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

Mealey's Insurance Bad Faith

December 04, 2023
Questions Of Fact Regarding Cause Of Water Damage Exist, Calif. Federal Judge Says

LOS ANGELES — An insured’s claims for breach of contract and bad faith can proceed against a homeowners insurer because questions of fact exist as to whether water damage in the insured’s home was caused by wear and tear, an excluded cause of loss, and whether the insurer’s investigation of the claim was reasonable, a California federal judge said in denying the insurer’s motion for summary judgment.
December 01, 2023
Delaware Judge Denies Assignees’ Motion To Compel In Wrongful Death Coverage Suit

NEW CASTLE, Del. — A Delaware judge refused to compel a homeowners insurer to produce the claim file of a convicted murderer’s parents in a breach of contract and bad faith lawsuit seeking coverage for an underlying wrongful death lawsuit that resulted in a $15,816,580 arbitration award, finding that the murderer’s assignees failed to demonstrate that the parents’ claim file is relevant to the coverage lawsuit.
November 30, 2023
Appraisal Award In Remediation Suit Was Not Valid, Texas Panel Says In Reversing

AMARILLO, Texas — While “dancing with oneself may have been acceptable to Billy Idol,” two appraisers “needed to tango together to have a viable appraisal award,” the Seventh District Texas Court of Appeals said in finding that a trial court erred in entering summary judgment for a homeowners insurer on a breach of contract claim in a remediation coverage suit because the appraisal award was not valid as both appraisers did not agree on the award.
November 30, 2023
Questions Of Fact Exist As To Whether Auto Insurer’s Claim Denial Was Reasonable

SEATTLE — A Washington federal judge denied an auto insurer’s motion for summary judgment on the insured’s extracontractual claims after determining that questions of fact exist regarding whether the insurer’s denial of an underinsured motorist benefits claim was reasonable based on the evidence.
November 30, 2023
No Coverage Owed For Breach Of Franchise Agreement, Trademark Infringement Claims

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of insurers in an insured’s breach of contract and bad faith lawsuit seeking coverage for an underlying action alleging that it breached a franchise agreement and infringed on trademarks, finding that some of the underlying claims “clearly fell outside the policy's coverage” and that the policy’s intellectual property (IP) exclusion also barred coverage.
November 30, 2023
Panel Says Request For Examination Under Oath Was Not Made In Bad Faith

SAN FRANCISCO — The First District California Court of Appeal affirmed a trial court’s ruling in favor of an insurer on an insured’s breach of contract and bad faith claims in a water damage coverage suit after determining that the insurer’s request for an examination under oath (EUO) from the insured is not evidence of bad faith conduct.
November 29, 2023
Breach Of Contract, Bad Faith Claims To Proceed Against Auto Insurer

SCRANTON, Pa. — A Pennsylvania federal judge determined that an insured’s claims for breach of contract and bad faith can proceed against an auto insurer because questions of fact exist as to whether the insurer breached its contract and acted reasonably in handling the insured’s claims for medical payments following his involvement in an auto accident.
November 28, 2023
Additional Work Not Barred By Policy’s Mold Sublimit Provision, Judge Says

PHILADELPHIA — A claim for additional coverage for mold remediation work required by a local building code is not subject to a policy’s mold sublimit provision because the policy’s ordinance or law provision provides coverage for the additional work that was required by the enforcement of a local building code, a Pennsylvania federal judge said in partially granting the insureds’ motion for summary judgment.
November 27, 2023
U.S. High Court Refuses To Review Insurance Bad Faith Suit Over Worker Injury

WASHINGTON, D.C. — The U.S. Supreme Court denied an insurer’s petition seeking review of 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 an underlying worker injury claim, refusing to address the insurer’s argument 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.
November 27, 2023
Unsecured Creditors Propose Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — The Official Committee of Unsecured Creditors has proposed a Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court, with a Dec. 13 objection deadline.
November 27, 2023
Judge Grants Substitution Motion In Hurricane Coverage Row With Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted a motion to substitute the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a property owner’s breach of contract and bad faith suit against its now-insolvent insurer that purportedly failed to cover alleged losses from Hurricane Ida, finding that substituting LIGA as a defendant is permitted in an action seeking to resolve covered claims.
November 20, 2023
Judge Issues Remand, Says Guaranty Association Is Insolvent Insurer’s Obligor

NEW ORLEANS — A Louisiana federal judge granted homeowners’ motion to file an amended complaint and name the Louisiana Guaranty Association (LIGA) as a defendant in their breach of contract suit against their now-insolvent homeowners insurer for its purported failure to adequately cover their losses from Hurricane Ida, finding that LIGA is the statutory obligor for the insolvent insurer and that the case must be remanded to state court due to the absence of subject matter jurisdiction.
November 17, 2023
Auto Insurer Owed A Duty To Insured To Disclose Risk Of Minimum UIM Coverage

ALBUQUERQUE, N.M. — A New Mexico federal judge partially denied an auto insurer’s motion to dismiss on claims for bad faith, negligent misrepresentation and violations of New Mexico’s Unfair Trade Practices Act (UPA) and Unfair Insurance Practices Act (UIPA) after determining that the auto insurer had a duty to disclose to the insured that the selection of the minimum uninsured/underinsured motorist (UM/UIM) limits of coverage could result in the insured receiving no UIM benefits if the insured were involved in a collision with a minimally insured tortfeasor.
November 17, 2023
No Coverage Owed For Foundation Damage; Bad Faith, Breach Of Contract Claims Fail

LOS ANGELES — An insured’s claims for breach of contract, bad faith and unfair business practices alleged in a complaint seeking coverage for foundation damage arising out of a burst water pipe cannot proceed because the insurer properly denied coverage under the policy’s foundation damage exclusion, the Second District California Court of Appeal said in affirming a trial court’s decision.
November 16, 2023
Judge Dismisses Most Claims In Property Loss Suit, Says No Bad Faith Claim Exists

TRENTON, N.J. — A New Jersey federal judge dismissed a number of claims alleged against a homeowners insurer in a property loss coverage suit but denied the homeowners insurer’s motion as it pertained to severing and staying any bad faith claims that may be present on the face of an insured’s pro se complaint because the complaint does not include any sufficient facts in support of a bad faith claim.
November 16, 2023
Insurer Says Dismissal Of Claims In Hurricane Damage Suit Must Be Affirmed

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals should affirm a district court’s dismissal of claims alleging breach of contract, bad faith and violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) against a homeowners insurer because the district court properly found that the insured’s amended complaint did not allege sufficient facts in support of the insureds’ claims, the insurer contends in its appellee brief.
November 16, 2023
Bad Faith, Unfair Practices Claims In Hurricane Coverage Suit Are Time-Barred

NEW BERN, N.C. — An insured’s claims for bad faith and for violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) arising out of claims for property damages caused by Hurricanes Matthew and Florence cannot proceed because the claims are barred by the applicable statute of limitations, a North Carolina federal judge said in partially granting a commercial property insurer’s motion for judgment on the pleadings.
November 16, 2023
Judge Grants Request To Amend Complaint To Add Guaranty Association, Issues Remand

NEW ORLEANS — One day after a Louisiana federal judge granted a homeowner’s motion to add the Louisiana Insurance Guaranty Association (LIGA) to his hurricane coverage suit against his now-insolvent insurer, the homeowner added LIGA as a defendant in his amended complaint.
November 16, 2023
Judge Allows Insured To Add Guaranty Association, Says No ‘Dilatory Purpose’

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to amend his complaint and add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a hurricane coverage suit against his now-insolvent insurer, finding in part that though LIGA is a nondiverse party, the homeowner had no “dilatory purpose” in amending the complaint.
November 16, 2023
Judgment Denied For Short-Term Health Insurer In $250K Cancer Treatment Dispute

OKLAHOMA CITY — An Oklahoma federal judge denied summary judgment for a short-term health insurer in its insured’s breach of contract suit for rescinding his policy and failing to cover his colon cancer treatment over alleged material misrepresentations in the policy application, finding that questions remain as to the insured’s agreeing to rescission and the reasonableness of the insurer’s conduct in ensuring that the insured received his policy benefits.
November 16, 2023
Suit Against Homeowners Insurer Dismissed Following Parties’ Agreement

SAN FRANCISCO — A California federal judge dismissed a fire damage coverage suit filed by insureds against their homeowners insurer after the parties filed a joint stipulation to dismiss the claim for breach of contract without prejudice and the claims for bad faith and unfair insurance practices with prejudice.
November 16, 2023
Insurer Granted Summary Judgment On Breach Of Contract, Bad Faith Claims

DALLAS — A Texas federal judge granted a homeowners insurer’s motion for summary judgment on an insured’s breach of contract claim and extracontractual claims but stayed a ruling on the motion as it pertained to the insured’s claim for violation of the Texas Prompt Payment of Claims Act (TPPCA) to allow the Texas Supreme Court to answer a certified question posed by the Fifth Circuit U.S. Court of Appeals regarding recovery under the TPPCA.
November 15, 2023
Insured’s Breach Of Contract, Bad Faith Suit Dismissed For Failure To Prosecute

SAN FRANCISCO — A California federal magistrate judge on Nov. 14 dismissed an insured’s breach of contract and bad faith suit against his homeowners insurer based on the insured’s failure to respond to the insurer’s motion for judgment on the pleadings and the insured’s failure to respond to the court’s order to show cause as to why the suit should not be dismissed for failure to prosecute.
November 15, 2023
Insureds Permitted To File Amended Complaint To Add Bad Faith Allegations

HAMMOND, Ind. — An Indiana federal judge granted insureds’ motion for leave to file an amended complaint to add allegations related to an auto insurer’s alleged bad faith conduct in the handling of their claim after determining that the insureds refer to supportive facts in their amended complaint.
November 15, 2023
Judge Denies Dismissal In Hurricane Coverage Suit, Says Substitution Has No Impact

LAKE CHARLES, La. — A Louisiana federal judge denied dismissal of a homeowners’ bad faith suit against their now-insolvent homeowners insurer for purportedly failing to adequately compensate them for damages caused by Hurricane Laura, finding that substituting the Louisiana Insurance Guaranty Association (LIGA) does not impact the court’s subject matter jurisdiction.