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

Mealey's Insurance Bad Faith

March 18, 2024
Insureds’ Bad Faith Claim In UIM Benefits Dispute Can Proceed, Judge Says

PHILADELPHIA — A bad faith claim alleged against an auto insurer can proceed because the insureds stated sufficient facts to support their allegation that the insurer failed to properly investigate their claim for underinsured motorist (UIM) benefits, a Pennsylvania federal judge said March 14 in partially denying the insurer’s motion to dismiss.
March 15, 2024
Judge Adopts Report, Remands Hurricane Coverage Suit Against Guaranty Association

MOBILE, Ala. — An Alabama federal judge adopted a magistrate judge’s report and recommendation that a bad faith and breach of contract hurricane coverage suit against the Alabama Guaranty Association (AIGA) be remanded to state court, agreeing with the magistrate judge’s finding that the suit is “due to be remanded” because the court “lacks subject matter jurisdiction.”
March 14, 2024
Coverage For Storm Damage Will Be Resolved As Part Of Breach Of Contract Claim

COVINGTON, Ky. — A homeowners insurer’s counterclaim seeking a declaration that no coverage is owed for storm damage to the insured’s home must be dismissed because the issue of coverage will be resolved as part of the insured’s breach of contract claim, a Kentucky federal judge said March 13 in dismissing the counterclaim.
March 14, 2024
Dismissal Of Bad Faith Suit Recommended For Failure To Comply With Florida Law

FORT LAUDERDALE, Fla. — A Florida federal magistrate judge recommended granting an insurer’s motion to dismiss its insureds’ bad faith suit because the insureds failed to file a compliant civil remedy notice (CRN) as required under Florida law before filing a bad faith suit against the insurer.
March 14, 2024
Bad Faith Claim Against Boat Insurer Can Proceed, Massachusetts Judge Says

BOSTON — An insured’s breach of contract claim cannot proceed as pleaded because the insured failed to show that the insurer breached any terms of the policy; however, the insured’s bad faith claim can proceed because it cannot be conclusively established that the insurer did not act in bad faith in investigating the insured’s claim for coverage for a boat accident, a Massachusetts federal judge said in partially granting the insurer’s motion for judgment on the pleadings.
March 13, 2024
Summary Judgment Denied To State Farm In Dispute Over Concealed SSDI Application

DENVER — A Colorado federal judge denied State Farm’s motion for summary judgment in a bad faith and breach of contract suit filed against it over coverage for an insured’s uninsured/underinsured motorist (UM/UIM) claims related to an auto accident, finding that the insured did “not technically” make false statements regarding her application for Social Security Disability Income (SSDI) that would void her insurance policy for fraud.
March 13, 2024
Insured’s Bad Faith Claim Against Auto Insurer Dismissed Without Prejudice

PHILADELPHIA — An insured’s bad faith claim alleged against an auto insurer cannot proceed because the insured’s complaint alleges only conclusory statements with no factual support, a Pennsylvania federal magistrate judge said March 12 in dismissing the claim without prejudice.
March 13, 2024
Oral Surgeon’s Breach Of Contract, Bad Faith Claims Against Disability Insurer Fail

FRESNO, Calif. — An insured’s breach of contract and bad faith claims against a disability insurer cannot proceed because there is no evidence that any doctor advised the insured to stop working as an oral surgeon to reduce the risk of contracting COVID-19 and suffering complications from the virus based on his comorbid conditions of asthma and hypertension.
March 13, 2024
Bad Faith Claims Fail In Coverage Suit Over Missing Artwork, Rolex Watch

TUSCON, Ariz. — An Arizona federal judge granted an insurer’s motion for summary judgment on an insured’s bad faith claims after determining that one of the bad faith claims related to the theft of artwork cannot proceed because the breach of contract claim related to the artwork fails and the other bad faith claim related to a missing Rolex watch fails because the issue of coverage was fairly debatable.
March 12, 2024
Judge Denies Summary Judgment On Bad Faith, Insurance Code Violation Claims

SHERMAN, Texas — A Texas federal judge on March 11 partially adopted magistrate judge’s recommendation to grant a homeowners insurer’s motion for summary judgment on a breach of contract claim related to the insureds’ claim for damages to their pool and landscaping; however, the judge rejected a portion of the magistrate judge’s report and denied the insurer’s motion on the claim for bad faith and a number of the claims alleging violations of the Texas Insurance Code.
March 12, 2024
9th Circuit Partly Reverses Ruling In $40M Commercial Crime Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 11 reversed a lower federal court’s dismissal of a financial services company insured’s claim for loss under its commercial crime insurance policy’s “Computer And Funds Transfer Fraud Insuring Agreement” and its claim for tortious breach of the implied covenant of good faith and fair dealing, finding that the authorized submission of fraudulent electronic data into the insured’s computer system can arguably be described as “fraudulent entry” to trigger coverage.
March 12, 2024
Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases

WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.
March 11, 2024
Extracontractual Claims Against Homeowners Insurer Cannot Proceed, Judge Says

BROWNSVILLE, Texas — An insured’s extracontractual claims alleged against a homeowners insurer in a storm damage coverage dispute cannot proceed because the evidence shows that a reasonable coverage dispute existed, a Texas federal judge said in granting the insurer’s motion for summary judgment.
March 07, 2024
5th Circuit Affirms Arbitration Order In $7M Hurricane Ida Dispute

NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on March 6 affirmed an order compelling arbitration of an insureds’ claims for $7 million in damages caused by Hurricane Ida and for bad faith against a group of foreign and domestic insurers that had provided it a surplus line policy.
March 07, 2024
Contractor Seeks 6th Circuit’s Review Of Coverage Rulings In Wall Collapse Suit

CHATTANOOGA, Tenn. — Less than two weeks after a building owner filed a notice of appeal to the Sixth Circuit U.S. Court of Appeals, the contractor responsible for the building’s renovation work followed suit and filed its own notice of appeal, seeking review of a Tennessee federal judge’s ruling and judgment entered in favor of the insurer in the dispute between the building owner, contractor and insurer over coverage for the replacement of the building’s wall that fell during renovation work.
March 04, 2024
Insurer’s Refusal To Settle For More Than Policy Limits Was Not Bad Faith, Panel Says

TAMPA, Fla. — The Second District Florida Court of Appeal granted a motion for rehearing filed by insureds and a third-party claimant in an auto coverage dispute and issued a revised opinion, reiterating its prior finding that while the trial court properly found that the auto insurer did not act in bad faith in refusing a settlement demand that was in excess of the insurance policy limits, the trial court erred in failing to properly consider applicable Florida precedent regarding other theories of bad faith alleged by the insureds and third-party claimant.
March 04, 2024
S.C. Panel Says Issue Of Fact Exists On Timeliness Of Breach Of Contract Claim

COLUMBIA, S.C. — A trial court correctly found that a bad faith claim against a homeowners insurer could not proceed because the insurer’s denial of coverage was not unreasonable; however, the trial court incorrectly found that the insured’s breach of contract claim could not proceed because a question of fact exists as to whether the breach of contract claim is timely based on the insurer’s communications with the insured about her water damage claim, the South Carolina Court of Appeals said in reversing a portion of the trial court’s ruling.
March 04, 2024
Complaint Alleges Sufficient Facts To Support Bad Faith Claim Against Auto Insurer

LOS ANGELES — A trial court erred in sustaining an auto insurer’s demurrer on an insured’s bad faith claim because the insured’s complaint alleges sufficient facts in support of a claim for bad faith against the insurer, a California appellate court said in reversing the trial court’s ruling.
March 01, 2024
Homeowners Insurer Properly Canceled Policy Pursuant To Policy Terms And Oregon Law

EUGENE, Ore. — An insured’s claims for breach of contract, bad faith and negligent performance against a homeowners insurer cannot proceed because the insurer properly canceled the insured’s homeowners policy within 60 days of the policy’s effective date and properly provided the insured with notice of the policy cancellation, an Oregon federal judge said Feb. 29 in granting the insurer’s motion for summary judgment.
February 29, 2024
U.S. Bankruptcy Judge Approves Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After the latest in a string of recent hearings, a Delaware federal bankruptcy judge on Feb. 29 confirmed a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, also approving four settlements — one with a caveat and one with conditions precedent.
February 28, 2024
Settlements Sought, Liquidation Proposal Updated In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After putting forth several proposed settlements for approval in a Delaware federal bankruptcy court following mediation, the Official Committee of Unsecured Creditors on Feb. 28 filed the latest of its recent amendments to its proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of Vesttoo affiliates.
February 26, 2024
4th Circuit Refuses To Rehear No Coverage, No Bad Faith Ruling

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied an insured’s petition to rehear its opinion that affirmed a lower federal court’s summary judgment ruling in favor of a professional liability insurer in a breach of contract and bad faith lawsuit, standing by its holding that the insured failed to create a genuine dispute of fact about the reasonableness of the insurer’s refusal to defend her against an underlying lawsuit.
February 26, 2024
Homeowners Insurer Did Not Waive Right To Demand Appraisal, Federal Judge Says

DALLAS — A Texas federal judge granted a homeowners insurer’s motion to compel appraisal in a breach of contract and bad faith suit arising out of the insureds’ water damage claim after determining that the insurer did not waive its right to demand appraisal.
February 23, 2024
Building Owner Files Notice Of Appeal To 6th Circuit In Wall Collapse Coverage Suit

CHATTANOOGA, Tenn. — A building owner filed a notice of appeal to the Sixth Circuit U.S. Court of Appeals following a judgment entered by a Tennessee federal judge in favor of the insurer in a dispute between the building owner, contractor and insurer over coverage for the replacement of the building’s wall that fell during renovation work.
February 22, 2024
No Coverage Owed For Losses Incurred By Mandatory Evacuation, 4th Circuit Affirms

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of a commercial property insurer in an insured’s breach of contract and bad faith lawsuit, finding that the insurer owes no coverage for the insured’s business income losses incurred as result of the mandatory evacuation of Jasper County, S.C., in preparation for Hurricane Dorian.