmentation surgery, finding that no coverage was triggered because it is clear that the underlying claims were based on an alleged gender-identity discrimination and not on a medical incident.

  • October 14, 2024

    Judgment Granted For Vehicle Insurer In Fraud Suit Over Driver Misrepresentation

    RIVERSIDE, Calif. — A California federal judge granted summary judgment to a motor carrier insurer in its suit seeking a determination that it is entitled to rescind its insured’s policy due to the insured’s material misrepresentation in his policy application where he omitted listing as a driver his employee who was killed in a motor vehicle accident while driving one of the insured’s vehicles.

  • October 14, 2024

    Suit Against Captive Reinsurer, Others Follows Alleged Board Upheaval

    WASHINGTON, D.C. — Alleging in part that board upheaval left a captive reinsurer “under the management of inexperienced board members,” a risk retention group (RRG) sued three entities it claims it long had a close relationship with, asserting claims in a District of Columbia federal court for breach of contract, breach of the covenant of good faith and fair dealing and tortious interference with business relations.

  • October 14, 2024

    Freddie Mac Settles With 2nd Insurer In D&O Coverage Suit Over SEC Subpoena

    WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and a second insurer told a Washington federal court that they have reached a settlement in 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.

  • October 14, 2024

    Questions Of Fact Exist As To Whether Auto Insurer Acted In Bad Faith, Judge Says

    JACKSONVILLE, Fla. — A bad faith claim alleged against an auto insurer by a third-party claimant can proceed because questions of fact exist as to whether the insurer acted in the best interests of its insured to avoid a judgment that exceeded the policy limit being entered against its insured, a Florida federal judge said Oct. 11 in denying the insurer’s motion for summary judgment.

  • October 14, 2024

    Questions Of Fact Exist On Breach Of Contract, Bad Faith Claims In Disability Suit

    PHILADELPHIA — A Pennsylvania federal judge on Oct. 11 denied a disability insurer’s motion for summary judgment on an insured’s breach of contract and bad faith claims after determining that questions of fact exist as to whether the insured remained disabled from performing the duties of his own occupation and whether the insurer acted in bad faith in handling the insured’s claim.

  • October 14, 2024

    S.C. Federal Judge Says No Coverage Owed To Insured For Failure To Disclose

    GREENVILLE, S.C. — A federal judge in South Carolina has granted a homeowners insurer’s motion for judgment after determining that it had no duty to defend and indemnify a policyholder sued for failing to disclose water intrusion issues during the sale of his townhome because the policy does not provide coverage for the insured’s alleged failure to disclose information during the sale of the property.

  • October 14, 2024

    Owners Of Aircraft Valued At More Than $222M Sue Insurers In State Court

    STAMFORD, Conn. — Claiming breach of contract and bad faith, five entities that own two freighter planes that they allege a Russian cargo airline has refused to return after the invasion of Ukraine have filed a suit in Connecticut state court against more than two dozen “insurers, underwriters, underwriting managers, and insurance subscribers of coverage in the international aviation insurance market.”

  • October 14, 2024

    Washington Federal Judge Cites Questions Of Fact On Bad Faith Claims In Auto Suit

    SEATTLE — A federal judge in Washington partially denied an auto insurer’s motion for summary judgment on an insured’s claims of bad faith, violations of insurance acts and negligent claims handling after determining that questions of fact exist.