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

Mealey's Insurance Bad Faith

April 05, 2024
Bad Faith Claims Against Homeowners Insurer Should Not Proceed, Magistrate Says

SAN ANTONIO — A Texas federal magistrate judge recommended granting a homeowners insurer’s motion for summary judgment on the insureds’ extracontractual claims based on alleged bad faith conduct by the insurer because a genuine issue of dispute existed regarding coverage for damage to the insureds’ roof.
April 05, 2024
Bad Faith Claim Against Auto Insurer To Proceed, California Federal Judge Says

FRESNO, Calif. — An insured’s claim for bad faith against an auto insurer can proceed because the disparity between an arbitrator’s determination of the insured’s damages and the available policy limit supports the insured’s bad faith claim, a California federal judge said in denying the insurer’s motion for judgment on the pleadings.
April 04, 2024
Coverage Owed For Mold Damages, Insureds Reiterate In Corrected Reply Brief

ATLANTA — In a corrected reply brief, filed with the permission of the 11th Circuit U.S. Court of Appeals, insureds reiterate their argument that a district court erred in finding that no coverage is owed for mold damage discovered in an insured hotel because the policy at issue provides coverage for losses caused by a construction defect even if the cost to fix the defect is not covered.
April 03, 2024
Magistrate Judge Finds Reinsurer Liable For $2M In Damages In Reimbursement Row

DALLAS — Concluding that a ceding insurer met the “subjective” notice standard in the parties’ agreement and that a reinsurer failed to show that it was prejudiced by the timing of the notice, a Texas federal magistrate judge dismissed the reinsurer’s claims with prejudice and granted the insurer summary judgment on its counterclaims.
March 29, 2024
Insureds Cannot Mention Cost Of Mold Damage Or Mold Repairs During Trial

PHILADELPHIA — Insureds who allege that their homeowners insurer breached its contract and acted in bad faith by refusing to pay for all damages caused by a tornado and rain during Hurricane Ida are precluded from mentioning the cost and scope of mold damages and repairs to their home during trial because the mold damages are clearly excluded under the homeowners policy, a Pennsylvania federal judge said.
March 28, 2024
Bad Faith Claim Based On Insurer’s Denial Of Defense Not Time-Barred, Panel Says

SANTA ANA, Calif. — A trial court erred in granting a homeowners insurer’s motion for summary judgment on an insured’s bad faith claim related to the insurer’s denial of a defense for an arbitration proceeding arising out of the insured’s alleged failure to disclose a water and mold damage in a home sold by the insured because the bad faith claim based on the denial of a defense was not time-barred under the policy, the Fourth District California Court of Appeal said.
March 28, 2024
Trial Court Properly Awarded Sanctions To Disability Insurer, California Panel Says

SANTA ANA, Calif. — A trial court properly sustained a disability insurer’s demurrer of an insured’s breach of contract and bad faith suit and properly awarded sanctions to the disability insurer because the suit was the third suit filed against the insurer and the insured failed to meet his burden of showing that the third suit was not frivolous or without merit, the Fourth District California Court of Appeals said.
March 27, 2024
Fact Issue Exists On Notice Of Insured’s Property Damage Claim, Kentucky Panel Says

FRANKFORT, Ky. — The Kentucky Court of Appeals reversed and remanded a trial court’s summary judgment ruling in favor of a homeowners insurer on breach of contract and bad faith claims after determining that a question of fact exists as to whether the homeowner provided prompt notice of a property damage claim.
March 27, 2024
Radioactive Materials Exclusion Applies; Breach Of Contract, Bad Faith Claims Fail

MILWAUKEE — Breach of contract and bad faith claims against two commercial general liability insurers fail because the policies’ radioactive materials exclusion bars coverage for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers, a Wisconsin federal judge said in granting the insurers’ motion for summary judgment.
March 27, 2024
Federal Judge: Ambiguities Mean Insurer Owes Defense To Damaged Home’s Owners

SAN DIEGO — A California federal judge granted in part a couple’s motion for partial summary judgment, finding that a renovator’s insurer owes them a duty to defend and indemnify due to damages caused to the couple’s duplex home while the renovator was replacing the roof because an ambiguously worded policy exclusion regarding apartments does not bar coverage.
March 27, 2024
Insured’s Claims To Proceed Against Non-Issuing Insurance Companies, Judge Says

OKLAHOMA CITY — Breach of contract and bad faith claims can proceed against an insurer’s related entities because the named insured stated sufficient facts to create a fact issue as to the liability of the non-issuing insurance companies.
March 26, 2024
Auto Insurer’s Claims File Is Discoverable, Ohio Panel Says In Affirming Ruling

CINCINNATI — A trial court did not err in ordering an auto insurer to produce its claims file because pursuant to Ohio precedent, an insurer’s claims file is discoverable up until the date of payment when insureds allege that the insurer acted in bad faith in handling a claim, the First District Ohio Court of Appeals said in affirming the trial court’s ruling.
March 26, 2024
Bifurcation Of Breach Of Contract Claim From Bad Faith Claims Not Warranted

DENVER — Bifurcation of an insured’s breach of contract claim from the insured’s bad faith claims is not warranted because it is not clear that the bad faith claims will fail or that the auto insurer would be prejudiced if the claims are not bifurcated, a Colorado federal judge said in denying the insurer’s motion for bifurcation.
March 26, 2024
Insurers Win Summary Judgment On Bad Faith Claim In Case Over Settlement

CINCINNATI — Ruling that Marginian v. Allstate Ins. Co. “plainly bars” the sole remaining bad faith claim under Ohio law “[a]nd no amount of discovery could change that,” an Ohio federal judge granted summary judgment for defendant insurers in litigation over the settlement of a third-party personal injury lawsuit.
March 25, 2024
Indiana Federal Judge Awards Insured Prejudgment Interest In Cleanup Suit

SOUTH BEND, Ind. — An Indiana federal judge on March 22 denied insurers’ post-trial motions, upheld a jury’s verdict of $112 million in favor of the insured and awarded the insured approximately $3 million in prejudgment interest in a breach of contract and bad faith suit stemming from the insured’s request for coverage costs related to the cleanup of polychlorinated biphenyls (PCBs).
March 25, 2024
Judgment Granted For Insurer In Dispute Over Insured’s Hurricane Coverage Fraud

LAKE CHARLES, La. — A Louisiana federal judge granted summary judgment to a homeowners insurer on its counterclaim to recoup reimbursement paid to a homeowner who sued the insurer for bad faith over its purported failure to adequately compensate her for damage caused by Hurricane Laura, finding that there is no dispute regarding the homeowner's misrepresentations when she applied for insurance.
March 22, 2024
Insureds Urge 5th Circuit To Rehear Arbitration Row In $7M Hurricane Ida Dispute

NEW ORLEANS — Two New Orleans property owners urge the Fifth Circuit U.S. Court of Appeals to grant panel or en banc rehearing of their appeal challenging the arbitrability of their claims for $7 million in damages caused by Hurricane Ida and for bad faith against a group of foreign and domestic insurers.
March 22, 2024
Insured Permitted To Amend Bad Faith Claim Against Insurer Of Rental Property

ABERDEEEN, Miss. — A Mississippi federal judge granted an insurer’s motion to dismiss a bad faith claim without prejudice to allow the insured to amend her complaint to add additional facts in support of the bad faith claim arising out of the insurer’s denial of coverage for damages to the insured’s rental property.
March 21, 2024
Earth Movement Exclusion Bars Coverage For Foundation Settling, Federal Judge Says

DENVER — Breach of contract and bad faith claims alleged against a homeowners insurer cannot survive because the policy’s earth movement exclusion clearly bars coverage for damages caused by settling in the foundation of the home, a Colorado federal judge said March 20 in granting the insurer’s motion for summary judgment.
March 21, 2024
Panel Affirms Ruling In Favor Of Insurer In Bad Faith Suit Over Woolsey Fire Damage

LOS ANGELES — A California appeals court held that a homeowners insurer did not breach the insurance contract or the implied covenant of good faith and fair dealing and did not commit financial elder abuse because it paid the proper insureds “all (if not more than)” it had a duty to pay under the policy coverages for dwelling repairs, personal property damage and temporary additional living expenses, affirming a lower court’s summary judgment ruling in favor of the insurer in a coverage dispute arising from property damage cause by the Woolsey Fire.
March 21, 2024
Judge: 1 Expert Excluded, Others Allowed In Insurance Coverage Spat

DENVER — Experts retained by homeowners can testify on the cause of alleged water damage that is part of an insurance coverage dispute, but the insurer’s expert is inadmissible because his testimony is irrelevant to the issues in the case, a Colorado federal judge ruled.
March 19, 2024
Judge Grants Dismissal To Guaranty Association In Hurricane Ida Coverage Dispute

NEW ORLEANS — A Louisiana federal judge dismissed homeowners’ claims against the Louisiana Insurance Guaranty Association (LIGA) in a breach of contract and bad faith suit against it over liability for purported damages caused by Hurricane Ida, finding that because the homeowners voluntarily dismissed the related claims against LIGA, which was substituted for a now-insolvent insurer, LIGA’s motion for partial dismissal is moot.
March 19, 2024
Amended Complaint Proposed In Delaware Suit Over Alleged Asset Dissipation

WILMINGTON, Del. — Plaintiffs in a suit over the “Agera transactions” — a complex asset-swap arrangement that they allege resulted in the “dissipation of at least $250 million” — have moved in Delaware Chancery Court for leave to amend the complaint “to clarify the record and make minimal amendments.”
March 19, 2024
3rd Circuit Affirms Ruling For Homeowners Insurer In Water Damage Coverage Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a district court’s ruling in favor of a homeowners insurer on breach of contract and bad faith claims in a water damage coverage dispute, agreeing with the insurer that the policy’s one-year suit limitation provision bars the breach of contract claim and that there is no evidence that the insurer’s denial of coverage was unreasonable.
March 18, 2024
Second-Layer Excess Insurer Owed A Duty Under Policy To Act In Good Faith

FLINT, Mich. — An insured’s claim for breach of contract based on a second-layer excess insurer’s failure to participate and contribute in the settlement of an underlying wrongful death suit can proceed because the insurer owed a duty under the insurance contract to exercise good faith in negotiating and settling the underlying case and the insured presented sufficient facts in support of its claim, a Michigan federal judge said in denying the insurer’s motion for judgment on the pleadings.