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

Mealey's Insurance Bad Faith

October 02, 2023
Judge: Issues Of Fact Exist On Insurer’s Coverage Denial In Water Damage Dispute

OKLAHOMA CITY — An insured’s claim for bad faith against its commercial property insurer can proceed because issues of material fact exist as to whether the insurer’s denial of coverage for some roof damage and interior water damage was reasonable, an Oklahoma federal judge said in denying the insurer’s motion for summary judgment.
September 29, 2023
Federal Judge Remands Hurricane Ida Coverage Dispute For Lack Of Jurisdiction

NEW ORLEANS — A Louisiana federal judge remanded to state court homeowners’ bad faith and breach of contract suit against their now-insolvent insurer, which they allege failed to pay for damages resulting from Hurricane Ida, finding that the court lacks jurisdiction because the homeowners added the Louisiana Insurance Guaranty Association (LIGA) as a defendant in their amended complaint.
September 29, 2023
Dismissal Bid Fails In Excess Loss Reinsurance Row With ERISA, Bad Faith Claims

PITTSBURGH — Ruling the arguments “more appropriately handled at the summary judgment stage,” a Pennsylvania federal judge on Sept. 28 denied a dismissal motion in an Employee Retirement Income Security Act suit over an excess loss reinsurance contract.
September 29, 2023
Amount In Controversy In Auto Coverage Suit Does Not Meet Federal Requirement

PHOENIX — An Arizona federal judge remanded an insured’s breach of contract and bad faith suit against an auto insurer because the insurer failed to meet its burden of showing that the federal jurisdictional amount-in-controversy requirement of $75,000 has been met.
September 29, 2023
Negligence, Bad Faith Claims Cannot Proceed Against Homeowners Insurer, Judge Says

DENVER — Negligence and bad faith claims against a homeowners insurer cannot proceed because the insureds failed to show that they specifically requested that a homeowners policy, rather than a dwelling policy, be issued for their primary home in Colorado that was destroyed in a wildfire, a Colorado federal judge said in granting the insurer’s motion to dismiss.
September 29, 2023
Rhode Island Federal Judge Says Bifurcation Of Bad Faith Claims Is Appropriate

PROVIDENCE, R.I. — A Rhode Island federal judge granted a homeowners insurer’s motion to bifurcate bad faith claims from a breach of contract claim alleged against the insurer by an insured seeking coverage for water damages after determining that the case will benefit if the bad faith claims are bifurcated.
September 29, 2023
Insureds Failed To Show Auto Insurer’s Handling Of Claim Was Bad Faith, Judge Says

PHILADELPHIA — A bad faith claim against an auto insurer cannot proceed because the insureds failed to show that the insurer acted unreasonably and had no reasonable basis for delaying payment of the insureds’ claim for underinsured motorist (UIM) benefits, a Pennsylvania federal judge said in granting the insurer’s motion for summary judgment.
September 28, 2023
Insurer’s Motion To Dismiss Homeowners’ Bad Faith Claim Denied In Federal Court

PITTSBURGH — A federal judge in Pennsylvania denied a homeowners insurer’s motion to dismiss a bad faith claim, ruling that two homeowners adequately supported the claim by alleging that the insurer knew that one of the homeowners was disabled and did not advise him that his policy covered additional living expenses even though the insurer was informed that the disabled homeowner did not have access to a bathroom as a result of damage caused by a broken water line.
September 28, 2023
Fact Issues In Auto Coverage Suit Preclude Judgment For Insurer, Panel Says

ALBUQUERQUE, N.M. — An auto insurer was not entitled to judgment in its favor as a matter of law because disputed issues of fact exist as to whether the insurer acted reasonably in handling an insured’s claim for benefits and whether the insurer waived the policy’s consent-to-settle provision after receiving the insured’s notice of a proposed settlement with a third-party tortfeasor, the New Mexico Court of Appeals said.
September 27, 2023
Music Festival Organizer Seeks $2.8M For Losses Arising From Tuscany Storm

PHILADELPHIA — An insured that organized a three-day music festival in Tuscany sued its insurer for breach of contract, declaratory relief and bad faith in a Pennsylvania federal court, seeking coverage under an Event Cancellation Policy for its alleged $2.8 million in losses caused by severe weather.
September 27, 2023
Judge Grants Motion To File Amended Complaint In Hurricane Ida Coverage Row

NEW ORLEANS — A Louisiana federal judge granted homeowners’ motion to file an amended complaint and add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in their breach of contract and bad faith suit against their now-insolvent insurer over its failure to cover purported damages caused by Hurricane Ida, finding no evidence that the motion to amend is “to defeat federal jurisdiction” and that because diversity jurisdiction no longer exists, the case must be remanded to state court.
September 26, 2023
Insurer: Ruling ‘Sharply Conflicts’ With Dupree, Warrants High Court Review

WASHINGTON, D.C. — An insurer asked the U.S. Supreme Court to review the 11th Circuit U.S. Court of Appeals’ finding that there is enough evidence for a jury to reasonably conclude that it acted in bad faith because it delayed acting on its duty to investigate and settle the underlying worker injury claim, asserting that the appeals court’s holding “sharply conflicts” with the high court’s recent ruling in Dupree v. Younger and warrants grant of its petition for writ of certiorari, vacatur of the lower court’s judgment and remand for further consideration.
September 26, 2023
Trial Court Erred In Granting Judgment For Insurer In Water Damage Suit

WAUKESHA, Wis. — The Second District Wisconsin Court of Appeals determined that a trial court erred in granting a homeowners insurer’s motion for judgment on the pleadings in a water damage coverage dispute because the insureds’ complaint does not allege that the water damage was caused by subsurface water, an excluded cause of loss, but by a sewer or drain backup, a covered cause of loss under the policy.
September 25, 2023
Questions Of Fact Exist Regarding When Insureds Knew Of Water Leak Problems

SANTA ANA, Calif. — A California federal judge denied a property insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that questions of fact exist regarding when the insureds became aware of a water leak problem within a hotel they purchased and whether the insurer acted reasonably in handling the insureds’ claim for coverage.
September 19, 2023
Dismissal Granted In Multiple Hurricane Damage Suit Against Insolvent Insurer

LAKE CHARLES, La. — A Louisiana federal judge dismissed a homeowner’s breach of contract suit against a now-insolvent insurer over its failure to compensate for damages caused by two hurricanes, finding that the magistrate judge correctly determined in a report and recommendation that because the homeowner amended her complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant, the court lacks subject matter jurisdiction.
September 19, 2023
Insurers Cross-Appeal In Coverage Dispute With Home Depot Over 2014 Data Breach

CINCINNATI — Insurers filed cross-appeal notices in an Ohio federal court two weeks and one day after their mutual insured, Home Depot, appealed to the Sixth Circuit U.S. Court of Appeals the lower court’s finding that an insurance policy’s electronic data exclusion bars coverage for the retailer’s losses stemming from a 2014 data breach (The Home Depot, Inc., et al. v. Steadfast Insurance Co., et al., No. 21-00242, S.D. Ohio, Western Div.).
September 19, 2023
Remand To Florida Court Argued In Coverage Row Over Leased Aircraft

MIAMI — Arguing in a reply brief that “in lawsuits between parties of different countries, there is no federal diversity jurisdiction,” plaintiffs in a coverage dispute over aircraft that a Russian airline refused to return after the invasion of Ukraine urge a Florida federal court to remand the case to Florida state court.
September 18, 2023
Insurer Did Not Act In Bad Faith In Refusing To Settle For More Than Policy Limits

TAMPA, Fla. — A trial court properly found that an auto insurer did not act in bad faith in refusing a settlement demand that was in excess of the insurance policy limits; however, the trial court erred in failing to properly consider applicable Florida precedent regarding the other theories of bad faith alleged by the insureds and third-party claimant, the Second District Florida Court of Appeal said.
September 18, 2023
Insured Sufficiently Alleged Insurer Was A Party To Commercial Property Policy

FRESNO, Calif. — A California federal judge denied a motion to dismiss filed by two insurers after determining that an insured’s breach of contract, bad faith and unfair business practices claims can proceed against one of the insurers because the insured nursing home sufficiently alleged that the insurer was a party to a commercial property insurance policy.
September 18, 2023
Insurer Acted Reasonably In Enclosing Release With Tender Of Bodily Injury Limits

HELENA, Mont. — A Montana federal magistrate judge granted an auto insurer’s motion for summary judgment after determining that claims alleging violations of Montana’s Unfair Trade Practices Act (UTPA) and bad faith cannot proceed because the insurer acted reasonably by enclosing an optional release when it tendered its insured’s bodily injury limits to the claimants following a motorcycle accident for which its insured was liable.
September 18, 2023
Unfair Trade Practices, Bad Faith Claims Against Auto Insurer Dismissed

PHILADELPHIA — Claims for violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) and bad faith against an auto insurer cannot proceed because the insureds failed to allege sufficient facts in support of the claims, a Pennsylvania federal magistrate judge said in granting the auto insurer’s motion to dismiss.
September 15, 2023
Motion To Add Guaranty Association Granted, Case Remanded In Hurricane Ida Suit

NEW ORLEANS — A Louisiana federal judge granted insured homeowners’ motion to file a supplemental complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a Hurricane Ida coverage suit against their now-insolvent insurer, finding a lack of evidence that the homeowners sought to amend their complaint to defeat diversity jurisdiction but that because it is defeated by adding LIGA, the case must be remanded to state court.
September 14, 2023
Triable Issues Exist As To Reasonableness Of Auto Insurer’s Claims Handling

SEATTLE — An auto insurer is not entitled to summary judgment on an insured’s extracontractual claims because the insured raised triable issues of fact as to whether the auto insurer’s investigation and claims handling was reasonable, a Washington federal judge said in partially denying the auto insurer’s motion for summary judgment.
September 13, 2023
Judge Dismisses Elder Abuse Suit Against LTC Insurer, Cites Inadequate Pleading

SAN FRANCISCO — A California federal judge dismissed a breach of contract and elder abuse suit filed against a couple’s long-term care (LTC) insurer for its failure to cover the wife’s claim for benefits, finding that though the amended complaint contains “a bundle of allegations that might constitute plausible causes of action with some additional facts,” the amended complaint does not currently suffice to “allow this case to proceed.”
September 12, 2023
Judge Remands Bad Faith Homeowners Insurance Suit Against Insolvent Insurer

BATON ROUGE, La. — A Louisiana federal judge remanded to state court a bad faith homeowners insurance coverage suit over purported water damage from a plumbing leak, finding that remand is appropriate for lack of subject matter jurisdiction due to the Louisiana Insurance Guaranty Association (LIGA) being added as a defendant after the insurer was placed into liquidation.