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

Mealey's Insurance Bad Faith

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.
May 13, 2024
Insured Cannot Reassert Bad Faith Claim In Collapse Coverage Suit, Judge Says

PHILADELPHIA — A Pennsylvania federal judge denied an insured’s motion for leave to reassert a bad faith claim against its commercial property insurer in a dispute over coverage for the partial collapse of a building because the insured failed to show that the insurer’s reliance on the policy’s faulty workmanship exclusion to deny coverage was unreasonable.
May 13, 2024
Judgment Granted For Guaranty Association In Bad Faith Suit Over Hurricane Damage

LAFAYETTE, La. — A Louisiana federal judge granted the Louisiana Insurance Guaranty’s (LIGA) motion for summary judgment in a bad faith and breach of contract suit filed against a now-insolvent homeowners insurer over purported hurricane damage, finding that LIGA, which was substituted as a defendant for the insurer after it became insolvent, established that it was prejudiced by a lack of notice regarding the alleged damage.
May 10, 2024
Bad Faith Claim Against Homeowners Insurer In Water Damage Suit Cannot Proceed

HOUSTON — A bad faith claim alleged against a homeowners insurer in a water damage coverage dispute cannot proceed because none of the facts supports a finding that the insurer acted in bad faith in handling the insured’s claim for repair costs, a Texas federal judge said in partially granting the insurer’s motion for summary judgment.
May 10, 2024
Vermont Federal Judge Says Bifurcation Of Claims Is Not Warranted

BURLINGTON, Vt. — A Vermont federal judge denied a business auto insurer’s motion to bifurcate a breach of contract claim from a bad faith claim because any prejudicial effect on the insurer caused by trying both claims together will be mitigated if the jury finds that there was no breach of contract regarding the claim for underinsured motorist (UIM) benefits.
May 10, 2024
Defendants Renew Dismissal Arguments In Workers’ Comp Reimbursement Dispute

MONTGOMERY, Ala. — After an Alabama federal judge allowed the plaintiff to file an amended complaint in a dispute over reimbursement for workers’ compensation claims, the defendants started a new round of dismissal briefing regarding breach of contract, bad faith, laches and equitable estoppel claims.
May 09, 2024
Umbrella Insurer Failed To Show No Coverage Owed To Additional Insured, Judge Says

INDIANAPOLIS — An Indiana federal judge on May 8 denied an umbrella insurer’s motion for reconsideration of a summary judgment ruling on a breach of contract claim in a dispute over coverage for an additional insured for underlying lawsuits arising out of a gas explosion because the primary insured’s settlement with the underlying claimants did not extinguish coverage for the additional insured.
May 06, 2024
Insurer, Insureds Settle Water Damage Coverage Suit; Stipulation Of Dismissal Filed

DENVER — A homeowners insurer and its insureds filed a stipulation of dismissal in Colorado federal court following the settlement of the insureds’ breach of contract and bad faith suit arising out of the insureds’ water damage coverage claim.
May 06, 2024
Freddie Mac Dismisses Lead Insurer From D&O Coverage Dispute Over SEC Subpoena

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and its lead insurer on May 3 filed a joint stipulation asking a District of Columbia federal court 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 06, 2024
Motion To Compel Granted In Bad Faith Row With Insurer Making Fraud Counterclaim

SEATTLE — A Washington federal judge on May 3 granted in part an insurer’s motion to compel more complete responses to interrogatories in a bad faith suit filed against the insurer that counterclaimed for a declaration that it has no obligation to cover the insured due to his purported fraudulent misrepresentations about his auto accident injuries, finding that the insurer made reasonable requests, including requests for the insured’s social media postings.
May 06, 2024
Insured Files Notice Of Appeal To 7th Circuit In Radiation Exposure Coverage Suit

MILWAUKEE — An insured filed a notice of appeal to the Seventh Circuit U.S. Court of Appeals, seeking review of a Wisconsin federal judge’s ruling that breach of contract and bad faith claims cannot proceed against two commercial general liability insurers because coverage is barred pursuant to the policies’ radioactive materials exclusion for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers.
May 03, 2024
Federal Judge Finds No Jurisdiction In Construction Insurance Dispute, Remands

SAN FRANCISCO — A federal judge in California remanded to state court a construction insurance dispute brought by a contractor alleging that its insurer acted in bad faith when it refused to pay for most of an arbitration award related to a faulty roof, finding that the insurer failed to join necessary parties when removing the case to federal court.
May 03, 2024
Louisiana Panel Affirms Ruling In Suit Arising From Hurricanes Laura, Delta

LAKE CHARLES, La. — A Louisiana appeals panel affirmed a lower court’s ruling in favor of a church, its attorneys and its property insurer in a pro se litigant’s lawsuit alleging that they settled a hurricanes Laura and Delta property damage action in bad faith, finding that the lower court did not abuse its discretion in denying the appellant’s motion to recuse.
May 03, 2024
Insurer’s Dismissal Bid Granted In Estate’s Suit Seeking $4M Default Judgment

COLUMBIA, S.C. — A South Carolina federal judge dismissed with prejudice an estate’s bad faith suit against an insurer to enforce a $4 million default judgment the estate obtained against a nursing home regarding attempted sexual assault of a former resident, finding that the policy issued to the insured, a health care limited liability company, does not cover claims made against the nursing home, which is a purported subsidiary of the company.
May 03, 2024
Disability Insurer Awarded More Than $11,000 In Costs In Bad Faith Benefits Suit

FRESNO, Calif. — A California federal magistrate judge awarded a disability insurer more than $11,000 in costs that the insurer incurred in successfully defending a breach of contract and bad faith suit lodged against it by an oral surgeon who stopped working to reduce the risk of contracting COVID-19 and suffering complications from the virus based on his comorbid conditions of asthma and hypertension.
May 03, 2024
Insureds’ Bad Faith Suit Dismissed For Failure To File Compliant Civil Remedy Notice

FORT LAUDERDALE, Fla. — A Florida federal judge adopted a magistrate judge’s recommendation and granted an insurer’s motion to dismiss its insureds’ bad faith suit, agreeing with the magistrate judge that the suit could not proceed based on the insureds’ failure to file a compliant civil remedy notice (CRN) as required under Florida law before filing the bad faith suit against the insurer.
May 02, 2024
Disability Insurer, Claimant Settle Dispute Over Policy’s Monthly Benefit Rider

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals entered an order staying a disability claimant’s appeal and directing the parties to file a joint status report following the disability insurer’s filing of a notice of a settlement between the parties.
May 01, 2024
10th Circuit: Insurer’s Coverage Denial For Steel Collapse Not In Bad Faith

DENVER — A 10th Circuit U.S. Court of Appeals panel on April 30 affirmed a Wyoming federal judge’s finding that a building owner insured is owed no coverage under an insurance policy’s additional abrupt collapse coverage, finding that the building owner did not show that the insurer or its claims service manager acted in bad faith.
May 01, 2024
Bad Faith Claim Related To A Portion Of Insurer’s Conduct Will Proceed

MIAMI — An automobile insurer is not entitled to summary judgment on a bad faith claim pertaining to its conduct prior to a tort suit being filed against its insureds because sufficient evidence could support a finding that the insurer acted in bad faith in failing to promptly settle a claim related to a motorcycle accident for which its insured was liable, a Florida federal judge said.
April 30, 2024
Policy Limit Paid For Hurricane Damage; Breach Of Contract, Bad Faith Claims Fail

NEW ORLEANS — A Louisiana federal judge on April 29 granted a homeowners insurer’s motion to dismiss breach of contract and bad faith claims brought by an insured whose home was damaged during Hurricane Ida because the insurer paid the policy limits owed to the insured and the insured failed to include any facts in support of the claims.
April 30, 2024
Jury Finds Insurer Violated Unfair Claim Settlement Practices Act In Irma Suit

MIAMI — A Florida federal jury held that a homeowners insurer did not act in bad faith but that it did violate Florida’s Unfair Claim Settlement Practices Act in a coverage dispute over property damage to a 28,000-square-foot ocean-front home caused by Hurricane Irma.
April 30, 2024
Insured’s Driver Did Not Meet Policy’s Driver Requirement, Indiana Panel Says

INDIANAPOLIS — A trial court properly granted an insurer’s motion for summary judgment on breach of contract and bad faith claims because the driver of the insured tractor-trailer did not meet the policy’s driver-qualification requirement, the Indiana Appeals Court said in affirming the trial court’s ruling.
April 30, 2024
Insurer, Insured Reach Settlement In Water Damage Coverage Suit

SAN FRANCISCO — An insurer filed a notice of settlement in California federal court after reaching a settlement with its insured in a suit seeking coverage for water damages to the insured’s business.
April 26, 2024
Insured Files Notice Of Cross-Appeal To 7th Circuit In Environmental Coverage Suit

SOUTH BEND, Ind. — An insured that was awarded more than $115 million by an Indiana federal jury on breach of contract and bad faith claims in a coverage suit stemming from the insured’s request for coverage costs related to the cleanup of polychlorinated biphenyls (PCBs) filed a notice of cross-appeal to the Seventh Circuit U.S. Court of Appeals.
April 25, 2024
Life Insurer Did Not Breach Contract, Act In Bad Faith, Panel Majority Says

NEW ORLEANS — A life insurer did not breach its contract or act in bad faith by discontinuing automatic payment withdrawals for a life insurance premium after the premium increased because the insured did not provide consent for the automatic withdrawals to continue after the premium increased as required by the contract, the majority of the Fifth Circuit U.S. Court of Appeals said April 24 in affirming a district court’s ruling.